- Publication Date
- 2023-09-04
The Solicitors Regulation Authority (SRA) conducted an investigation into the conduct of a relevant lawyer, a former associate solicitor at a law firm. The relevant lawyer agreed to the following outcome of the investigation:
The relevant lawyer is fined £12,000 and agrees to the publication of the agreement. Additionally, the relevant lawyer will pay the costs of the investigation totaling £1,350.
Summary of Facts:
The relevant lawyer acted for transferors and the transferee in a conveyancing transaction, facilitating the transfer of five properties for nil consideration to a Dubai-based company. Following the transfer, one property was sold at auction, and the proceeds of the sale were paid into a third-party bank account based in Dubai.
The transferors of the properties claimed the transfers and proceeds of the sale were done without their knowledge or agreement. They reached a settlement agreement which saw the return of four properties but not the proceeds of the sold property.
The SRA investigation found that the relevant lawyer did not advise the clients of the conflict of interest that existed, nor did they satisfy themselves that it was appropriate to act in these circumstances. Furthermore, the relevant lawyer did not advise the transferors of the risks involved in transferring properties for nil value nor inquire about the reasons for the transfers. The relevant lawyer also failed to follow the law firm's policies and procedures for conveyancing regarding commercial clients, establishing control of the client, establishing beneficial ownership and non-domiciled companies, and completing all due checks, potential conflict of interests, and risk assessments.
Admissions:
The relevant lawyer made the following admission, which the SRA accepts:
By acting for both sides in the transfer of five properties for nil value and registering those properties without a record of advice on risk to the transferor or conflict of interest, the relevant lawyer failed to provide a proper standard of service to the clients.
Moreover, by not keeping up to date with and following the law firm's policies and procedures, the law, and regulations governing solicitors, and being unable to prove compliance with regulatory obligations, the relevant lawyer demonstrated failings towards the clients.
The SRA decided that a fine was the appropriate outcome due to the potential for clients to suffer significant loss in these circumstances, even though no actual loss was caused. Furthermore, the relevant lawyer cooperated with the SRA investigation and undertook appropriate training since the incident to fill gaps in regulatory knowledge.
The SRA considered the relevant lawyer’s conduct to be reckless but not grossly reckless to require a fine at the higher end of the bracket. The impact of the conduct was determined to be toward the mid-range of the scale. The relevant lawyer has not received any financial gain or other benefit from the conduct. Therefore, the amount of the fine is set at £12,000.