Niprose Investments Ltd v Vincents Solicitors Ltd [2026] EWHC 2320 (Ch)

1. In the recent first instance High Court case of Niprose Investments Ltd v Vincents Solicitors Ltd [2026] EWHC 2320 (Ch) (‘Niprose’) His Honour Judge Hodge found that on the particular facts of the lead Claimant’s case there was no duty on the conveyancing solicitor to advise the Claimant against entering into the transaction as there was (i) nothing discoverable to suggest that it was a rash, or unwise transaction, (ii) nothing to indicate that the development involved any dubious investment scheme. It is notable that this was a multi-claimant action where all of the other lead claimants’ claims had been settled and permission had been refused to amend the particulars of claim and perhaps of particular importance it appears from the judgment that there was no pleaded case or evidence that the development was dubious or fraudulent. I note the following paragraphs of the judgment

2.The claim arises out of the claimant’s purchase of eight units in a partly buyer-funded, off-plan residential development scheme marketed as ‘The Rise’ on Low Hill in the City of Liverpool. The development was never completed, apparently because the finance company (Amicus Finance Plc) that had been partly funding the development fell into administration in December 2018. On the failure of the development, the claimant lost all of its 50% up-front deposits. Vincents acted as the claimant’s conveyancing solicitor, having been introduced to the claimant by the developer through its marketing agent, Certa Invest Ltd.’

‘4. On or about 27 November 2017, the claimant paid an up-front, non-refundable reservation fee of £5,000 for each of the eight units even before retaining Vincents to act as its solicitor. On exchange of contracts, on 26 April 2018, the claimant paid a large, up-front ‘deposit’ of £37,475 for each of the eight units, representing 50% of the balance of the purchase price. In total, the claimant paid over £299,800 to the seller’s solicitors. It also paid £3,796 by way of Vincents’ fees (which were payable on exchange of contracts). The development held out both the possibility of capital appreciation, and the ‘promise’ of a guaranteed rental income, equivalent to a return of 8% per annum, for five years after completion. The development was partly ‘buyer funded’ in the sense that the deposit monies were payable to the developer’s solicitor which (in accordance with clause 4.2 of the purchase contract) held them ‘as stakeholder for the seller’ (i.e. the developer). These funds were then to be released on the terms provided in Schedule 2 to the purchase contract (headed ‘Deposit Release Terms’). These permitted them to be applied towards funding the marketing, sale, and construction costs of the development.’

‘83. I accept Mr Wilton KC’s submissions in preference to those of Mr Scher. Certain of the latter have already been addressed, and answered, by my findings in relation to Mrs Nickoll’s evidence. In my judgment, the SRA Warning Notice created no new duty on the part of conveyancing solicitors; nor did it seek to do so. It was concerned to focus the attention of solicitors (and potentially affected members of the public) on dubious or risky investment schemes, which were being presented as routine conveyancing transactions, or investment in land, when the reality was very different. It was intended to draw attention to the need to apply the conventional duties owed by solicitors to their clients in such situations to ensure that they fully understand risks that might well not be obvious to an inexperienced non-lawyer. It also reminded solicitors that “it may well be necessary to strongly advise clients against entering into the transaction”. It does not suggest that such advice should invariably be given. Nor, in my judgment, did it seek to extend the range of circumstances in which such exceptional advice should be given. Without seeking to provide an exhaustive account of all such circumstances, existing case law indicates that advice against entering into a transaction may be appropriate, and indeed necessary, in two principal sets of circumstances.’

‘84. The first, exemplified by Neushul v Mellish Harkavy, is where the client is proposing to enter into a rash, or even an unwise, transaction. The second (exemplified by the County Personnel case) is where the client is proposing to enter into a transaction which carries risks which should have been apparent to a professional legal adviser but would have been most unlikely to occur even to an intelligent lay person. It is, however, important to bear in mind the full circumstances of the County Personnel case. The prospective underlessor had not wanted the underlessee or his solicitors to know the rent that he was paying under the head-lease: see p. 922F. It was against that background that Bingham LJ (who delivered the leading judgment) stated that the solicitor should have advised the client that it should not consider entering into a lease

which contained the proposed rent review clause. But this was expressly “on existing information” and “as matters stood”: see p. 923F-H. At p. 927F Sir Nicolas Browne- Wilkinson V-C formulated the duty slightly differently, in terms of having “to warn the client plaintiffs of the risks involved in accepting such a clause, at least without knowing the rent payable under the headlease”. Clearly, both the need for any duty to advise against entering into a transaction, and the terms in which such advice is to be tendered, are extremely fact-sensitive.’

