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The HL's judgment in Etridge is LONG, and I expect I am missing something, but on my first reading of Lord Nicholls' speech, he says that to put the burden of disproving undue influence onto a defendant in a presumed UI case, a claimant must show (a) a relationship of trust and confidence (or some variant on that), and (b) a transaction that calls for explanation, because the nature and circumstances of the transaction are such that the claimant would not have entered into it, had she not been unduly influenced.

Looking at (b) more closely, we can see that Lord Nicholls is adopting an understanding of 'manifest disadvantage' which does not turn on whether the claimant is worse off as a result of entering into the transaction, but rather on whether the claimant would have entered the transaction without having been unduly influenced. So, for example, the fact that she makes a gift to the defendant inevitably leaves her worse off, but that in itself does not make her gift 'manifestly disadvantageous' to her - whether or not her gift is manifestly disadvantageous will turn instead on whether the circumstances of her gift, its size, and the nature of her relationship with the donee are such that she would not have made it but for the donee's undue influence.

Lord Nicholls' understanding of manifest disadvantage is consistent with dicta in Allcard v Skinner and Natwest v Morgan, although I am not too sure that judges since then have understood the concept in the same way - Nourse LJ in Barclays v Coleman, for example, seems to think that any transaction which leaves you worse off is manifestly to your disadvantage (which is easy to prove in a lot of cases, and which is why he thinks the concept essentially redundant - a view which Lord Nicholls rejects).

But authorities aside, I have a problem with Lord Nicholls' formulation. If we start by defining a manifestly disadvantageous transaction as a transaction which a claimant would not enter unless undue influence is practised upon her, and we require a claimant to show that she has entered such a transaction before we will switch the burden of proof, and ask the defendant to disprove undue influence, then what can a defendant say in the event that the court decides that a claimant has proved manifest disadvantage? By definition, the court must have accepted already that she was unduly influenced and the case is over.

I feel pretty sure that Lord Nicholls did not mean to say this. Comments anyone?

Charles Mitchell

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Dr Charles Mitchell
Lecturer in Law
School of Law
King's College London
Strand
LONDON WC2R 2LS

tel: 020 7848 2290
fax: 020 7848 2465
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