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ARTICLE · 05 DECEMBER 2016

Damages For A Breach Of Undertaking

Dillon Eustace
Dillon Eustace
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The Irish Supreme Court has recently considered the compensation to which a lender is entitled from a solicitor who misapplies monies advanced on foot of an undertaking.

IrelandLitigation, Mediation & Arbitration
Peter Bredin
Peter Bredin
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The Irish Supreme Court has recently considered the compensation to which a lender is entitled from a solicitor who misapplies monies advanced on foot of an undertaking. The court concluded that compensatory damages were payable to the lender.

The undertaking in this case was given by a firm of solicitors to Allied Irish Bank plc. The solicitors had undertaken to discharge from the AIB loan a debt owed to another lender, so that AIB would have a first ranking charge against the relevant property.

AIB advanced the loan in June 2007 on foot of its standard form solicitor's undertaking. In breach of the undertaking and of professional ethics, the solicitor concerned applied the AIB loan to another project in which the borrower was involved, rather than repaying the prior lender's loan. None of the partners in the firm had any role in the wrongdoing.

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