Who May Stand on Your Opinion: A Reliance Letter Discipline for UK Practices

Reliance letters arrive at the point in a transaction when commercial momentum is difficult to interrupt. A lender, purchaser, investor or regulator wants comfort that it can depend on advice prepared for someone else. The client wants the deal completed. The firm is asked to sign a short document that may, in practice, carry long-term consequences. For professional practices in Leeds, London and beyond, the question is not whether reliance requests will arise in 2026, but how they will be assessed, documented and controlled.

Why third-party reliance requests arise

A reliance letter is a form of risk allocation. It allows a party who did not instruct the firm to place weight on the firm's work, usually in connection with a defined transaction or decision. In corporate transactions, a buyer may seek reliance on due diligence or tax advice prepared for the seller. In refinancing, a lender may ask to rely on a property or solvency report addressed to the borrower. In regulatory reviews, a third party may seek confirmation that advice given to a regulated business can be used in its own assessment.

The request is understandable. Counterparties want independent assurance. But the firm's original retainer will typically define the client, the scope, the purpose and the limits of liability. A reliance letter is not a routine administrative step. It is an extension of professional exposure, and it should be treated as such.

The starting point: duty, scope and assumption of responsibility

Under English law, a professional firm does not ordinarily owe a duty of care to every person who might read its advice. The general position is that duties arise from the retainer, from an assumption of responsibility to a particular recipient, or from circumstances in which the law considers it fair, just and reasonable to impose a duty. The principles commonly associated with Hedley Byrne v Heller remain a useful reference point, but the practical lesson is simpler: reliance should be granted deliberately, not accidentally.

A reliance letter is one of the few controlled ways to extend the circle of persons who may depend on the firm's work. That makes drafting discipline essential. The letter should match the work actually performed, the purpose for which it was performed, and the risk the firm is prepared to accept. It should also be consistent with the firm's engagement terms, professional indemnity arrangements and internal approval processes.

A practical framework for 2026

1. Establish who is asking and in what capacity

Identify the precise legal entity requesting reliance, its role in the transaction and the decision it intends to make. Avoid descriptions such as 'the lender and its affiliates' unless the firm has specifically assessed that wider group. A named addressee with a defined capacity is easier to evaluate and easier to control.

2. Confirm that the underlying work supports reliance

Check whether the advice is current, whether it was prepared for the purpose now proposed, and whether any assumptions or qualifications remain valid. Advice prepared for a borrower's internal funding decision may not be suitable for a lender's security assessment. If the position has moved on, consider whether an update or supplementary letter is required before any reliance is granted.

3. Define the permitted purpose and the limits of use

State the transaction, the specific decision and the period during which reliance may be placed. Include clear restrictions on onward disclosure, publication and use in subsequent transactions. Where appropriate, make clear that the letter does not create a client relationship with the addressee and does not extend to future events or changed circumstances.

4. Consider known and unknown recipients

Requests often seek reliance for a class of persons, such as syndicate members, assignees or future investors. A narrow definition is preferable to an open-ended one. If the client or counterparty cannot identify the recipients, the firm should consider whether reliance can properly be given at all, or whether a more limited confirmation is sufficient.

5. Align liability positions with the retainer

Review caps, exclusions and proportionate liability provisions in the engagement terms. A reliance letter should not inadvertently override them. Where a cap is to apply, say so expressly. Where the firm is not willing to accept joint and several liability, consider how that position is to be recorded. Confidentiality and privilege should also be addressed, particularly where the advice contains commercially sensitive material.

6. Control approval, timing and execution

The final letter should be approved at partner level and issued in a single agreed form. Avoid side letters, email confirmations and oral assurances that may be read as extending reliance beyond the signed document. Late requests are common, but speed should not displace scrutiny.

Refinancing and transaction pressure points

Refinancing often produces the most direct pressure. Lenders may ask for reliance on reports that were commissioned by the borrower, sometimes months earlier and for a different purpose. The firm should distinguish between factual confirmation, such as confirmation that a report was prepared by the firm, and opinion-based reliance, which invites the lender to depend on the firm's professional judgment. The former may be possible on a limited basis; the latter requires a fuller assessment.

In transactions, buyers may seek reliance on seller-side due diligence. Firms should consider whether the buyer had its own opportunity to investigate, whether the work was scoped for the buyer's purposes, and whether the engagement terms already exclude third-party rights. A clear non-reliance provision in the retainer can reduce the scope for argument later, but it should be reviewed alongside the reliance request rather than assumed to resolve it.

Regulatory reviews and investigations

Regulators and other public bodies may seek access to advice or confirmation that it can be relied upon in an assessment. These requests require care. Providing a reliance letter is not the same as waiving legal professional privilege, which belongs to the client and should be protected unless properly instructed otherwise. The firm should take client instructions, define the purpose of any confirmation and avoid language that suggests a wider waiver than intended.

Protecting client confidence

Limits on reliance are not a sign of distrust. They are a feature of professional risk management, and most sophisticated clients understand that. The key is communication. Explain why the firm is narrowing the addressee, purpose or liability position. Offer a form of wording that meets the commercial need without overextending the firm. A well-drafted letter can help a transaction proceed; an unstructured one can create a dispute long after the deal has closed.

For practices operating between Leeds and London, consistency matters. A standard reliance letter protocol, approved by the firm's risk and compliance leads, reduces the risk of inconsistent positions across offices and teams. It also gives fee-earners a clear route to follow when a request arrives under pressure.

A controlled extension, not an automatic right

Third parties may have a legitimate interest in relying on professional advice, but that interest does not create an automatic right. In 2026, with transactions moving quickly and regulatory scrutiny remaining high, firms should treat reliance letters as deliberate risk decisions. Identify the recipient, test the work, define the purpose, align the liability position and control the signature. Done properly, that discipline protects the firm without undermining the confidence of the client or the counterparty.