Solicitor fined for rules breach

A retired solicitor has been fined £2,000 over breaches of Solicitors Regulation Authority (SRA) rules.

A regulatory settlement agreement published on 21 January reported that Charles Williams had admitted two breaches of the SRA’s Code and Principles and one of the Solicitors Accounts Rules in relation to conveyancing transactions completed between October 2008 and December 2011. In 103 of these, clients had been party to a stamp duty land tax (SDLT) scheme to avoid paying a total of £1.9 million in the tax to HM Revenue & Customs (HMRC).

In 95 transactions in which his firm, Newport-based FWD Law Limited acted for both purchaser and lender, lenders were not told that purchasers had used the SDLT scheme. The SRA said: “The result was that the lender clients were not given material information sufficient to be able to reach an informed decision as to whether to proceed with the mortgage offer or renegotiate.”

It said that Mr Williams had failed to act in the best interests of his lender clients and that the transactions “gave rise to a conflict or significant risk of conflict between the interests of the purchaser and lender clients”.

The cases came to light when the SRA’s forensic investigation department checked FWD Law’s accounts in March 2012. The firm ceased trading in December 2013.

In mitigation, Mr Williams said he had reached the professional judgement that the SDLT scheme did not adversely affect lenders’ interests, as their security was fully protected, and it appeared that neither the mortgage terms nor the Council of Mortgage Lenders’ requirements made disclosure necessary.

He said he had been “comforted” in this view because during a visit by an SRA practice standards unit in 2010 on other matters, scheme cases were provided for review and they raised no concerns. He added that he had carried out the transactions in good faith and intended at all times to act in his clients’ best interests.

Mr Williams was fined £2,000 for the breaches of SRA rules and agreed to make a £5,000 contribution to the authority’s costs.

Moore Thompson can provide expert support to legal firms to ensure compliance with SRA Accounts Rules. As tax specialists, we can also advise on HMRC-compliant tax planning to support legal professionals, their practices or their clients. For more information, please contact us.