Frank Houlgate Investment Company Ltd v Biggart Baillie Llp [2013] ScotCS CSOH_80 (28 May 2013)

Frank Houlgate Investment Company Ltd v Biggart Baillie Llp [2013] ScotCS CSOH_80 (28 May 2013)

A solicitor who, after discovering his client's fraud in an ongoing transaction, fails to withdraw from acting and to warn the intended victim, acts in bad faith and becomes civilly liable as an accessory to the fraud, even absent subjective dishonesty. Solicitor-client confidentiality does not prevent such disclosure where furtherance of a fraud is at issue.

Citation
[2013] ScotCS CSOH_80
Parties
Pursuer: Frank Houlgate Investment Company Limited; Defender: Biggart Baillie LLP
Jurisdiction
Scotland
Judgment Date
28 May 2013
Procedural Posture
Civil / Judgment After Proof Before Answer
Outcome
Judgment for the pursuer
Legal Topics
Accessory Liability, Solicitor's Duties, Client Confidentiality, Fraudulent Misrepresentation, Reparation
Civil Liability Professional Negligence Fraud Accessory Liability Solicitor's Duties Client Confidentiality Fraudulent Misrepresentation Reparation

Case Brief

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Parties

Frank Houlgate Investment Company Limited

Pursuer

Biggart Baillie LLP

Defender

Procedural Posture

Civil / Judgment After Proof Before Answer

Legal Issues

  1. 1 Whether a solicitor is civilly liable as an accessory to fraud for failing to dissociate from a client's fraud after discovering it
  2. 2 Whether subjective dishonesty is required for accessory liability in fraud
  3. 3 Whether solicitor-client confidentiality prevents disclosure of a client's fraud to a third party victim

Ratio Decidendi

A solicitor who, after discovering his client's fraud in an ongoing transaction, fails to withdraw from acting and to warn the intended victim, acts in bad faith and becomes civilly liable as an accessory to the fraud, even absent subjective dishonesty. Solicitor-client confidentiality does not prevent such disclosure where furtherance of a fraud is at issue.

Court Disposition

Judgment for the pursuer

Orders

  • Sustain the second and third pleas in law for the pursuer
  • Repel the defender's pleas in law