What Is Independent Legal Advice? - Jonathan Lea Network

What Is Independent Legal Advice?

What Is Independent Legal Advice?

When a financial transaction places a potential obligation on a third party, the borrower will often request that a certificate of Independent Legal Advice (“ILA”) is obtained before the transaction can be finalised.

This is common practice in a number of transactions before the lender releases the funds to the borrower. Examples include:

  • Loan security involving property or land offered as security to a lender by someone who is not the borrower.
  • Personal Guarantees where an individual (such as a family member) guarantees repayment of a loan on behalf of another individual or a company (even if their own company).
  • Director’s Personal Guarantees in corporate loans and mortgages.
  • Occupier’s Consent Forms for those occupying a property not directly involved in lending or security documents.

What is the independent legal advice process?

To obtain an ILA certificate you must meet with a solicitor, independent of your own or the borrower’s transaction and without the borrower present.

At the meeting the solicitor will:

  • Clarify their role and explain that their involvement which safeguards the lender against potential future liability claims.
  • Explain the nature of the related transaction, detail accompanying documents they are aware of and highlight the practical implications of signing any documents.
  • Outline potential risks, including personal liability and potential personal asset vulnerability.
  • Confirm your freedom of choice to enter the transaction and ascertain that you are entering into the transaction without undue influence.

Once the solicitor has guided you through these aspects, they may need to witness you signing any security or transaction related documents. They will then provide the relevant lender with a signed ILA certificate outlining all of the obligations and considerations discussed.

Why is independent legal advice important?

Whilst the process ensures that all parties know what they are committing to, it ultimately supports lenders by giving them legal certainty from the party (other than the borrower) affected by the loan.

This requirement, which is now commonplace, follows a number of court decisions where individuals have attempted to escape liability by arguing that they did not fully understand the implications they had agreed to, or that someone else had arranged, that they became personally liable for.

It is imperative that you engage an experienced solicitor who can make sure you fully comprehend what you might be signing up for.

Does Independent Legal Advice need to be face-to-face?

There is a set of legal procedures that the independent solicitor will need to follow for the ILA to be valid. This includes the requirement that the meeting be held in person. However, some lenders may accept an ILA certificate following a meeting conducted via video conference call. Either way, our experienced team will arrange the most suitable meeting, to suit your needs and your lenders requirements.

How can we help?

Our team of corporate and commercial solicitors are experienced with the ILA requirements and procedure. They will ensure you understand what you are agreeing to and how they can help this process fit in with the larger transaction. We will always try and assist you as efficiently as possible to meet transaction deadlines.

If you would like to find out more about how our Independent Legal advice solicitors can help, please email wewillhelp@jonathanlea.net providing us with any relevant information relevant to your matter.

This article is intended for general information only, applies to the law at the time of publication, is not specific to the facts of your case and is not intended to be a replacement for legal advice. It is recommended that specific professional advice is sought before relying on any of the information given. © Jonathan Lea Limited 2023. 

About Gemma Summerton

After completing an undergraduate degree in Business Management Gemma worked in cross functional roles for a leading FMCG company. This followed by international client management positions overseeing a number of complex projects. Gemma is currently studying a Law Conversion Masters at the University of Brighton.

The Jonathan Lea Network is an SRA regulated firm that employs solicitors, trainees and paralegals who work from a modern office in Haywards Heath. This close-knit retain team is enhanced by a trusted network of specialist self-employed solicitors who, where relevant, combine seamlessly with the central team.

If you’d like a competitive quote for any legal work please first send an email to wewillhelp@jonathanlea.net with an introduction and an overview of the issues you’d like to discuss, following which someone will liaise to fix a mutually convenient time for a no cost no obligation initial call with one of our fee earners.

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