SDT: Solicitor had opportunities before hearing to offer new defence
A law firm owner has been suspended for not disclosing conflicts of interest to clients, including that his wife was a director of the property development company they were buying from.
This meant Waheed Ur Rehman Mian should not have acted for them, the Solicitors Disciplinary Tribunal (SDT) said.
Clients lost money because the development failed and they have been reimbursed by Mr Mian’s insurers.
Mr Mian, who qualified in 2003, was majority owner, compliance officer and principal solicitor of East London law firm M-R Solicitors, which between June 2017 and November 2019 acted for around 25 of 75 purchasers from two off-plan developments in Leicester that was meant to be built by Aronex Developments.
However, Aronex went into administration in November 2019, the developments were never completed and investors lost their deposit monies.
They paid an upfront reservation fee of £5,000 and then 70% of the purchase price prior to completion.
There were several conflicts Mr Mian failed to disclose to clients, most notably that his wife was a director of Aronex.
At the hearing, Mr Mian claimed he did not know this until summer 2019, and that his wife did not know M-R Solicitors was acting for purchasers.
The SDT did not believe this, saying that up to this point in the proceedings, Mr Mian had stated that his wife was a silent director and shareholder and that the failure to advise clients of the conflict was an error and oversight caused by the strains of a busy practice.
He had several opportunities to raise this defence before the hearing but had chosen not to do so.
In any case, there were “other substantial links” between the firm and Aronex which the SDT “did not consider to be merely coincidental”
These included that the firm was the landlord of the leased premises occupied by Aronex and that two members of staff were also involved in the developments.
“Accordingly, the tribunal found on the balance of probabilities that [Mr Mian] either knew of the conflict, or as an experienced solicitor ought to have been aware.
“In such circumstances, [he] must have known that such a conflict was a mandatory prohibition on the firm acting for these clients. The firm should never have taken them on.”
The SDT found that his actions had lacked integrity, a charge Mr Mian had contested.
Mr Mian admitted failing to adequately advise clients of the risks inherent in such investment schemes – in particular their deposit being at risk in the event the seller became insolvent – and to ensure clients were informed of the planning issues facing the developments (ancient artefacts had been found on the sites) prior to releasing their funds to Aronex.
Mr Mian also admitted that his failure to properly supervise a trainee solicitor handling the work – taken on after the conveyancing team had left for another firm in 2017 – led to the firm not advising clients on the risks and planning permission.
Mr Mian said the case against him arose from the failure of a development over which he had no control and for which he was not responsible.
He stressed too that his clients’ losses were compensated by his insurers “and that, out of his sense of moral correctness, he did not litigate or seek to prevent this”. The claims saw the firm’s professional indemnity insurance premium soar from £25,000 to around £165,000.
He told the tribunal that he was an immigration solicitor “with minimal working knowledge of conveyancing”.
In deciding sanction, the SDT said the solicitor “demonstrated a lack of insight regarding his misconduct and the importance to the public and the reputation of the profession of upholding his regulatory obligations”.
This called into question Mr Mian’s “continued ability… to practise appropriately” but it decided that a six-month suspension would suffice. He was also ordered to pay costs of £40,000.
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