Negligence Claim Against London Law Firm Dismissed Over Lack of Causation

A recent ruling has highlighted the vital importance of causation in professional negligence claims, even where a breach of duty is arguable.

In El Basyouni v Anthony Gold Solicitors, the High Court dismissed a negligence claim brought against the well-known London law firm, finding that the alleged error did not, in fact, cause the claimant’s loss.

The decision underscores a familiar, but often overlooked, point: establishing negligence is only half the battle. To succeed in a claim, a claimant must also prove that the breach directly led to their loss. In this case, the court concluded that it did not.

The Facts Behind the Claim

The claimant, Mr Taha El Basyouni, was in the process of purchasing a property in Croydon for £850,000. Clydesdale Bank had agreed to lend approximately £637,000 towards the purchase. To cover the balance – including stamp duty, legal fees and charges for delayed completion – Mr El Basyouni secured a private short-term loan.

However, the law firm acting for him, Anthony Gold Solicitors (AG), initially informed the lender that this money was a gift. This was later corrected, but by then, Clydesdale had already rekeyed the application. Upon reviewing the revised financial position, the bank withdrew the mortgage offer.

Unable to complete the transaction, and following a notice to complete, the seller rescinded the contract.

The Legal Argument

Mr El Basyouni alleged that AG’s initial mischaracterisation of the funds as a gift amounted to professional negligence and caused the failure of the transaction. He argued that, had Clydesdale not been misinformed, the mortgage would not have been rekeyed or withdrawn, and the sale would have gone ahead.

AG accepted that its initial communication to Clydesdale may have been incorrect, but sought summary judgment on the basis that the claim had no real prospect of success.

The Court’s View on Duty and Causation

Master Brightwell agreed that there was at least an arguable case that AG had breached its duty. Conveying incorrect information to a mortgage lender without explanation, he noted, would usually be sufficient to raise a triable issue of breach.

However, the key issue was causation. The court found no evidence to suggest that the incorrect information was the reason Clydesdale ultimately revoked its mortgage offer.

Instead, the decision appeared to be driven by the nature of the funding: a short-term loan that was not disclosed in the original mortgage application and would need to be repaid, with £15,000 interest, within three months. From the lender’s perspective, this introduced a significant risk to the borrower’s ability to repay the mortgage.

Critically, Clydesdale made the decision to withdraw several days after being informed that the funds were a loan rather than a gift. Master Brightwell held that the correction, not the original error, was what prompted the reassessment.

As he put it, “common sense” would suggest that a gift, with no expectation of repayment, is likely to be viewed more favourably by a lender than a substantial short-term loan.

A Reminder on Causation in Negligence Claims

The judgment is a timely reminder that, to succeed in a negligence claim, the claimant must prove that the breach caused the loss – not just that it occurred.

Even if a solicitor makes a mistake, it won’t result in liability unless that mistake can be shown to have made a real difference to the outcome. In this case, the court concluded that the transaction failed because of the nature of the funding arrangement – not the solicitor’s initial misstatement.

As a result, Master Brightwell held that the claim had no realistic prospect of establishing causation or loss, and granted summary judgment in AG’s favour.

Advice for Professionals Facing Similar Claims

For law firms and other professionals facing negligence allegations, this case offers reassurance. A breach of duty, if proven, does not automatically mean liability. If causation cannot be established, a claim may still be dismissed before trial.

At Nelsons, our dispute resolution team regularly advises clients on both sides of professional negligence claims. Whether you’re seeking to bring a claim or defend one, we offer practical, strategic guidance to help you reach a resolution.