This case study is an anonymised composite based on publicly reported PI claim patterns. It is not actual Apex client data and does not constitute legal or insurance advice. Names, locations and identifying details have been changed. Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority, FRN 724952.
A four-partner high-street practice in a southern market town, around £2.1m fee income, with conveyancing producing roughly 38% of turnover. The firm runs a tight ship — Lexcel accredited, with a long-tenured conveyancing team and the usual mix of residential sale, purchase and remortgage work for local clients and a few London relocators.
The firm was instructed to act for the seller of a tenanted three-bedroom property held in the name of a Mr K, an absent owner who lived overseas and had owned the property mortgage-free since 2007. Initial contact came by email through the firm’s online enquiry form. ID was provided by way of a high-quality scan of a passport, a recent utility bill at an address in Dubai, and a short notarised certificate from a notary in the UAE confirming the client’s signature. The conveyancing executive ran the documents through the firm’s electronic verification provider and a clear result was returned. Source-of-funds enquiries were not the focus because the client was a seller, not a purchaser.
The buyer’s solicitor raised standard pre-contract enquiries. Replies were given. The contract was exchanged at £465,000 with a 10% deposit released to the seller’s solicitor on exchange. Completion took place five weeks later and net proceeds of approximately £452,000 were remitted to a Dubai bank account in the name of Mr K — the same account that had appeared on the notarised certificate.
Three months later the real Mr K, having returned to the UK to deal with a tenancy renewal, attended the property to discover new occupiers, a Land Registry entry he did not recognise, and a buyer who had paid him nothing. He had never instructed the firm. The passport and notarisation were forgeries. The utility bill was fabricated. The tenants in occupation had been served with a section 21 notice by the real Mr K eight months earlier and the imposter had timed the fraud to coincide with the vacant possession date.
The fraud followed a pattern reported repeatedly by the SRA throughout the post-Dreamvar period: a mortgage-free property, an absent overseas owner, a tenanted asset and a clean electronic ID check that masked a sophisticated forgery.
The real Mr K sued both the firm acting for the buyer and the firm acting for the impostor “seller” (our insured), seeking restoration to the register and damages for breach of trust, breach of warranty of authority, and negligence. The claim totalled approximately £528,000 (consideration plus stamp duty, costs and interest), with parallel claims against the buyer’s lender for an indemnity under the CML/UK Finance Handbook.
The principle from P&P Property Ltd v Owen White & Catlin LLP [2018] EWCA Civ 1082 and Dreamvar (UK) Ltd v Mishcon de Reya [2018] EWCA Civ 1082 governed. Both seller’s and purchaser’s solicitors held the completion monies on trust on terms that required completion of a genuine transaction. A fraudulent seller meant the trust terms were not satisfied, and the seller’s solicitor was liable for breach of trust regardless of whether ID checks had been carried out competently. The claimant’s solicitors leaned heavily on the strict-liability framing.
Notification was made within four working days of the firm being contacted by the real Mr K’s solicitors, comfortably inside the section 5 Insurance Act 2015 requirements and the SRA Minimum Terms and Conditions (MTC) on prompt notification. The MTC wording cannot exclude losses arising from dishonesty of third parties acting on the firm’s instructions, and breach of trust on completion monies is squarely a covered head.
The £2m each-and-every-claim limit was untroubled by the quantum. The £15,000 self-insured excess applied. Defence costs were paid on an “in addition to limit” basis, as the firm’s MTC-compliant wording required. The insurer instructed leading conveyancing PI defence counsel and, after detailed argument on the apportionment between buyer’s and seller’s solicitors and a brief mediation, the seller’s-side liability settled at approximately 60% of the recoverable loss — around £316,000 inclusive of interest and contribution to the claimant’s costs.
There was no aggregation argument; this was a single unifying event. The insurer waived its rights under the firm’s “innocent partner” clause given clear evidence the conveyancing executive had followed the firm’s documented procedure, even though that procedure was retrospectively judged inadequate against post-Dreamvar standards.
The matter resolved by Tomlin order after mediation. The SRA opened an investigation, which closed with a Letter of Advice rather than disciplinary action, accepting that the firm had since materially upgraded its ID and source-of-instruction procedures. The firm’s PI renewal six months later saw the premium rate-on-fees rise by approximately 47% and the excess double, and one of the firm’s previous panel insurers declined to quote. Two replacement markets were sourced and the firm continues to trade with no restriction on its conveyancing work.
Three points carry across the profession. First, electronic ID checks are necessary but not sufficient against sophisticated impersonation; absent-owner, mortgage-free, tenanted properties remain the highest-risk category and warrant additional steps — video verification, contemporaneous correspondence trail, and a second-channel call to a previously verified number. Second, the firm’s PI wording should be benchmarked annually against MTC for any unintended narrowing — bolt-on cyber and crime wordings sometimes purport to be the “lead” cover for impersonation, but the MTC is the senior wording and ought to respond first. Third, when notifying, the wording of the notification letter matters: notifying “a claim” prematurely can crystallise issues the insurer wanted ranged more broadly under a “circumstance” notification. Get coverage advice on the form of notification before sending.
We would have read the firm’s renewal disclosure carefully alongside the firm’s own conveyancing risk MI — the volume of tenanted, mortgage-free, absent-owner sales is a question every solicitor PI underwriter is now asking. At the point of incident, we sit alongside the firm in framing the section 5 notification and managing the SRA touchpoint. At the following renewal we would have approached an explicitly broader market than the two-or-three insurer rotation many firms accept by default — the difference between three quotes and seven on a post-Dreamvar conveyancer is typically a six-figure decision over a three-year cycle.
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