Category: Insurance case law · Reviewed by Matt Bartlett, Director · Founder · Last reviewed June 2026
Court of Appeal authority on the solicitor’s duty to disclose material information acquired during a conveyancing retainer to the lender client.
Mortgage Express Ltd advanced funds to a borrower for the purchase of a residential property. The lender and the borrower instructed the same firm of solicitors, Bowerman & Partners, to act on the purchase and the mortgage. Joint representation of lender and borrower in residential conveyancing was at the time, and remains, common practice subject to the rules then in force on conflict of interest.
In the course of the transaction the solicitors became aware of facts which suggested that the purchase price stated in the contract was significantly higher than the value at which the property had recently been sold or contracted to be sold in a back-to-back chain of transactions. Specifically, they became aware that the seller was buying for a substantially lower price than that at which they were selling on to Mortgage Express’s borrower, and that the lender was therefore being asked to advance funds against a valuation which did not reflect this price-chain context.
The solicitors did not disclose this information to Mortgage Express. They completed the transaction. The borrower defaulted, the security proved inadequate (the price chain having reflected an inflated valuation), and Mortgage Express suffered a substantial loss on enforcement.
Mortgage Express sued Bowerman & Partners for breach of duty in failing to disclose the price-chain information. The firm argued that its duty to the lender extended only to the matters expressly required of it by the lender’s standing instructions and the CML Lenders’ Handbook precursor practice of the day, and that there was no general duty to volunteer information that fell outside express instructions.
The central issue was the scope of a solicitor’s duty to a mortgage lender client where the solicitor is jointly retained on the lender’s mortgage and the borrower’s purchase. Specifically, whether the solicitor’s duty extended to disclosure of information acquired in the course of the conveyancing — outside the scope of express instructions — which a reasonably competent solicitor would recognise as potentially material to the lender’s decision to advance, particularly information that might suggest a mortgage fraud, an inflated valuation, or a defect in the lender’s security.
The case also raised the wider question of the interaction between the duties owed to two joint clients (lender and borrower) and the manner in which a solicitor must navigate confidentiality and disclosure obligations between them.
The Court of Appeal (Sir Thomas Bingham MR, Millett and Schiemann LJJ) held in favour of Mortgage Express. The court held that a solicitor acting for a mortgage lender owes a duty to disclose to the lender any information that comes to the solicitor’s attention in the course of the retainer which a reasonable solicitor would recognise as material to the lender’s decision to lend or to the value or enforceability of the security.
Sir Thomas Bingham MR explained that the lender’s instructions, although typically standardised and concerned with completion mechanics, do not exhaust the scope of the duty. A solicitor who acquires information that is plainly relevant to the lender’s interest must communicate it, even if it falls outside the literal terms of express instructions. The duty is one of competent professional conduct: a solicitor cannot shut their eyes to manifest indications of fraud, inflated valuation or other matters undermining the security.
The court rejected the firm’s argument that the duty was confined to express instructions. The price-chain information was material, and the failure to disclose it constituted a breach of the solicitor’s duty to the lender. Where joint representation creates a conflict between disclosing material information to one client (the lender) and confidentiality owed to the other (the borrower), the solicitor must cease to act, and cannot simply remain silent. Liability was established and the claim succeeded.
A solicitor acting on a residential mortgage transaction owes the lender client a duty to disclose any information acquired in the course of the retainer which a reasonably competent solicitor would recognise as material to the lender’s decision to lend or to the adequacy of the security. The duty is not confined to matters expressly identified in the lender’s instructions or standing handbook. Where joint representation produces a conflict between disclosure and confidentiality, the solicitor must withdraw from acting.
Mortgage Express v Bowerman & Partners is the foundational authority on solicitor disclosure duties to mortgage lenders and is heavily engaged in solicitors’ professional indemnity (PI) claims arising from residential and commercial conveyancing. Lender claims have constituted, and continue to constitute, one of the largest categories of solicitors’ PI claims notified under SRA Minimum Terms cover.
For PI insurers, Bowerman defines the breadth of the conveyancing solicitor’s exposure to lender claims. The duty extends to all materially relevant information acquired during the retainer — back-to-back transactions, sub-sales, undeclared incentives, gifted deposits, unusual valuation features, identity concerns, and any indication of mortgage fraud. The CML Lenders’ Handbook (now UK Finance Mortgage Lenders’ Handbook) and the BSA Handbook codify many of these duties, but Bowerman supplies the underlying common-law foundation that survives changes in handbook drafting.
The decision drove substantial changes in conveyancing practice. Separate representation of lender and borrower is now more common, especially in commercial conveyancing. Where joint representation continues, firms must have robust file-review systems to identify disclosable matters. PI insurers should expect lender-claim exposures wherever conveyancing volume is high, and should scrutinise underwriting for adequacy of internal disclosure systems.
Bowerman also feeds directly into the SAAMCO scope-of-duty analysis: the solicitor’s duty to disclose is part of the information-providing/advice continuum that determines recoverable loss. Hughes-Holland v BPE Solicitors [2017] UKSC 21 confirmed that solicitors typically provide information (not advice), with quantum limited accordingly. The interaction of Bowerman (breadth of duty) and SAAMCO/Hughes-Holland (limit on recovery) is fundamental to modern lender-claim defence.
By Matt Bartlett, Director, on 2026-06-06. Next review: 2026-12-06.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-06. Apex Insurance Brokers Limited, FCA FRN 724952, Companies House 07014570. Not regulated advice — consult your broker on your specific position.
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