The first defendant practised as a solicitor under his own name until 2013. In that year he began to practise through the third defendant company, which was authorised as a ‘licensed body’ for the purposes of the Legal Services Act 2007. The directors of the third defendant were the first and second defendants.
On 8 December 2014 the Solicitors Regulation Authority decided to intervene in the practice of the first and third defendants and sent notices to the defendants advising them of this.
The decision of the adjudication panel recorded that it decided to intervene in the first defendant’s practice on the grounds that there was reason to suspect dishonesty on his part, that he had failed to comply with the rules made by the Solicitors Regulation Authority, and that the intervention was necessary to protect the interests of clients or former clients of the first defendant, or of the beneficiaries of any trust of which he is or was a trustee. Similar reasons were given for intervening in the third defendant.
The intervention was based largely, but not entirely, on matters relating to the estate of Mrs Kathleen Lilley, under whose will the first defendant was appointed as co-executor. The estate was a modest one and the testamentary dispositions were straightforward. However, by the time of the intervention more than six years had passed since Mrs Lilley’s death, only limited distributions had been made, and the first defendant had taken over £50,000 from the estate.
The first and third defendants applied for the interventions to be withdrawn, arguing that the evidence could, at most, warrant disciplinary proceedings, but that there was no clear and cogent evidence of dishonesty, and no evidence to justify intervention.
Held (refusing to withdraw the intervention notices):
- 1) The meaning of ‘dishonesty’ in this context includes an objective and a subjective element. Overcharging in probate matters can, potentially, justify intervention on the basis of suspected dishonesty. The court must carry out a balancing exercise, weighing the risks of re-instating the solicitor in his practice against the potentially catastrophic consequences to the solicitor (and the inconvenience, and perhaps real harm, to his or her existing clients) if the intervention continues.
- 2) What had happened in relation to Mrs Lilley’s estate was extraordinary and disturbing, and it was hard to avoid the conclusion that, with the first defendant as executor, things had gone very seriously wrong. Other matters were also of considerable concern, given the evidence of over-charging, inappropriate steps to deter challenges to fees, inappropriate assertion of liens, lack of co-operation with the Solicitors Regulation Authority and the Legal Ombudsman, and inappropriate behaviour.
- 3) It would not be appropriate to make any finding of dishonesty or honesty, but the matters raised gave good reason to suspect dishonesty, in that there was good reason to suspect that the first defendant’s conduct was dishonest by the ordinary standards of reasonable and honest people, and that he himself realised that by those standards his conduct was dishonest. The evidence also indicated breaches of the SRA Code of Conduct 2011 and the SRA Accounts Rules 2011.
4) The first and third defendants cannot safely be trusted with the administration of estates or other work, and there is reason to think that the first defendant has lost his ethical compass. The risks attached to withdrawing the intervention therefore outweigh those of continuing it.