Seven years on from Barclays Bank plc v O’Brien the Law Lords, on 10 October 2001, revisited undue influence in Royal Bank of Scotland plc v Etridge (No.2) [2001] UKHL 44. Lord Nicholls set out a new blueprint for solicitors and bankers advising those who give security for the debts of another, and provided a review of basic principles.
What is undue influence?
Undue influence is the term used to describe the relief developed by the courts of equity to protect those who enter into transactions as a result of the improper influence of another. Since 1990 the courts and lawyers have used the labels "Class 1" and "Class 2" to distinguish between cases of actual undue influence (Class 1) and cases where undue influence is presumed from proof of a relationship of trust and confidence and manifest disadvantage to the complainant (Class 2).
