Joseph Thaliyan

INDEPENDENT LEGAL ADVICE / ILA

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Independent Legal Advice means impartial advice provided by an independent solicitor to a person without any conflict of duty or interest and provided in the best interest of that person.

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The advice will be provided at a face to face meeting in the absence of any other related parties and giving the advice using non-technical language.

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The client does have a choice on whether to sign the relevant document or Deed (eg: charge/guarantee or consent to mortgage etc.) with the decision being up to the client alone.

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REASONS FOR OBTAINING ILA

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A mortgage/loan facility will be affected by the misrepresentation or undue influence of a third party (Guarantor/Surety). The law relating this has undergone several changes and the important landmarks cases relating to it are the House of Lords cases, Barclays Bank v O’Brien, CIBC Mortgages plc v Pitt and Royal Bank of Scotland v Etridge.

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Disputes relating to these type of cases are analysed on the basis of the application of the Doctrine of Agency and Doctrine of Notice.

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The House of Lords in Etridge has made clarification to the law on undue influence. To avoid the risk of being sued by a Guarantor/Surety because of undue influence can only be deflected by providing ILA to that person. Therefore, the Mortgage Lenders requires the Guarantor/Surety in a mortgage/loan to obtain ILA before the Guarantee/Surety is given.

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The underlying principle is to ensure that the guarantor/surety clearly understands the transaction. The Solicitor should fully explain to the guarantor/surety the extent of the liability into which they are entering. The guarantor/surety should understand and know that they will not be able to dispute or challenge the guarantee or surety provided after they have signed it. The proposed transaction should be explained in simple and non-technical language. 

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A mortgage lender can effectively exclude the consequences of having constructive notice of undue influence by evidencing that the victim of the undue influence in fact gave informed consent. Therefore, the lenders ensures that the person receives independent legal advice before the deed or agreement is signed.

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It will be a pre-condition of the mortgage loan/facility and the Solicitor acting for the Mortgage Lender will request the Guarantor/Surety to obtain ILA from an independent Solicitor who is not related or linked to any of the parties involved in the transaction.

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PROCESS OF ILA

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• You book appointment with us

• Provide us with all the information required

• Meet face to face 

• We will analyse the entire information received

• We will confirm our advice in writing

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COMMON MISUNDERSTANDING ABOUT ILA

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There is a common misunderstanding that obtaining ILA means the Solicitor simply sign the ILA certificate or witness the Deed. This is a completely wrong notion. The Solicitor will first analyse the circumstances of the guarantor/surety, the relationship between the parties involved, the details of the transaction, the details of the mortgage/loan facility etc. The Solicitor may have to work couple of hours to study the above details and then only decide whether to provide the ILA certificate. Instructing the Solicitor for ILA does not mean that the Solicitor will provide the ILA certificate. The ILA certificate will only be provided if the Solcitor is satisfied that all criteria are met.