Glovers set a precedent in High Court for Lender claims in breach of trust

On 15 December 2010, Glovers’ clients, UCB Home Loans Corporation Limited and The Mortgage Works (UK) Plc (both specialist lending subsidiaries of Nationwide Building Society) were awarded summary judgment against Grace & Co, a firm of solicitors, in a claim for breach of trust in the Chancery Division of the High Court.

UCB was awarded the full value of its claim being a sum of over £4.3 million plus costs on an indemnity basis against Grace & Co, a firm of solicitors, in a claim for breach of trust. The Mortgage Works was also awarded the full value of its claim of £233,903 plus costs on an indemnity basis.

Grace & Co had acted for UCB and TMW in 2006 and 2007 on 19 mortgage transactions.  The Court held that, in breach of trust, Grace & Co paid away the loan monies to the borrowers without authority, as the transactions had not completed (and have still not completed to date). Grace & Co ceased to trade in September 2008.

This follows a line of recent authorities on breach of trust in lender claims against the solicitors.  The lenders achieved maximum recovery of damages because in breach of trust claims damages cannot be reduced for reasons of contributory negligence.

The Court also awarded judgment for UCB and TMW against the borrowers of the 19 loans for monies owing on their mortgage accounts.

Mr Nicholas Davidson QC and Mr Timothy Polli appeared as Counsel for UCB and TMW at the hearing.

Catherine Connolley (Partner) and Helen Waller (Associate) of Glovers have been acting on behalf of UCB and TMW on this case for the past two years.

The case has been reported on Lawtel. Click below for the Lawtel report.

/uploads/01 - Lawtel report of Grace hearing in December 2010.doc

For further information, please contact Catherine Connolley at cconnolley@glovers.co.uk.