‘85. …there was nothing to indicate that this development involved any dubious investment scheme, masquerading as an investment in land, when the reality was very different. Nor is there any pleaded case, still less any evidence, that this was indeed the case. Everything indicates that this was a genuine property investment opportunity, which only failed because of the unrelated insolvency of its commercial funder. Mr and Mrs Nickoll undertook considerable due diligence in connection with the claimant’s investment, which continued throughout the five months between retaining Vincents to act as the claimant’s solicitor and exchange of contracts. There were clear risks attending the payment of substantial deposits to the developer’s solicitors with the limited protections contained within the agreement for sale. But Vincents had fully alerted the claimant to the resulting risks in stark terms, warning them that “buying off-plan properties presents a substantial risk that the developer/Seller could fail between exchange and completion”, in which event “Any monies you have paid, and will have released to the Seller would be lost.” ….. As Mr Wilton KC observed at the end of his oral opening…

Whilst it is obviously important that solicitors do their job properly because they fulfil a vital role in society; they are not nursemaids. They are not gatekeepers on commercial activity. It is unfair to treat them as such, absent exceptional facts. The reason it is unfair is because by such means one gets an unfair reallocation of risk and that is particularly pertinent in the context of an investment purchase, where risks are inevitable and they are the counterpart of reward and where we submit that those risks were adequately understood, not least because of the advice given by my clients.

In my judgment, and for these reasons, Vincents owed no duty to advise the claimant not to proceed with the transaction.’

2. From analysis of the judgment it does not appear that the lead Claimant’s claim included any allegations that the solicitor was negligent in failing to advise the lead Claimant that the investment was in an unauthorised collective investment scheme. The decision that ‘Vincents owed no duty to advise the [lead] claimant not to proceed with the transaction’ (para 85 of the judgment) is not helpful to Claimants seeking to bring claims against conveyancing solicitors who have lost their high deposits in “off plan” investment schemes. However, it is clear that a duty to advise a Claimant not to enter into a transaction is extremely fact sensitive (see paragraph 84) and the facts that applied to the lead Claimant in Niprose were such that one might not be surprised that such a duty was not found for that particular lead Claimant:

• • Nothing to indicate that this development involved any dubious investment scheme (para 85 of judgment). No pleaded case or evidence!
  • Stark warnings re: deposit – see Report:

‘3.6 The usual maximum deposit in a conveyancing transaction is 10% and it is paid to encourage that a buyer to complete the contract. The deposit required in this transaction is not a market standard deposit for a typical residential conveyancing transaction but involves both pre-payment of the price and effectively the providing of finance to the Seller. In this case buying off-plan properties presents a substantial risk that the developer/Seller could fail between exchange and completion. Any monies you have paid, and will have released to the Seller would be lost. We have raised this issue with the Seller’s Solicitor who have advised the deposit required is in line with other developers, and therefore for the time being are not willing to change this arrangement. Please find SRA Guidance in respect of the same.

3.7 Further, whilst we have probed the Seller’s solicitor in respect of providing some form of deposit protection scheme, unfortunately this has been rejected for the moment. Therefore it may be difficult (or even impossible) for you to recover any sums which you have paid to the Seller under the Contract, if, for instance the sale of the Property does not complete for whatever reason (for example, should the Seller be unable or refuse to complete or become insolvent or enter administration prior to your purchase of the Property).’

• • Copy of 2017 SRA Warning Notice sent to Claimant along with the Report.
  • Sophisticated Claimant:
    • The Claimant and her husband were the very opposite of naïve, unsophisticated purchasers (para 29 of judgment).
    • Claimant had ‘red lines’ that she required were met before she would agree to exchange of contracts. The Claimant’s husband had emailed Vicent’s to say ‘Once approvals have been granted and building works have commenced in earnest I shall be happy to exchange. Until then I am not, so please refrain from chasing us until the above criteria has been met’. (para 31 of judgment).
    • Claimant and her husband had delayed exchange of contracts by four months and changed certain terms of the transaction and demonstrated to Vincents a degree of sophistication, commercial acumen and sense (para 34/35 of judgment).
    • Claimant had ability to grasp even the minor details of the transaction, was financially sophisticated, aware and able to decide whether it was an investment which the Claimant should be pursuing (para 39 of judgment).
    • No need for Vincents to explain the relevance, or the impact, of the Warning Notice to her. Nor did she have any need for any bold, emphatic warning in the body of the Report on Title or its conclusion, in the covering letter, or in the contemporaneous email (para 51 of judgment).

3. Additionally, in Niprose it was held that Vincents were in breach of duty in failing to advise the lead Claimant that the deposits had no meaningful security or protection and that there was factual causation since the Judge found that the lead Claimant would not have exchanged contracts if she appreciated the true limitations on the protection afforded by Schedule 2 (see paragraph 104 of the judgment). However, there was no evidence before the Court that the lead Claimant’s deposit had been lost due to there being no meaningful security or protection. The only evidence before the Court was that the development failed and the lead Claimant’s deposit was lost due to the developer’s insolvency this being a risk which Vincent’s had adequately advised about (see paragraph 125 of the judgment).

4. Niprose is a first instance decision in the High Court (the same Court as any group “off plan” professional negligence claim will be issued in) and is merely persuasive rather than authoritative and is also limited to its particular set of facts.

This Case Analysis is provided for information purposes only, it does not constitute legal advice.

Written by Robert Whittock, PhD.