Disclosure or discretion?

Recession and falling property prices bring repossessions, even with historically low interest rates. Lenders who sell property at a loss inevitably look to see if there is any way to recoup those losses. The buyer’s solicitor (who normally acts for the lender too), with compulsory professional indemnity insurance, is an obvious target. The first step is to request the solicitor’s file. How should a solicitor respond to such a request? Should the file be handed over lock, stock and barrel?

The default position is that, absent the borrower’s consent or prima facie evidence of borrower fraud, the solicitor should not disclose the parts of the file that are privileged and/or confidential to the borrower. See para 8(c) of the SRA’s Guidance to rule 4 of the Solicitors’ Code of Conduct 2007 and Nationwide BS v Various Solicitors [1999] PNLR52, per Blackburne J who held that “it was the lawyer’s duty to claim privilege on behalf of the client or former