In March 2012 Mr Justice McGovern held that the Defendant firm of solicitors had not merely breached its duty in not obtaining security with respect to a number of loans but had gone so far as to actively deceive the Bank on this issue.
Moreover, McGovern J accepted the Bank’s contention that if it had been aware that the security it required had not been put in place, it would not have entered into the transactions or lent the sums involved and that damages should be assessed on the basis of a “no transaction” case. He therefore awarded the Bank over €17 million.
In doing so, his rationale at first blush appears to contradict what Lord Hoffmann said in SAAMCo, about there being no distinction between “successful transaction” and “no transaction” cases (see South Australia Asset Management Corp v York Montague Ltd at  A.C. 191 at 218C-G). McGovern J sought to distinguish SAAMCo on the basis that the breaches of duty in this case constituted active deception rather than mere omissions. It is questionable whether this is a sound basis for distinction, particularly as it was a point taken of the Court’s own motion.
It will be interesting to see whether the Supreme Court upholds the decision in KBC and, if so, what influence this will have on the assessment of damages in lender claims in England and Wales.