Solicitors 'must act on property fraud' - Professional Indemnity Insurance

29/04/2008

Solicitors ignore property fraud "at their peril", according to one legal practice.

Andrew Horrocks and Marianne Robson of Barlow Lyde & Gilbert tell Mondaq of a new mortgage fraud practice note issued by the Law Society.

The industry body explains that the definition of fraud is relatively wide, meaning solicitors could be deemed to have acted fraudulently even if they are not aware of having done so.

However, the practice note adds that a solicitor may have committed fraud if they fail to inform the lender of information they have received which indicates the borrower is seeking to obtain funds by deception.

This could include lying in order to increase the maximum mortgage to which they have access.

Mr Horrocks and Ms Robson assert that the issue is particularly timely in light of the potential house price crash which may occur in the coming months.

"In the last wave of claims, some professionals were in on the frauds which came to light but most were sued for negligence," they tell Mondaq, referring to the period during the early 1990s.

"Solicitors were often alleged to have failed to spot signs that fraud was going on," they add.

PYV are one of the UK's leading providers of professional indemnity insurance. This news article has been produced by Adfero in collaboration with PYV and its unauthorised use is not permitted.

(c) 2008 Adfero Ltd.

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