SDT: Solicitor was misled
A solicitor failed to spot a conflict of interest when a vulnerable client’s attorneys bought five properties using her money but gave themselves a 50% ownership stake in each.
The Solicitors Disciplinary Tribunal (SDT) said a £20,000 fine “adequately reflected the seriousness of the misconduct” by Andrew John Chatterton, whose client lost more than £385,000 as a result.
It was accepted that one of the attorneys misled the solicitor and the Office of the Public Guardian (OPG) eventually removed them both.
Approving an agreed statement of facts and outcome proposed by the Solicitors Regulation Authority (SRA), the SDT heard that Mr Chatterton, 69, was at the time one of seven partners at Foys Solicitors, working from its Doncaster office. He qualified in 1981 and retired two years ago.
In May 2015, Client A signed a general power of attorney appointing Client B as her attorney. Soon after, she signed a lasting power of attorney for property and financial affairs, appointing Client B and Client C as attorneys.
Client B told Mr Chatterton that Client A was in a care home in London and he should use proceeds from the sale of Client A’s property in London to buy rental properties in Doncaster, with the income then being used to pay for Client A’s care home fees.
The solicitor did not check with Client A that these were her wishes, or even that she was in a care home, as he acted over the following 10 months for Client B in using £615,000 of Client A’s funds to buy four properties and then registering Clients A and B as equal tenants in common.
He also acted for Client C in using £155,000 of Client A’s money to buy a fifth property, again registering them as tenants in common. The property’s vendor was Client B, who instructed a different fee-earner at Foys to act on the transaction.
Giving away half of the value of the properties resulted in a loss to Client A of £385,000. One of the properties was later sold, with half of the proceeds going to Client B, while Client A also lost out on half of the rental income.
At some point, the OPG received an anonymous note claiming that Clients B and C were living beyond their apparent means. After an investigation, it issued proceedings which led the Court of Protection in 2019 to replace Clients B and C as attorneys.
Client A died in October 2020. Clients B and C were the beneficiaries under her will.
The SRA investigated after receiving a complaint from the appointed deputy and a referral from the Legal Ombudsman.
The agreement said Mr Chatterton “did not understand” that the transactions comprised gifts from Client A to Clients B and C, and “accordingly did not spot any signs alerting him to the misuse of their powers”.
He now accepted that there were “signs that might have alerted him to the potential conflict”. The fact that Clients B and C received ownership shares in the properties meant they were clients of Foys too.
The SRA said: “This underlines the importance of checking Client A’s wishes from the outset… [The] significant risk of a client conflict was heightened and evident throughout each transaction by the absence of any contact with Client A.
“Separate advice should have been provided to each of the parties in each of transactions.”
Although Clients B and C were properly authorised to provide instructions for Client A, “the nature of the transaction should have given rise to a suspicion that the transactions may not be in her best interests”.
The SRA acknowledged that there was “wrongdoing” by the attorneys. However, “the transactions demonstrate a pattern of inadequate practice” given the solicitor’s experience.
In mitigation, Mr Chatterton said he understood that the shares of the properties in the attorneys’ names were being held in their capacities as agents for Client A, rather than in their personal capacities, while he “genuinely believed that the attorneys were trying to do their best for Client A”.
The solicitor argued that he was deceived by Client B. “He now accepts that he was insufficient suspicious or vigilant to the risk of abuse of position by the attorneys.”
There was also no evidence that Client A’s care home fees were not paid or that Client A suffered any actual detriment from the misappropriation of legal title to the properties, he added. The attorneys were ultimately the beneficiaries of Client A’s estate under her will.
In deciding that a large fine was sufficient, the SRA said “the misconduct was not calculated or deliberate and there was no financial gain for the respondent other than the ordinary fees that he would have earned on each of these five transactions…
“To an extent, the respondent was the victim of the wrongdoing of the attorneys. On the other hand, the lack of probity on his part resulted in intervention by the Office of Public Guardian, instruction of a deputy and contested Court of Protection proceedings all coming at significant cost and time.”
Mr Chatterton was also ordered to pay costs of £4,500.
Leave a Comment