Mortgages: Firm failed to advise on other ways to resolve mis-selling claims
A solicitor has been fined for letting her firm run mortgage mis-selling claims when she had “no experience or expertise” and made multiple errors as a result.
Samira Mohammed Seth admitted to the Solicitors Disciplinary Tribunal (SDT) that she had acted recklessly and without integrity.
Clients were not told of the various options open to them and were instead only directed towards litigation, while the firm did not inform its after-the-event (ATE) insurers about adverse counsel’s opinions, or seek their approval before issuing proceedings, as it was required to do.
Ms Seth, who qualified in 2006, was the sole manager and compliance officer at Seth Law, which she set up in 2012 in Bolton. It specialised in immigration, personal injury, family and civil law.
The firm was subject to a winding-up order in April 2024 before entering into liquidation. The Solicitors Regulation Authority (SRA) later intervened in the closed firm.
Seth Law started doing mortgage mis-selling claims in February 2020 via introduction agents and by 31 December 2021 had been instructed on 539 claims.
By March 2022, it had issued proceedings in 36 claims and served them in four.
However, clients were not told there were other ways to resolve their claims, such as complaining directly to the mortgage company or broker, complaining to the Financial Ombudsman Service and/or seeking compensation from the Financial Services Compensation Scheme. Both schemes are free for consumers to use.
Seth Law took out ATE for all clients with either Bastion Insurance or Financial & Legal, via broker Amberis.
In 21 files reviewed by the SRA, there was adverse counsel’s advice on two of them – one was not disclosed to the ATE insurer at all and the other was, but some months later and after the case had been issued.
This was against the terms of the insurance, as was not obtaining written consent from the insurer before issuing proceedings.
After contact from the SRA, the firm sought retrospective consent for 27 out of the 36 claims that had been already issued. It was not given, putting the clients at risk.
Ms Seth said this happened, in part, because she had not read the insurance “in any detail”.
She accepted that she was “responsible for the firm’s manifestly incompetent handling” of the claims and that, with hindsight, “the firm’s operation was to a degree reckless”.
In mitigation, the solicitor said she had been under “great personal and professional pressures” at the time.
“The impact of the pandemic on the business and the efforts made to recover following the loss of work and staffing levels was immense. Concurrently [she] was dealing with difficulties in her family life and in poor health.”
She told the tribunal that she had learned lessons from what had gone wrong, and “deeply regretted taking on work outside of her area of expertise”.
She had, she said, “delegated to experienced professionals but failed to ensure that there was effective oversight in place”.
The SDT described Ms Seth as “an experienced solicitor who either conducted or allowed business to be conducted in an area of practice where she had no experience or expertise”.
She “failed sufficiently to familiarise herself with the details” and failed to oversee the work adequately. “Such conduct invariably casts a shadow across the reputation of the profession.”
However, she had demonstrated “genuine insight”, cooperated with the SRA and admitted her misconduct. She had no previous regulatory history.
The tribunal assessed the seriousness of the misconduct as “moderate” and decided a fine of £7,000 was sufficient.
Removing Ms Seth’s ability to practise was neither proportionate nor necessary but it imposed conditions on her practising certificate prohibiting her from being a sole practitioner or a compliance officer.
The SRA sought costs of £52,000 but the SDT reduced them to £20,000 given Ms Seth’s financial situation and ordered that they not be enforced without its leave.
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