Independent Legal Advice Certificate
Our Independent Legal Advice Certificate template:
- use for legal charges or guarantees
- expertly-drafted template for peace of mind
- protects your security
- ensures compliance with case law and best practice
- easy to edit and complete
How Does It Work?
This template for an Independent Legal Advice Certificate is intended for use either:
- where someone is giving a legal charge as security for a loan and the lender is under a duty to ensure that person receives the benefit of independent legal advice before signing the security documentation. See the heading below: The Etridge Case; or
- where a guarantor is being asked to sign a personal guarantee of someone else’s debt, loan, or other obligations and the lender wants them to have the benefit of independent legal advice before signing (this is best practice).
For item 1 above, such an event commonly occurs when the husband borrows money to fund his business and, in return, he grants a legal charge or mortgage over the family home in favour of the lender. In such a case, the borrower and lender would need the wife’s consent to the charge’s going in place. She would need to sign the charge or mortgage, so that she defers her rights to the lender’s (usually being a bank). Even if she is not on the title deeds to the house you will still need her consent, as she will have the right to occupy the house.
For item 2 above, if you need a template for a personal guarantee, then just click here.
When to use our Independent Legal Advice Certificate template
Often the lender, if it is a mainstream bank, will have its preferred form of certificate. If so, it will supply the draft and it will ask the wife’s independent legal adviser to sign it. However, if the lender is a private lender, then that is precisely when you can use our form of certificate. Also use it where the lender does not supply the necessary draft or does not have one.
If you are a private lender, you would still want to know the independent advice has been properly given before a legal charge is signed. (Technically it is optional, but is best practice and increasingly common, for lenders also to require this in the case of guarantees.) So it is for the benefit of both:
(a) the wife, so she knows what she is doing and the risks involved, and
(b) you as the lender, so that you know the wife cannot turn round later and say you failed to ensure she got independent legal advice on her rights before she signed them away.
If you did fail to ensure she obtained such independent advice, then:
- you might find the security against her interest or rights in the property is void, and
- as a result, you might be unable to repossess the home or evict her.
The Etridge case
The lender has a duty to the wife in accordance with an English legal case. The case was Royal Bank of Scotland plc v Etridge (No 2), from 2001. The outcome of that case is why this form of certificate can be useful. It is also why the independent legal advice is mandatory in similar circumstances. It protects both the wife’s interests and those of the lender in the case of legal charges. You can read more about this case and how it applies here: https://en.wikipedia.org/wiki/Royal_Bank_of_Scotland_plc_v_Etridge_(No_2).
Using our Independent Legal Advice Certificate template
You will find our template exceedingly easy to use. A UK solicitor who is knowledgeable about English banking law drafted it, so you know you can rely on it.
You should either:
(a) give it to the person needing the independent advice to take to her solicitor, or
(b) send it to the solicitor advising her.
The solicitor will know how to complete it. For this reason, it does not come with any separate guide as to its completion and use, as our other templates do. However, if you have any queries about it, just contact us.
Once the solicitor has completed and returned it and you have the signed legal charge or guarantee back from the person due to sign it, then you should keep the certificate safe with the original of the legal charge or guarantee in case of the need to prove the person signing it:
- was duly and independently advised, and
- indeed understood the nature of what they were signing.