A High Court judge found a breach over deposit protection but no legal link to the claimant’s loss.
A solicitor negligence claim brought by Niprose Investments Limited against Vincents Solicitors Limited has failed, despite the High Court finding that Vincents breached a limited duty concerning the protection available for substantial property deposits.
His Honour Judge Hodge KC, sitting as a High Court judge in the Business List of the Chancery Division in Manchester, handed down judgment on 16 September 2026 following a three-day trial in July.
The case concerned Niprose’s purchase of eight units in ‘The Rise’, a partly buyer-funded, off-plan residential development on Low Hill in Liverpool. The claimant paid £37,475 for each unit on exchange of contracts, representing 50% of the balance of each purchase price. Its deposits totalled £299,800, in addition to £3,796 paid in Vincents’ fees and disbursements.
The development was never completed. The finance company partly funding it, Amicus Finance Plc, entered administration in December 2018, while the developer and seller, Hill Top Rise Limited, subsequently entered compulsory liquidation. The claimant ultimately lost its deposits.
The claimant argued that Vincents had failed to advise adequately about the risks of the transaction, including the lack of meaningful security for the deposits, and should have advised it not to proceed.
The judgment records that Vincents’ Report on Title expressly warned that the deposit was not a market-standard residential conveyancing deposit. It explained that the arrangement involved pre-payment of a substantial part of the purchase price and effectively provided development finance to the seller. It also warned that if the developer or seller failed between exchange and completion, money released to the seller could be lost.
The Report also stated that a deposit protection scheme had been sought but rejected, meaning that it might be difficult or impossible to recover sums paid to the seller if the transaction failed.
The Solicitors Regulation Authority’s 23 June 2017 Warning Notice was also sent to Mrs Ruth Nickoll, the claimant’s sole director and majority shareholder, as an attachment to an email from Vincents.
The judge nevertheless found that Mrs Nickoll understood the principal risks identified in the Report on Title and the SRA Warning Notice. She was found to have read the warning and understood the substantial risk that the development could fail and the deposits could be lost.
However, the judge found that she did not appreciate the true limitations of the protection provided by Schedule 2 to the Agreement for Sale.
Limited breach established.
Judge Hodge found that Vincents had breached its duty only to the extent that it failed to advise the claimant about the true meaning and effect of the deposit-release mechanism in Schedule 2 and the limited protection it provided.
The judge rejected the wider allegations that Vincents should have advised the claimant not to proceed or failed to ensure that it understood the transaction’s broader risks.
The claimant established factual causation: had Mrs Nickoll understood the true limitations of Schedule 2, the judge found that Niprose would probably have withdrawn from the transaction.
That, however, did not establish a right to damages.
Applying the scope-of-duty and duty-nexus principles discussed by the Supreme Court in Manchester Building Society v Grant Thornton UK LLP, the judge held that the claimant had to establish that its loss fell within the scope of the duty Vincents had breached.
The relevant risk covered by that duty was the possibility that deposits could be released other than for the purposes permitted by Schedule 2, such as marketing, construction and completion of the development.
The duty did not extend to the risk of the developer’s insolvency or the development failing for reasons unrelated to an unauthorised or improper release of the deposits. The claimant produced no evidence that any weakness in the deposit-release arrangements caused its loss.
The judge therefore found that the necessary legal connection between Vincents’ breach and the claimant’s lost deposits had not been established. The duty-nexus issue was answered in Vincents’ favour, which barred recovery of damages.
The claimant had sought £303,596, comprising the £299,800 deposits and £3,796 in fees and disbursements. Had liability been established, the judge said damages would have been assessed at £283,800, after allowing a £16,000 cashback as a counter-credit and excluding Vincents’ fees.
The claim was dismissed. A consequentials hearing has been listed remotely for 23 September 2026, with written submissions due by 10am on 21 September.