Nick Bird & Andrew Williamson welcome clarification of the duty professionals owe their clients
The decision in Haugesund Kommune and another v Depfa ACS Bank [2011] EWCA Civ 33, [2011] All ER (D) 226 (Jan) will come as a relief to law firms that advised local authorities or banks entering into complex financial deals before the economic downturn. It is also good news for solicitors generally, as it shows that the Court of Appeal is prepared to apply strictly the principles laid down in South Australia Asset Management Corporation v York Montague & Ors [1997] AC 191, [1996] 3 All ER 365 (SAAMCo) in order to limit a solicitor’s liability for losses that fall outside the scope of their duty.
Background
Depfa entered into swap agreements with two Norwegian local authorities, Haugesund and Narvik (the Kommunes), in 2004 and 2005. It advanced a capital sum to the Kommunes which in turn agreed to make fixed quarterly payments for the duration of the swaps together with a “bullet” repayment of the outstanding interest and principal at the end of the fixed period.
Depfa obtained
