Real property, real impact: Under the influence

Article by Joanne Wicks KC and Naomi Kilcoyne, published 20^th July 2026

This article was originally published by Estates Gazette here.

The law is often required to decide which of two innocent parties should bear the brunt of another’s wrongdoing. This issue arises acutely when one family member exercises coercion, exploits blind trust or simply lies to get another to provide security for their borrowing. When the wrongdoer defaults, who should the law protect? Natural sympathy is with the victim. But if the law puts too many obstacles in the way of lenders’ ability to enforce their security, those who ultimately suffer are the millions of people who need to borrow to buy a home.

The law’s current solution is to require all lenders to ensure that those at risk of undue influence or misrepresentation receive legal advice about the loan transaction. The steps which the lender must take to ensure that its mortgage is valid are known as the “Etridge protocol”, following the seminal House of Lords decision in Royal Bank of Scotland Plc v Etridge (No 2) [2001] UKHL 44; [2001] PLSCS 216. But it falls to be considered where the Etridge protocol now stands following Waller-Edwards v One Savings Bank Plc [2025] UKSC 22; [2025] EGLR 28.

The Etridge protocol

Lord Bingham captured the rationale of Etridge in his opening speech: “The law must afford both parties a measure of protection. It cannot prescribe a code which will be proof against error, misunderstanding or mishap. But it can indicate minimum requirements which, if met, will reduce the risk of error, misunderstanding or mishap to an acceptable level. The paramount need in this important field is that these minimum requirements should be clear, simple and practically operable.” This passage is striking.

First, appellate decisions are typically concerned with confirming what the law has always been, or declaring and explaining any change. Here, however, the court’s approach is also expressly policy-driven, concerned with the practical workability of its conclusions.

Second, and perhaps more surprisingly, the judgment acknowledges that the Etridge protocol cannot altogether eliminate the risk of abuse. This raises the question: what level of risk is acceptable, and are the “minimum requirements” sufficient to achieve that?

The prior case law

Before Etridge came two decisions of the House of Lords, decided on the same day: Barclays Bank Plc v O’Brien [1994] 1 AC 180 and CIBC Mortgages Plc v Pitt [1994] 1 AC 200. In O’Brien, a husband and wife executed a mortgage over their jointly owned home as security for lending to the husband’s company. The husband misrepresented the loan terms to the wife. The mortgage was held not to be valid over the wife’s share. Their Lordships decided that because Barclays knew that (a) the husband and wife were in a personal relationship and (b) the transaction was not to the wife’s advantage, it was “put on inquiry” about the risk that the wife’s consent had been wrongfully procured. To avoid losing its security, the bank had to take steps to ensure that the wife understood the risks she was running. It was thought that that would be best achieved by a private meeting between the wife and a representative of the lender, without the husband.

In Pitt, a husband exerted pressure on his wife to mortgage their home to purchase shares. The bank was (falsely) told that the advance was for the purpose of buying a jointly-owned second home. This time, the bank’s mortgage was valid. As far as the lender was aware, the transaction was for the benefit of both partners. There was nothing to alert it to the risk that the wife was acting under undue influence.

In O’Brien and Pitt, therefore, an important distinction was drawn between two kinds of transactions, seen from the perspective of the lender. In one, it appeared to the bank that the wife was a surety for her husband, deriving no personal benefit from the lending – even though, in reality, the wife’s standard of living may have derived from the husband’s company. In the other, it appeared to the bank that the wife was to benefit as much as the husband. In the first case, the victim of abuse was entitled to the law’s protection; in the second case, she was not.

The approach in Etridge

The O’Brien decision was subject to much criticism. Property lawyers complained that it distorted the law under which a person acquires land subject to an earlier equitable property interest. Lenders complained that it was unrealistic to expect their representatives to conduct the necessary in-person meeting. Etridge, which concerned five conjoined appeals, importantly and authoritatively expanded on the principles of O’Brien. In doing so, it deserves to be recognised as a leading case of the 21st century.

