Ireland: Guarantors: Independent Legal Advice?

The Court of Appeal's position is now very clear on the question of guarantors needing independent advice - unless an individual guarantor has an arguable defence that he/she has been the subject of undue influence or misrepresentation by the debtor, the Courts will not find that the lender was under a positive duty to ensure that the guarantor received independent legal advice.


The judgment of the Court of Appeal was delivered on 4 April 2017.

  • Facts: A father guaranteed the debts of his son to ACC. The son borrowed from ACC in 2005 and 2007, and his father provided guarantees in 2005 and 2008. The son defaulted in repayment of his loans, and ACC began legal proceedings in 2013. In February 2015, ACC successfully obtained summary judgment in the High Court against the son, and against the father in respect of the 2005 guarantee.2

    • High Court: The guarantor had signed a confirmation that he had been given the opportunity to take independent legal advice in relation to the 2005 guarantee, and that he had taken that advice. His son gave evidence that the advice was in fact given by the son's solicitor, and not by a separate solicitor acting for the father, and could not be said to be "independent". At no stage in the High Court did the father claim that he had provided the guarantee as a result of undue influence exerted by, or misrepresentations made by, his son.

    • The High Court granted judgment in favour of ACC. Notably, on the question of independent legal advice, Fullam J held that while undue influence had not been alleged, the father-son relationship put ACC on inquiry (i.e. on notice of a possible non-commercial aspect to the guarantee) and under an obligation to take reasonable steps to ensure that the father had freely entered into the guarantee. Fullam J found that, in obtaining the confirmation from the father that he had received independent legal advice, ACC had taken "a sufficiently reasonable step".
    • » Court of Appeal: The father appealed. The Court of Appeal (in a judgment delivered by Finlay Geoghegan J) found in favour of ACC, holding that:

      • no evidence had been presented by the guarantor to the High Court to support an argument that he had been subjected to undue influence; and
      • as the guarantor did not have an arguable defence that he was the subject of undue influence, he did not have an arguable defence that the bank (because it knew of the father-son relationship) should have ensured that he obtained independent legal advice or otherwise ensured that he freely entered into the guarantee.


    The judgment considered key Irish decisions, and one English decision, in this area. Notably, Hogan J in the Court of Appeal delivered a separate judgment in which, while he ultimately supported the judgment of Finlay Geoghegan J, he disagreed with her on the relevance of the decisions in Roche and Etridge (each referred to in further detail on the next page).

    Case Details
    Ulster Bank Ireland Ltd v Fitzgerald3 O'Donovan J held that a wife who claimed that she had signed a guarantee of the debts of her husband's company under his undue influence in fact had a financial stake in that company. Ulster Bank was found not to have been under an obligation to take special steps to ensure that the wife obtained independent legal advice, because Ulster Bank had no actual or constructive notice of possible undue influence.
    Ulster Bank Ireland Limited v Roche & Anor4 Ms Buttimer successfully claimed that she had guaranteed the debts of one of Mr Roche's companies under his undue influence. Clarke J considered Royal Bank of Scotland v Etridge5 (in preference to considering Fitzgerald, as O'Donovan J in Fitzgerald had not considered Etridge). In Etridge, the Court considered whether, in various cases where wives argued that they had signed security documents under their husbands' undue influence, the bank was on notice of this (and therefore unable to enforce the security). Clarke J in Roche was satisfied that Etridge was authority for the proposition that a bank is put on inquiry where it is aware of facts that indicate to it, or ought to indicate to it, that there is a non-commercial aspect to a guarantee. Clarke J found that because Ms Buttimer had limited legal rights in respect of the transaction in question, and no involvement in the company whose debts she guaranteed, this was enough to place the Ulster Bank on inquiry and oblige it to take some steps to ensure that she had freely agreed to the give the guarantee. Ulster Bank had not taken any such steps (i.e. it had not asked that Ms Buttimer obtain independent advice), so its claim against Ms Buttimer under the guarantee failed.
    ACC Bank Plc v McEllin & ors6 Birmingham J made an obiter comment that, if the case had involved an elderly parent guaranteeing the debts of a child's business, the decisions in Etridge and Roche would have been relevant in considering whether independent legal advice was needed.
    The Governor and Company of the Bank of Ireland v Curran7 The Court of Appeal agreed that no credible evidence had been produced that the guarantor (the borrower's mother) had been the subject of undue influence and that, as a result, there was no evidence to suggest that the bank needed to check whether she fully understood the nature of the guarantee she had provided (the guarantee had highlighted that independent advice should be obtained, and Mrs Curran had signed a statement that she understood the nature of the liability she was undertaking, and did not wish to take independent advice).
    Ulster Bank Ireland Ltd v de Kretser8 Birmingham J found that there was no evidence to support the wife's claim that she had executed a guarantee under the undue influence of her husband: she was an experienced businesswoman who had dealt with Ulster Bank regularly. Notably, in de Kretser, Hogan J (in the minority) disagreed with Birmingham J, and was of the view that the guarantor had made an arguable case that the bank had a positive duty to ensure that she received independent legal advice before she signed the guarantee.


    • Both Etridge and Roche dealt with situations where a finding of undue influence had been made, and the principles set out in both cases regarding further steps that a bank must take were set out only in the context of a prior finding of undue influence.
    • Neither Etridge nor Roche is authority for the proposition that, where there is no arguable defence of undue influence, there is a separate defence available to the guarantor if the bank did not ensure that the guarantor fully and freely understood what he was agreeing to.
    • There is no stand-alone obligation on a bank to ensure that a guarantor fully and freely understands what he is agreeing to.
    • If the guarantor in this case had raised an arguable defence of undue influence, the judgment in Roche may have been relevant.
    • As mentioned above, Hogan J also delivered a judgment in this case in which he disagreed with Finlay Geoghegan J as to the applicability of Etridge and Roche. However, having regard to the decisions of the Court of Appeal in de Kretser and Curran, he felt that it was clear that the Court of Appeal's "settled view is that...absent an express claim of undue

      influence or...misrepresentation, a bank is under no affirmative duty to ensure that a surety receives independent legal advice." He also noted that, unless special circumstances exist, a judge of the Court of Appeal should yield to the prevailing view set out in prior decisions. As a result, he agreed with the judgment of Finlay Geoghegan J.


    It is important to note that Finlay Geoghegan J distinguished the facts of this case from those in Management Ltd v Sheehan9 in which ACC had listed a confirmation that the guarantor had received independent legal advice as a condition precedent to the loan being advanced. In that case, both the High Court and Court of Appeal agreed that, as the borrower's solicitor had confirmed to ACC that the guarantor had waived his right to seek independent legal advice, the guarantor had an arguable defence that the condition that ACC had imposed (which was arguably for the benefit for both parties) had been (and should not have been) unilaterally waived by ACC.


    1. [2017] IECA 119.

    2. ACC's claim in respect of the second (2008) guarantee was remitted to plenary hearing, and was not the subject of the Court of Appeal's April 2017 decision.

    3. [2001] IEHC 159.

    4. [2012] IEHC 166.

    5. [2001] UKHL 44.

    6. [2013] IEHC 454.

    7. [2016] IECA 399.

    8. [2016] IECA 371.

    9. [2016] IECA 343.

    This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.