Agreements: Backdated on client’s instructions
A solicitor who followed a client’s instructions to backdate two agreements and then did not disclose them as part of divorce proceedings has been rebuked for her “error of judgment”.
Jacqueline Major, a partner at London firm Hodge Jones & Allen and a dual-qualified barrister, said she had also been following the advice of leading counsel.
According to a regulatory settlement agreement published by the Solicitors Regulation Authority (SRA), she acted for ‘DJ’ in matrimonial proceedings that went to court after settlement negotiations with his wife, ‘SJ’, failed.
DJ was a property developer and funds for some developments were provided via a joint venture with DJ’s sister-in-law, CS, who gave him £9.1m in 2011 to invest on her behalf. These arrangements were not documented at the time but SJ knew about them.
The SRA said the solicitor was initially instructed by DJ’s father in September 2015 to assist in sorting out the financial aspects of the divorce – DJ and SJ initially both acted in person in the divorce and Ms Major then acted solely for DJ from around February 2016.
In November 2015, Ms Major instructed counsel to produce agreements documenting the loan and joint venture which, at DJ’s request, she backdated to 2011. DJ and CS signed them, without the solicitor’s involvement.
After SJ issued financial remedy proceedings, Ms Major instructed leading counsel to advise whether the fact of the backdating should be disclosed and whether the circumstances of the documents’ creation were protected by legal professional privilege.
Leading counsel said they did not have to be disclosed because the documents accurately reflected the truth of the arrangements and were covered by privilege.
As a result, Ms Major did not refer to the backdating in DJ’s Form E, while the same leading counsel did not mention it either when appearing at the first appointment hearing.
The court later ordered DJ to provide a narrative statement dealing with the creation of the documents.
In October 2016, DJ replaced her solicitors and, in February 2017, on advice from his new firm, DJ disclosed the backdating of the documents to SJ’s lawyers. Ms Major was reported to the SRA.
Ms Major accepted “with hindsight” that backdating the documents was an error of judgment. “However, it was done with no intention to deceive or mislead,” the agreement said.
Ms Major told the regulator that, at the time the documents were created, financial remedy proceedings were not anticipated and that “she did not know, nor ought to have known, that DJ intended to ever rely on the backdated documents in any financial remedy proceedings or any settlement with SJ”.
The agreement went on: “Ms Major has explained that full and frank disclosure outside the court process is optional, not compulsory in divorce cases being negotiated amicably between the parties. DJ and SJ both understood their right to have full disclosure and chose to proceed without it. DJ and SJ had both already given limited informal disclosure of their financial positions.
“Ms Major has explained that the documents were always intended to reflect the true position which DJ and CS had attempted to document previously in 2011. They were never intended to be misleading and in fact did not mislead SJ. She was aware of the existence of these arrangements.”
The solicitor said she relied on leading counsel’s advice and believed there was no obligation to disclose the backdating and also that privilege prevented her from doing so.
The SRA reported that leading counsel was investigated and prosecuted by the Bar Standards Board but acquitted of allegations of misleading the court.
Ms Major added that the documents were created solely to document “the true nature of the historical arrangements”. If it had been otherwise, “the disclosure obligations under Form E would override any privilege against self-incrimination”.
In deciding that a rebuke was appropriate for the backdating (there was no allegation regarding the non-disclosure), the SRA took into account Ms Major’s remorse, that she has suffered stress and anxiety as a result, the lack of intention to mislead, the fact SJ was not misled, and her reliance on advice from leading counsel.
The regulator added that the impact of the solicitor’s misconduct was “low” and there was “a very low risk of repetition”. But some sanction was required.
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