The False Recital and the Former Client's Confidential Spreadsheet
You are a solicitor at a three-partner firm. Your firm acts for Harrowgate Homes Ltd, which is buying a long lease of a retail park. The seller's solicitor sends a draft deed of variation of the 1987 headlease. The draft recites that 'the Tenant duly served a notice under clause 7.3 on 3 February 2025'. Your client's property director has told you, in an email marked 'without prejudice', that the notice was actually served on 10 February 2025, eight days late, and that the seller's solicitor 'probably doesn't know'. Your client wants you to sign the deed 'as is' because the recital is 'only background'. Separately, you discover that your firm acted for the seller, Mercian Estates, three years ago in a rent review negotiation, and you personally saw a confidential spreadsheet showing Mercian's minimum acceptable rent. Mercian is now a client of another firm. The deed is due for completion in seven days.
1. Can you sign the deed knowing the recital is false? Apply the SRA Principles and Code of Conduct.
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No. The SRA Principles 2019 require you to act in a way that upholds the rule of law and the proper administration of justice (Principle 1), to act with honesty (Principle 4) and integrity (Principle 5), and to behave in a way that maintains the trust the public places in you and in the provision of legal services (Principle 6).
The SRA Code of Conduct for Solicitors, paragraph 1.4, says you must not mislead, or attempt to mislead, your clients, the court or others, either by your own acts or omissions or by allowing or being complicit in the acts or omissions of others, including your client. Signing a deed that you know contains a false recital would be misleading the seller and anyone who later relies on the deed.
A recital is not 'only background': it is a statement of fact that can found an estoppel or be used in later litigation. You cannot act on the client's instruction to sign. You should tell the client, in writing, that you cannot sign, and explain why. You may offer to correct the recital to state the true date, or to delete it, or to add a qualification. If the client refuses, you may have to decline to act further.
2. What should you do about the confidential information you hold about Mercian Estates? Does it prevent your firm from acting?
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The firm holds confidential information about Mercian from a previous matter. The duty of confidentiality continues after the retainer ends (SRA Code, paragraph 6.3). The information is material: a spreadsheet showing Mercian's minimum acceptable rent could affect the deed of variation or the rent review.
Under paragraph 6.2, you must not act for a client in a matter where that client's interest is adverse to a current or former client for whom you hold material confidential information, unless effective measures have been taken to protect the information or the former client has given informed consent. Mercian's consent is unlikely. Effective measures may include an information barrier, but because you personally saw the spreadsheet, your knowledge is imputed to the firm; an information barrier may not be enough.
The firm should consider ceasing to act for Harrowgate. If it does not, it risks disqualification and professional sanctions. The firm should notify the client of the issue and, if necessary, help it instruct another firm. The firm should not disclose Mercian's information to Harrowgate.
3. What practical steps should you take in the seven days before completion, and what should you tell the client about the consequences of the false recital?
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Immediate steps: (1) do not sign the deed; (2) write to the client explaining the position and seeking instructions to correct the recital; (3) write to the seller's solicitor identifying the error and proposing a corrected deed; (4) check whether the late notice can be remedied - for example, by serving a fresh notice if the lease permits, or by obtaining the landlord's waiver; (5) consider whether a side letter or deed of confirmation can regularise the position without a false recital; (6) address the conflict issue with the firm's COLP and, if necessary, cease acting.
The client should be told that a false recital could be relied on as evidence, could found an estoppel, and could expose the firm and the client to claims. If completion is imminent, the safest course is to delay completion until the deed is corrected. If the client insists on proceeding, the firm should decline to act and consider whether it must report the matter. The firm should also check its professional indemnity insurance position.
The client may be frustrated, but the duty not to mislead is not negotiable. A corrected deed is in everyone's interest.