High Court dismisses Niprose Investments claim against Vincents Solicitors on duty nexus grounds

The High Court has dismissed a professional negligence claim brought by an investment company against its former conveyancing solicitors, despite finding a limited breach of duty, illustrating how the scope of duty principle established in Manchester Building Society v Grant Thornton continues to shape the outcome of solicitors' negligence claims.

In Niprose Investments Ltd v Vincents Solicitors Ltd [2026] EWHC 2320 (Ch), His Honour Judge Hodge KC, sitting in the Business and Property Courts in Manchester, dismissed the lead claim in a wider group action brought by 94 purchasers against ten firms of solicitors following the collapse of an off-plan residential development in Liverpool.

The claimant, a family investment vehicle controlled by Mrs Ruth Nickoll, had agreed to purchase eight units in the scheme, paying over £299,800 in non-standard 50 per cent deposits held by the developer's solicitors as stakeholder. The development failed after its funder entered administration in December 2018, and the purchasers recovered nothing.

The claimant alleged that Vincents had breached its duty in three respects: by failing to advise against proceeding with the purchase at all, by failing to ensure the risks were fully understood, and by failing to advise that the deposit arrangements offered no meaningful security. The judgement rejected the first two grounds outright, finding that Mrs Nickoll was a highly sophisticated client who had read the firm's Report on Title and an accompanying Solicitors Regulation Authority warning notice in full, and had clearly understood the substantial risk that the development could fail and her deposits could be lost.

The judge did find a narrow breach on the third ground. While the Report on Title had adequately flagged the general risk of losing deposits if the developer became insolvent, it failed to explain that the contractual mechanism governing release of the funds imposed no real obligation on the developer's solicitors to verify the accuracy of certificates before releasing money, leaving the deposits with, in practice, no meaningful protection against misuse. Had Mrs Nickoll understood this, the judge found she would probably have withdrawn from the purchases, establishing factual causation.

However, applying the scope of duty and duty nexus analysis set out by the Supreme Court in Manchester Building Society v Grant Thornton UK LLP [2021] UKSC 20 and Meadows v Khan [2021] UKSC 21, the judge held that this was not enough to found liability. There was no evidence that the deposits had in fact been misused or released other than for permitted purposes under the contract. The losses instead flowed from the developer's insolvency and the collapse of the wider development, a risk Vincents had adequately and separately warned about. Since the loss did not represent the fruition of the specific risk the breached duty was designed to guard against, it fell outside the scope of that duty, and the claim failed on the duty nexus question notwithstanding the finding on causation.

The judge expressed regret at the outcome, describing Mrs Nickoll as an impressive and entirely honest witness whose company had suffered a genuine loss through no fault of its own. He indicated that, had liability been established, damages would have been assessed at £283,800 after giving credit for cashback payments received from the marketing agent, and that no reduction for contributory negligence would have applied. A consequentials hearing has been listed for 23 September 2026.