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Royal Bank of Scotland v Etridge [2001]


  • 8 conjoined appeals concerning undue influence and, more specifically, suretyship transactions


  • How could undue influence claims concerning mortgages succeed?


  • See reasoning; in Etridge itself there was no undue influence


  • Actual undue influence and presumed influence amount to the same thing, differing only in how they are proven
  • Actual undue influence is proved by the conduct of the ‘stronger’ party
  • Presumed undue influence is proved by showing firstly that there is a relationship of trust and confidence between debtor and surety (usually husband and wife) and that the transaction which took place calls for an explanation. This creates a rebuttable evidential burden of proof on the defendant (the legal burden remains on the claimant to prove undue influence)
  • Manifest disadvantage is not relevant to undue influence
  • In a suretyship transaction, a bank is put on notice in any non-commercial surety-debtor transaction
  • Once on notice,  a bank must take reasonable steps to satisfy itself that the risks associated with the transaction have been bought home to the surety
  • Reasonable steps include a private (without husband) meeting with a solicitor, who must certify that the nature of the documents, risks, and other options have been discusses, as well as the surety having been given a choice whether or not to proceed. The bank is not liable for deficient advice unless it has reason to believe that advice was so.
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