Orientfield Holdings Ltd v Bird & Bird LLP20th September 2015
The recent case of Orientfield Holdings Ltd v Bird & Bird LLP highlights the importance of a solicitor’s duty to fully disclose potentially relevant information to his or her clients.
The case concerns the purchase of a residential property for £25 million in respect of which the purchaser’s solicitors, Bird & Bird LLP, failed to pass on relevant information to the purchaser.
Bird and Bird’s searches revealed substantial development plans near the property which the purchaser only discovered after exchange. The purchaser then sought to rescind the contract. When the purchaser was unable to recover the full amount of its deposit from the seller, it brought a claim against its solicitors.
In litigation that followed, the Court held that solicitors owe a duty to communicate information within their knowledge which may be material to a transaction and/or might affect a client’s decision-making process. Bird & Bird were found to have breached that duty by failing to pass on information about the development.
For solicitors, the case re-emphasises the importance of keeping clients fully informed of matters relevant to their transaction(s).
It also highlights the need for clients to provide solicitors with sufficient background information and clear instructions, especially where there are specific concerns or material considerations / motives that may not be immediately apparent on the face of a transaction.
This Spotlight first appeared on the website of the Property Section in September 2015. The Property Section is the Law Society’s community for residential and commercial property practitioners. For more information, please visit http://communities.lawsociety.org.uk/property.