In these unprecedented times, Axiom Stone Solicitors will, in common with other businesses, be following the Government's official advice on social distancing and social isolating.

Public health measures must have the highest priority and, as a result, some staff will be working from home. Also, our offices will be closed to visitors.

However, we wish to reassure existing and potential clients that we will continue to provide the highest levels of service.

Please be assured we have a robust business continuity plan in place that is designed to minimise the impact on our service to you.

In addition, please continue to contact us electronically or by phone in relation to the progress of your matters or on any issues of concern to you.

Until further notice, service of claim forms, application notices and all other court documents and contractual notices must be made to our head office only (we shall not accept service through any other means). Our head office address is at Axiom Stone Solicitors, Axiom House, 1 Spring Villa Road, Edgware, Middlesex, HA8 7EB. We ask that all other correspondence be sent by email to the relevant member of Axiom Stone Solicitors. In the event that service of court documents or contractual notices is attempted by post, courier, DX, or fax to any address other than that of our Head Office, we cannot provide any assurance that they will be received or processed. We are grateful for your understanding at this time.

We will update this information regularly on our website (Please see COVID-19 Updates Here) and via social media.

Finally, we urge everybody to follow the official advice on fighting the virus outbreak so enabling you to stay safe and well.

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Advice from the experts on Personal Guarantors seeking Independent Legal Advice

Article by Rima Sengupta, Senior Associate, Axiom Stone Solicitors

Recently, our clients have been asking us whether they can waive the requirement of providing an Independent Legal Advice (“ILA”) due to social distancing during the COVID-19 Pandemic.

ILA is required to avoid doubts of undue influence. The individual guarantor can be presumed to be unduly influenced by the borrower when there is a non-commercial relationship between him/her and a borrower (Etridge)*. Lord Nicholls’ judgement in Etridge case expresses that individual guarantor should have a face-to-face meeting with the solicitor to be informed of the potential risks involved.

We advise you on best practice tips to follow when obtaining personal guarantees from individuals to avoid circumstances where the court upholds that the ILA was not properly obtained:

1 Always require the individual guarantor to appoint an independent solicitor to provide him/her with legal advice on the potential consequences of entering into the guarantee, and request evidence of such (in the form of a certificate of execution signed by the appointed solicitor);

2 The lender should check and approve the solicitor/law firm which is appointed by the individual guarantor to provide the requisite ILA. Due to the COVID – 19 crisis, as an exception, to this extraordinary situation the lender may approve that another solicitor from the same firm, who is wholly unrelated to the current transaction, provides the ILA to the individual guarantor by building Chinese walls;

3 Ensure that the appointed solicitor writes to the individual guarantor following a face-to-face meeting with such guarantor maintaining social distancing norms setting out the advice given. However, if the individual guarantor is unable to receive the ILA in person due to the ongoing COVID-19 pandemic, then the ILA (for best practice) should be provided over a Zoom/Skype video conference call to ensure that the correct person is receiving the ILA.

4 The lender should ensure that the appointed solicitor has carried out due diligence on the individual guarantor and knows the background of the lending transaction, as a way of ensuring that sufficient legal advice has been provided to the guarantor. The ILA certificate should specifically address this point.

5 Client Due Diligence (“CDD”) can also be carried out online. First, receive a scanned copy of the passport and utility bill (no older than three months) from the individual guarantor. Then, verify the documents as a true copy of the original document over a Zoom / Skype video conferencing call. For evidence that you have verified the KYC documents over a video call, you must screenshot a clear picture of the guarantor’s face with the front page of their photo ID (passport/driving licence) next to them. The individual guarantor should confirm that he is alone and has not been coerced into providing the personal guarantee.

6 With businesses becoming insolvent, especially due to COVID-19, before a drawdown of a loan facility, one must ensure to carry out an insolvency/bankruptcy search on the borrower. Use an agent to carry out an expedited insolvency/bankruptcy search on the borrower before completion of the transaction.

 


 

* Royal Bank of Scotland v Etridge (No 2) and other appeals [2001] 3 FCR 481