On 15th May 2018, the Court of Appeal published its long awaited judgment in the joined appeal cases of P&P Property Ltd v Owen White & Catlin LLP (P&P) and Dreamvar v Mishcon de Reya (Dreamvar).

Both cases concerned an increasingly common conveyancing fraud known as a ‘property hijack’, which involves a fraudster selling a property that it does not own before disappearing with the sale proceeds. The innocent buyer is then left out of pocket having committed the purchase price but not having acquired the property in return.

The judgment deals with the liabilities owed to duped buyers by both their own lawyers and those acting for the fraudsters - where there has been a failure to adequately identify the party providing instructions to the “seller’s” lawyer. There was no suggestion, in P&P or Dreamvar that those acting for the fraudster knew of the fraud.

Without addressing the technical aspects of the various claims made against both sets of lawyers in Dreamvar and against the seller’s lawyers in P&P, the headline is that the lawyers acting for the fraudsters in both cases were liable to the buyers and (to the surprise of many) the lawyers acting for the buyer in Dreamvar (Mishcon de Reya) were also liable to the buyer, even though there was no finding that Mishcon de Reya had been negligent. Note: no claims were made against the buyer’s lawyer in P&P.