What is Independent Legal Advice?

Over the past few decades, there has been more pressure placed on financial institutions, employers, companies and solicitors to obtain independent legal advice for their clients before entering into contracts.

This is primarily due to those same clients making claims that they were not advised properly on the contract they signed. Many claims stem from clients who say they did not fully understand what they were agreeing to.

In this article, our solicitors break down what it means to consult independent legal advice. If you’re in need of legal help, contact our team on 0203 007 5500.

What is independent legal advice?

Independent legal advice is when clients get formal advice from a solicitor who is not connected to a transaction, drafting of a particular contract, or selling of a product. That solicitor is considered separate from the other parties involved in the contract, and therefore independent.

Your solicitor will be asked to complete a certificate of independent legal advice which is then included in the agreement or contract. Without such independent legal advice, an agreement might not be enforceable by one of the parties that rely on it.

One example is when a customer enters a bank for a mortgage. The bank will likely ask that the customer seeks independent legal advice from a solicitor before entering into the mortgage agreement. This is both to protect the bank from any legal action from the customer whilst making the latter aware of all the terms and conditions of the mortgage. This ensures they understand the consequences of such an agreement. However, without a completed certificate of legal advice, the parties may find it difficult to enforce elements of the agreement.

What do your solicitors give independent legal advice on?

Our solicitors can give independent legal advice in the following areas.

• Personal guarantees from directors of a company (on debentures, deeds, loans including bridging loans and mortgages)
• Personal guarantees (where a separate and independent person guarantees the repayment of a mortgage or other type of facility made to someone else)
• A standard form third-party legal mortgage over a property (usually known as a legal charge) given by a company in favour of another corporate lender securing a specific sum owed by another party to the lender.
• Consent to Mortgage form by Occupier
• Prenuptial agreements – including disclosure
• Post-nuptial agreement
• Springboard family mortgages which allows family or friends to help secure a mortgage
• Transfers of Equity
• Equity Release
• Settlement agreements or employment termination agreements including COT3 agreements
• JBSP (Joint Borrower Sole Proprietor)

During a transaction, you may find yourself in a situation where you are being told that you must take independent legal advice. Typically, it is required for a matter that is critical for the completion of a transaction.

How does independent legal advice protect me?

Clients often think this advice is simply another way of solicitors making money. However, it is essential that there is fairness and equality when entering into contracts.

The purpose of independent legal advice is to ensure that both parties are on equal footing. It also highlights any areas where someone is being taken advantage of. It gives our solicitors the opportunity to review the legal document and advise the client on the possible outcomes.

We guarantee that our client understands the document properly and verify they are not under any undue influence or pressure to sign the document (this includes duress and coercion).

Documents, such as prenuptial agreements or postnuptial agreements, as well as deeds, bridging loans and mortgages, require independent legal advice to ensure the document is fair and valid. Paying the extra costs will be worthwhile to limit future costly litigation.

Entering into any of the agreements mentioned above will usually mean you agreeing to take on some kind of significant and potentially life-changing liability or, in some other cases, you will be given a waiver to some type of right without enjoying a personal benefit for so doing. It is advisable that you understand fully all the implications.

How much will this advice cost?

Our basic forms of independent legal advice range start from £450 plus VAT. Cost of additional independent legal advice for individuals is usually £200 plus VAT. All clients will be required to produce original photo identification documents as well as a proof of address.