O’Brien Revisited — Again

Royal Bank of Scotland plc v Etridge and Associated Actions (H of L TLR 17 October)

In Barclays Bank plc v O’Brien [1994] 1 AC 180 the court stated that a bank could reasonably be expected to take steps to bring home to a wife the risk she was running in respect of charging her interest in her home in favour of a bank as security for the indebtedness of her husband or his business, and to advise her to take independent advice Although this guidance would apply to past transactions, the court gave ‘specific, clear and simple procedures’ which should be operated in future, as minimum requirements, to protect the wife, and to reduce to an acceptable level, the risk that she had been misled or coerced by her husband, so that the lender might make the advance in reasonable confidence that, if necessary, the security would be enforceable.