Supreme Court clarifies ‘Put on Inquiry’ Threshold in Undue Influence Cases

Remortgage concept. Memo stick, calculator and money.

The Supreme Court handed down judgment in the case Waller-Edwards v OneSavings Bank Plc [2025] UKSC 22 on 4 June 2025.This judgment marks a significant development in the doctrine of undue influence, particularly as it applies to joint borrowing in non-commercial relationships.Brief facts Mrs Waller-Edwards mortgaged her property to secure funds largely for joint purposes with her then-partner Nicholas Bishop — but with ~£39,500 going solely toward Bishop’s debts. She later sought to set aside the transaction on grounds of undue influence, arguing the bank failed to take reasonable precautions (e.g., independent legal advice).DecisionThe Supreme Court introduced a “bright line” rule, which is where a loan to a couple in a non-commercial relationship includes any non-incidental benefit to one party, the lender is put on inquiry and must take reasonable steps to ensure informed consent. Lord Briggs emphasised that predictability in lending practices outweighs the uncertainties of subjective evaluation.

06.06.2025

Comment

Paul Henson, Partner in Real Estate Disputes comments:

"This judgment effectively extends the well known ‘Etridge’ principles and removes the ambiguity surrounding “hybrid” loans. As a result, lenders can no longer assume that predominant joint benefit excludes them from the “inquiry” obligation if any part of the loan serves an individual interest.

“ Those structuring and advising on such transactions must be alert to these new compliance triggers and ensure robust evidence of independent advice is obtained.”

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