A firm of conveyancers has been held liable by the High Court for a £500,000 property fraud perpetrated by their client, in a landmark decision defining obligations owed by a seller’s solicitor to a purchaser.
Dubai-based fraudsters stole the identity of the owner of a house in Wimbledon and sold the house to the claimant. The High Court upheld the claims for breach of trust against the seller’s solicitors and breach of trust and negligence against the claimant’s own licensed conveyancer, in Purrunsing v A’Court & Co [2016] EWHC 789 (Ch).
Mr Justice Pelling found that A’Court & Co made no serious attempt to comply with anti-money laundering regulations to prevent the fraud, and critically obtained no documentation linking the seller to the property. A’Court & Co were held liable to pay back the purchase money.
The claimant’s own conveyancer did not receive a satisfactory reply when they asked A’Court to verify that the seller was the real owner of the property, but failed to alert his client. Both firms were held liable and the court ordered an equal contribution between them.
Beth Holden, of Anthony Gold Solicitors, who acted for the claimant, says: “In this case we see the court saying that conveyancers on opposite sides of the transaction have joint responsibility to protect the purchaser’s money, no matter who their client is. Old doctrines of buyer-beware and solicitors’ warrantees of identity, are not substitutes for compliance with strict requirements of anti-money laundering regulations and the duty to actively protect the transaction from fraud.”
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