Swindle v Harrison (1997)
• A solicitor arranges for his firm to give out a loan to one of his client's, so that she may complete a transaction for a restaurant.
• The solicitor fails to disclose relevant facts, such as the profit that his firm would make on the loan.
• The restaurant resulted in loss and the client claimed that her solicitor was liable for the losses suffered from the restaurant since, but for the loan his firm provided, she would not have completed the transaction for the restaurant and then suffered the loss.
• Held: whilst the bridging loan agreement could be rescinded the loss resulting from the restaurant was not caused by it, and thus no equitable compensation could be awarded to the client.
Hilton v Barker, Booth & Eastwood (2005)
• Another case which lead to equitable compensation. See above for the facts of this case (under the section: "The 'No Conflict' Rule").
• Note the difference in result in regards to equitable compensation cases: the level of involvement of the fiduciary is important. Where the fiduciary knowingly does something that is clearly not in the best interests of his client to the point that he risks loss arising, such as failure to disclose a history of fraud of the other party to the transaction (Hilton), or advising the release of a property leading to a mortgage becoming less secure (Nocton), the court is inclined to hold the fiduciary liable for the losses arising from the transaction.
• Where the fiduciary could not be reasonably seen to believe his breach would lead to loss, such as granting a loan necessary to start a restaurant business, his breach of fiduciary obligation is rightly not attributable to losses that do arise.
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