FRANK HOULGATE INVESTMENT COMPANY Ltd AGAINST BIGGART BAILLIE LLP [2014] ScotCS CSIH_79 (25 September 2014)

FRANK HOULGATE INVESTMENT COMPANY Ltd AGAINST BIGGART BAILLIE LLP [2014] ScotCS CSIH_79 (25 September 2014)

A solicitor who discovers his client’s fraud in a live transaction and fails to warn the victim or dissociate himself is liable as an accessory to fraud, regardless of subjective intent, due to a continuing implied representation and duty of honesty.

Citation
[2014] ScotCS CSIH_79
Parties
Pursuers and Respondents: Frank Houlgate Investment Company Limited; Defenders and Reclaimers: Biggart Baillie LLP
Jurisdiction
Scotland
Judgment Date
25 September 2014
Procedural Posture
Civil Appeal / Inner House, Court of Session, Reclaiming Motion
Outcome
Reclaiming motion refused; cross appeal sustained.
Legal Topics
Accessory Liability, Implied Representation, Duty of Honesty, Solicitor's Obligations, Fraudulent Misrepresentation
Professional Negligence Delict Fraud Contract Accessory Liability Implied Representation Duty of Honesty Solicitor's Obligations +1 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 4 Authorities cited 16 Party arguments 2 Amounts and remedies 1
Sign in to unlock

Parties

Frank Houlgate Investment Company Limited

Pursuers and Respondents

Biggart Baillie LLP

Defenders and Reclaimers

Procedural Posture

Civil Appeal / Inner House, Court of Session, Reclaiming Motion

Legal Issues

  1. 1 Is a solicitor liable as an accessory to fraud for failing to inform the victim after discovering his client's fraud?
  2. 2 Does a solicitor owe a duty of honesty and implied representation to the other party in a security transaction?
  3. 3 Is subjective dishonest intent required for accessory liability in fraud?

Ratio Decidendi

A solicitor who discovers his client’s fraud in a live transaction and fails to warn the victim or dissociate himself is liable as an accessory to fraud, regardless of subjective intent, due to a continuing implied representation and duty of honesty.

Court Disposition

Reclaiming motion refused; cross appeal sustained.

Orders

  • Adherence to interlocutor of Lord Ordinary dated 3 July 2013.
  • Defenders liable to pay pursuers £100,000 plus interest.