Most obviously, LS should not attempt to act for both L and G. Neither should L or LS ask B to obtain G’s signature to the guarantee for, if either does so, L will be regarded as having appointed B as his agent and will be at risk—and the guarantee voidable—if B in fact exerts undue influence over G. L will also be at risk if B as L’s agent acts improperly—for instance by misrepresenting the effect of letters written directly to G by LS, and where B obtains G’s signature without ensuring that G has a proper understanding of the obligation he is entering upon.2 The correct course is for LS to indicate to G directly that he should take independent advice and for LS not to involve B. LS has not to ensure that G takes independent advice—in all ordinary cases anyway—but, if the warning is given, the risk passes to G. So much is clear from Coldunell Ltd. v. Gallon,3 a decision which also indicates that, if LS adopts a usual method of communicating directly with G, L is not at risk if B intercepts the communication. L’s protection will be even more assured if G’s solicitor (GS), if known, is communicated with.

What happens if L or LS communicates with G through B’s solicitor (BS)? In principle this is no different from communicating through B, and L remains at risk. But if BS is also acting for G, the position changes. L is entitled to assume that BS/GS will behave in a proper fashion towards both clients. L is not to be more at risk because G is content to share an adviser with B.

But what is the position if L or LS believes that G is using BS as his adviser, when G is not doing so? This situation arose in Bank of Baroda v. Shah.4 The bank, through its own solicitors (LS), sent a legal charge for execution by two guarantors to solicitors (BS) who were acting for a borrowing company, one of the directors of which was in a position to, and did, exert undue influence over the guarantors. But LS believed that BS were acting for the guarantors also, though this was not so. The Court of Appeal held that this belief made all the difference. The bank’s solicitors had done all that was required of them under acceptable commercial practice, so the bank could enforce the charge. The case is of particular interest in that the judgment was given by Dillon, L.J., who had the task of reconciling his own