NES solicitors were approached by a new (apparently wealthy) client and asked to provide an undertaking to pay Halliwells £1.5 million as part of a share purchase agreement. NES’s client provided a “gold delivery certificate” purported to be worth £10 million as supposed security. The partners of NES, in reliance on the certificate, but knowing the funds had not cleared, gave the solicitor’s undertaking. The certificate was later found to be worthless.

NES failed to honour the undertaking and was sued by Halliwells. Halliwells obtained summary judgment. The professional negligence insurers of NES, Quinn, refused to pay the claim made by NES on the basis that:

  1. the partners of NES were dishonest or condoned dishonesty;
  2. the undertaking was not given in a solicitorial capacity; and
  3. the undertaking was given for the benefit of NES (i.e. their £15,000 fee)

This was a notable case as it was a rare examination of insurer’s grounds for declinature, but also an early application of Starglade Properties Limited v Nash [2010] EWCA Civ 1314 regarding the Civil test of dishonesty of a solicitor.

At trial it was held that NES had acted dishonestly, accordingly the Professional Indemnity Insurer was not required to provide an indemnity.


Solicitors should always carry out the requisite money laundering checks and consistently be on the look out for unusual transactions. Giving an undertaking in a ‘solicitorial’ capacity requires substantive legal advice to have been given or a legal service provided. Undertakings have to be given in connection with legitimate legal work and not merely in order to receive remuneration.

How we can help

Lupton Fawcett is a leading full-service law firm in Yorkshire. Within our ranks we have a team of dedicated commercial litigation solicitors spread across our office locations in Leeds, Sheffield, and York. Within every area of law, we put your interests first and where disputes occur, it pays to have specialist experience fighting your corner.  We provide a personalised service, with sector specialists and extensive resources to ensure we provide the best solutions to your problems.

Lupton Fawcett has long been recognised for our expertise in settling disputes with positive outcomes for our clients, and we regularly act for clients throughout the United Kingdom. We can support your needs wherever you live in England, Wales & Ireland. For more information, call today or complete the enquiry form and we will get back in touch with you quickly.

Please note this information is provided by way of example and may not be complete and is certainly not intended to constitute legal advice. You should take bespoke advice for your circumstances.

Get In Touch Today!

Get In Touch Today!

Please complete this form to make an enquiry and we will get back to you as soon as we can.

Remember you can still call us on 0333 323 5292 or email us at

  • This field is for validation purposes and should be left unchanged.