• A reputation for professional excellence with integrity

    A reputation for professional excellence with integrity

  • Accurate understanding and technical analysis

    Accurate understanding and technical analysis

  • National and International Experience

    National and International Experience

  • 34 years in private legal practice

    34 years in private legal practice

  • A focus on events and consequences, not gossip

    A focus on events and consequences, not gossip

  • Helping lawyers, brokers, accountants, surveyors and other professions

    Helping lawyers, brokers, accountants, surveyors and other professions

  • There when you need him

    There when you need him

Legal Viewpoint May 2018

16 May 18

Buyers Beware?  Maybe Not… But at What Cost?

The hot new case for professional risks lawyers is the Court of Appeal’s holding in Dreamvar Ltd v. Mishcon de Reya and P&P Ltd v. Owen White & Catlin (15th May 2018), overturning the trial Judge’s decision, that the seller’s solicitors as well as the buyer’s lawyers will be in breach of trust if purchase moneys are paid to an impostor, even where neither firm has been negligent in failing to know that the seller is not genuine; and the seller’s lawyer will also be in breach of undertaking to the buyer (ie not to pass on purchase moneys to the wrong people). Additionally, the long-established principle that a lawyer gives an implied and strict warranty as to their client’s identity, even if they have been deceived themselves, has been extended in property transactions to encompass a further strict assurance not only that their client is who they say they are, but also that they are the true owner of the property being sold.

The case, which will probably now go to the Supreme Court, is good news for buyers who are victims of identity fraud. The age-old adage of “buyer beware” – traditionally ‘caveat emptor’: the principle that the buyer alone is responsible for checking the quality and provenance of what he’s paying for - has been significantly eroded, with the risks shifted away from buyers onto the professional servicemen who handle the transaction, and their insurers. But it comes at a high price, because the new layer of risk for both buyers’ and sellers’ lawyers, and their insurers, will have to be funded. Firms representing sellers are expected now to have to work much harder to check out their client and ensure the accuracy of their ownership, using more qualified staff to do so; and buyers’ lawyers also will be on their mettle to ensure that all necessary diligence has been carried out. The extra costs, including higher insurance premiums, will have to be passed on to clients.   

Back to News

Professional Risk Expertise

Mike Willis has worked with a diverse range of professions including...

The FMWL Approach …

  • Accurate understanding and technical analysis;
  • Focus on duty, causal event(s) and consequences; not gossip…
  • Sensitive but objective empathy;
  • Overarching commerciality; and
  • Clear aims, with vision where necessary to explore indirect routes to solutions.