Lord Nicholls confirmed that a lender will be “put on inquiry” whenever one member of a cohabiting couple (or other non-commercial relationship) offers to stand surety for the debts of the other. Once put on inquiry, a lender may protect itself by taking reasonable steps to satisfy itself that the vulnerable party appreciates the risk of the transaction. One way to do so is to obtain written confirmation from a solicitor that the person entering into the transaction has been appropriately advised. Lord Nicholls set out the “core minimum” of such advice and the steps a lender should take, embodied in the Etridge protocol.

Etridge therefore involves a low threshold for lenders being put on inquiry, but requires only limited action from those who are. The bank is not expected to play detective, with a view to finding out whether a prospective mortgagor is in fact subject to abuse. In short, the protection conferred by the Etridge protocol is broad, but not necessarily deep.

The Supreme Court has its say
In its most significant treatment in almost 25 years, the Etridge principles were recently extended in Waller-Edwards to include “hybrid” joint-borrowing cases where the loan appears to be partly, or even substantially, for the benefit of the person challenging the transaction.

In Waller-Edwards, the Supreme Court rejected any nuanced or fact-sensitive test in favour of a bright-line approach: lenders will be put on inquiry in any non-commercial transaction where, on its face, a “more than de minimis” element of borrowing is used to discharge the debts of one of the borrowers and so might not be to the financial advantage of the other. As such, the Etridge protocol will conceivably be applicable in a far wider range of transactions. The wife in Pitt had no protection because the (fictional) second home was to be jointly owned; following Waller-Edwards, it would have been enough if the lending had also discharged some of her husband’s credit card debts.

Subsequent decisions
The first English case applying Waller-Edwards appears to be Jewkes v Watson [2025] EWHC 3319 (Ch), where a deed of assignment of a father’s debts to his children was set aside for undue influence. The court held that these “hybrid” transactions shared all the key features of a suretyship agreement, and so the lender should have been alive to the risk of undue influence.

Notably, in Excel-A-Rate Business Services Ltd v Blaney [2025] NICA 72, the Court of Appeal (Northern Ireland) clarified an apparent tension between Etridge and Waller- Edwards. As the court confirmed, Waller-Edwards does not say that the only way to discharge the lender’s onus of inquiry is to follow the Etridge protocol; merely that this is one way to do so. A lender may discharge its duty in several different ways: whether it has done so is a fact specific question in each case. It will be interesting to see if lenders take the opportunity to depart from standard practice. In a post-Waller-Edwards world, one may expect lenders to play it safe and “stick to protocol”.

Where are we now?
In an age where domestic financial abuse affects as many as one in six women in the UK (according to a Financial Conduct Authority report cited in Waller- Edwards), the need to reduce the risk of such abuse remains, regrettably, a live one.

In Waller-Edwards, the Supreme Court favoured the abused party by extending the scope of the Etridge protocol. On one view, this approach is over-inclusive: it catches all transactions where some element of the borrowing appears to benefit only one partner, even though there are no other indications of undue influence or misrepresentation.

However, on another view, it risks being underinclusive: only modest steps are required to shift the protective burden from the lender back to the vulnerable party. Ultimately, the protocol helps lenders avoid being caught up in the wrongdoing of others; it does not require them to investigate further. As such, it can be seen as a disincentive on lenders to make active inquiries and investigate their customers’ needs: an approach which is at odds with modern regulatory practice and guidance.

Etridge reveals both the strengths and weaknesses of judge-made law on questions of social and economic policy. Absent comprehensive legislative intervention, the courts have stepped in to fashion protections for vulnerable people: they have seen a need and sought to meet it. But they have done so without the benefit of the research, consultation and impact assessment which accompanies legislation. How will the Etridge protocol fare over the rest of this century? Will it continue to be relevant or come to be seen as quaint and antiquated, a relic of a different age? Time will tell.