Independent Legal Advice

Have you been told to seek independent legal advice?  Do you want more information about the process?  Are you aware of the importance of ILA in business transactions?  We can help.

When completing some types of business or personal transaction you may be required to seek independent legal advice (also known as “ILA”) by the other party before signing any documents.

Why is Independent Legal Advice required?

Independent Legal Advice is usually necessary when signing contracts that require you to accept accountability or forego some of your rights without receiving any personal benefit. Because of this it is imperative that you understand exactly what agreement you are entering into before signing. There are two main benefits to this, one for each party to the transaction:

  • Firstly, you have an explanation of, and advice on, the specific risks you are taking by agreeing to the transaction. You may be putting your property or financial security at risk and the advice will explain the consequences of this.
  • Secondly, the other party to the contract has some protection because you understand what you are signing up to, and cannot claim ignorance at a later date to try to escape your responsibilities under the contract. This helps remove any ambiguity if there is a subsequent legal dispute in relation to the contract.

Where there is more than one of you signing (for example, husband and wife jointly guaranteeing a loan), you will each be required to receive your own separate advice to avoid one of you influencing the other to sign.

What types of transaction require Independent Legal Advice?

Here are some common examples of transactions where you may be required to seek independent legal advice.

  • Personal Guarantees – where you are purchasing a property through a company, obtaining a commercial loan, extending your commercial overdraft facility or guaranteeing a family member’s loan or mortgage.  In all of these cases you are personally guaranteeing repayments that will be made by someone else.

  • Occupier’s Consent Forms – where you occupy a property but are not a party to the mortgage documents.

  • ID1 Form – where your identity needs to be verified during a property transaction.

  • Providing Security – where you own a property or land, and a tenant (perhaps your company) is offering this as security to a lender.

  • Face to Face advice – where the solicitors acting on your behalf for a property purchase involving a mortgage (or a re-mortgage) are too far away to meet with you directly, you will need to find a local advisor to see you in person.

What is the process for obtaining Independent Legal Advice?

In most instances, you will be informed by the solicitor for the other party or by your lender if it is necessary for you to obtain independent legal advice. It is common for this to happen at a late stage in the transaction as it can only happen when the contracts have been finalised ready for signing. As a result, you may be under tight time pressure and the process of obtaining independent legal advice will need to happen quite quickly.

For this reason you should find a solicitor who is responsive and prepared to see you at short notice and this is what will typically happen.

  • You find a solicitor who is independent from all those involved in the transaction.

  • You share all relevant paperwork with them at least 24 hours prior to any appointment so they can read and understand it.

  • You attend a face-to-face meeting with the solicitor to review the transaction documents. If there is more than one of you, each person will see the solicitor alone. The solicitor will explain each clause in the contract and check that you have understood it.

  • If you are happy to sign in the full knowledge of what you are signing, your signature will be witnessed and the solicitor will provide an Adviser’s Certificate in which they declare that they have explained the documents to you.

  • If requested, the advisor will send the completed paperwork back to the original party.

  • Post-meeting, you will receive a summary letter from the solicitor to keep for your records and refer back to if necessary.

How much does Independent Legal Advice Cost?

When you obtain Independent Legal Advice, some of the risk of the transaction is passed from you to your solicitor. For this reason not all law firms will give ILA and where they do it is priced to reflect the risk that they take on.

At Backhouse Solicitors, our experienced advisors provide clients with an accurate, efficient and stress-free ILA service for a fixed fee per person, per document. We are quick to respond to enquiries and can normally arrange an ILA appointment within a day or two.

To discover more about independent legal advice, visit our ILA FAQs page, or contact us today to arrange an appointment with one of our friendly team.

Tel:      01245 893400 | 01702 410880
Email: info@backhouse-solicitors.co.uk
Visit our Chelmsford office: 17 Duke Street, Chelmsford, Essex, CM1 1JU
Visit our Leigh-on-Sea office: 22-24 Elm Road, Leigh-on-Sea, Essex, SS9 1SN
Or send us a message through the Contact Us page on this website