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Guy v Pannone LLP [2009] EWCA Civ 30 (10 February 2009)


Solicitors served a statutory demand for outstanding fees. The client applied to set it aside on the basis of substantial cross-claim for professional negligence. The claim for professional negligence was in two parts. First it was said that the solicitor failed to register a caution on a property which had been registered to a third party after a bogus transaction. This depended on whether the solicitors' initial written instructions had been countermanded. The second allegation was that the solicitor should have warned the claimant as to its knowledge that the third party had previously been accused of being involved in fraud. The first allegation stood no prospect of success on the facts, particularly because the solicitors' version of events had not been challenged in any meaningful way in parallel civil proceedings. Additionally on the facts a priority charge had already been registered prior to his instruction and thus his action could not have been causative of any substantial loss. The second allegation was hopeless as by the time he retained the solicitors, the client was already fully cognisant of the third party's fraudulent activities.