SRA Strike Lawyers Off For Violations

Late into September 2022, the Solicitors Disciplinary Tribunal found against two experienced lawyers relating to allegations of neglecting to provide clients with professional advice. The lawyers had conducted themselves in an inept manner in relation to allegations whereby the pair had received instructions from clients in their capacity as buyers of small storage facilities and areas of land designated for parking vehicles, violating the Solicitors Code of Conduct and the Solicitors Regulation Authority Principles. 

What Happened In The Case?

The industry regulator felt that it had no other option but to investigate and it discovered compelling evidence suggesting that the lawyers had received instructions from a significant number of clients who harboured the intention of making investments in ventures connected to a corporate body known as “Group First” were seemingly referred to the provider of legal services by the parties in the relevant Group and costs appear to have been paid by Group First. The way the venture appears to have worked was human persons would plough money into the venture either through a pension or SIPP arrangement or on a personal basis. The money low then is put into land designated for parking a vehicle or small facilities designed for storage. For context the provider of legal services and one of the legal representatives appears to have been instructed to conduct transfers of the property which involved the land designated for the parking of vehicles and the small storage facilities. When industry regulator the Solicitors Regulation Authority carried out its investigation it discovered evidence appearing to show that more than one hundred million pounds had flowed through the legal service provider’s account which was exclusively designated for the payment and receipt of client monies in connection with the ventures. Apparently, the legal professionals had not picked up on signals that the ventures were not exactly how an independent third person would describe as being above board. These signals were: 

• promising faithfully a definite significant return for low risk

• complicated paperwork and systems which lay members of the public would not comprehend and

• promising financial incentives straight away such as a quarter discount on the purchase price. 

As a result of the lawyers’ conduct, many clients suffered enormous financial losses with many losing a proportion of their life savings and monies received from settlements   

What Did The SRA Say?

The Regulator did not mince their words and was particularly critical of events that had taken place. Despite the protestations from the lawyers that they had strongly urged their clients to obtain independent legal advice, the Regulator poured cold water over this deciding that the accusations were proven by the evidence, amounted to misconduct, the lawyers had negated to provide competent advice, and were more than negligence as it equated to wrongdoing from a professional perspective. The Regulator found that the conduct was done to conserve monies produced from the venture. The SRA made clear that if the clients had entered the ventures with their eyes open they would not have signed up for such transactions. The Solicitors Regulation Authority was further damning over the lawyers’ decision to take no notice of the words of caution it had issued regarding ventures of this kind.  

 Pages Turned…Lessons Learned?

This case should act as a warning to lawyers to:

• carefully keep abreast of warning notices issued by the Regulator 

• provide competent, honest, and full advice to clients 

• act with integrity 

• not prefer their interests over the needs of their clients and

• avoid taking instructions from clients on dodgy ventures involving high-income yield rates 

ASSESSING FIRMS

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SOURCES USED WHEN WRITING THIS ARTICLE

[SOURCE 1] Solicitors Regulation Authority and Hetherington – case number 12175-2021 – Solicitors Disciplinary Tribunal - 12175.2021.Hetherington.Hetherington - Appeal Annotation.pdf (solicitorstribunal.org.uk)

[SOURCE 2] Hyde, John – Sibling solicitors banned after pocketing £2.9m from scheme advice – Law Society Gazette – 5th October 2022 - Sibling solicitors banned after pocketing £2.9m from scheme advice | News | Law Gazette

[SOURCE 3] Solicitors Accounts Rules 2011

[SOURCE 4] Solicitors Regulation Authority Principles