Poor practice is not proof of dishonesty: Court of Appeal decision

The Court of Appeal has allowed the appeal of a firm of solicitors against a first instance finding that, through the conduct of one if its partners, the firm had dishonestly assisted in breaches of fiduciary duty by the claimant’s former directors: Grosvenor Property Developers Limited (in liquidation) v Portner Law Limited [2026] EWCA Civ 1238. 

The judgment confirms that dishonesty cannot be established simply by asking what an honest professional would have done in the circumstances: the court must first ascertain what the individual solicitor actually knew or believed, before judging that state of mind against ordinary standards of honesty. The court also confirms that a professional can only be said to have deliberately turned a blind eye to wrongdoing if he or she had a specific (or “targeted”) suspicion about particular facts, and chose not to look into it. However serious a professional's failings, the judgment confirms, they remain failings of competence unless this higher threshold is met.

The facts illustrate just how demanding that standard is in practice. Despite findings that the solicitor in question had made false certifications to lenders and persistently failed to comply with his own firm's anti-money laundering requirements, the Court of Appeal held that, applying the correct test, this fell short of dishonesty. A pattern of carelessness that the trial judge was prepared to describe as "knowingly cutting corners,” and conduct at points found to be "incredible", was not sufficient.

For further detail, see our post on the Litigation Notes blog here.