A Manchester law firm, Ratio Law Solicitors LLP, has been ordered to pay £100,000 plus interest after a drafting error rendered a legal charge void. The case highlights the critical importance of precision in legal documentation and the potential financial consequences for solicitors when errors occur.
In the case of MPP (Services) Ltd v Ratio Law Solicitors LLP [2026] EWHC 2852 (Comm), a High Court judge ruled that the firm’s deletion of a secured sum from the charge constituted a breach of duty, resulting in a loss of chance for the claimant. His Honour Judge Stephen Davies, sitting in the Circuit Commercial Court in Manchester, emphasized the firm’s failure to ensure the charge’s validity, which directly impacted the claimant’s ability to secure their interests.
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Drafting Error Voids Legal Charge
The case arose from a failed joint venture to open children’s care homes. After planning issues, the claimant’s business associate agreed to grant a second charge over her house, valued at around £300,000 with £180,000 in equity. The claimant’s director completed a CH1 form, specifying “2nd Charge of £180,000 payable within 24 months,” and emailed it to Ratio Law for verification.
The fee-earner, a partner at the firm, deleted the specific charge amount without replacing it, leaving the executed charge securing an unspecified sum. As executed, the charge secured “the sums detailed in panel 9” but identified no sum at all. This oversight proved fatal when the relationship between the parties deteriorated in 2019, leading the chargor to argue the charge was void due to uncertainty, a claim the claimant ultimately accepted.
The judge also rejected the claimant’s argument that the fee-earner should have redrafted panel 9 as an agreed liquidated debt, referencing Mainland v Upjohn (1889) 41 Ch D 126 and Close Asset Finance Ltd v Taylor [2006] EWCA Civ 788.
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Judge Rejects Defendant’s Arguments
His Honour Judge Stephen Davies dismissed Ratio Law’s arguments regarding the scope of duty and contributory negligence. He found that the lost opportunity to rely on the charge fell within the firm’s duty, citing Manchester Building Society v Grant Thornton [2021] UKSC 20. The judge criticized the firm’s response to the initial complaint as “positively misleading,” noting that it omitted the deletion of the secured sum. He also emphasized that the claimant’s director had provided accurate information, which negated the contributory negligence defense.
Award Reflects Likely Settlement
In determining the award, the judge applied Allied Maples v Simmons & Simmons [1995] 1 WLR 1602, blending speculative and conclusive arguments into a single monetary figure. He concluded that the parties would likely have settled for £100,000, covering fees, a £20,000 loan, and interest. The judge disregarded speculative arguments and treated conclusive ones as extinguishing the chance, ensuring a fair and balanced assessment. The house’s equity of £180,000 and the claimant’s strong prospects on liability supported this figure, while enforcement challenges and costs pointed toward settlement. The judge did not award separate costs for the failed claim against the chargor and indicated that interest should accrue at 3% over the base rate from October 2021.
