PII: SRA failed to prove solicitor knew of its investigation
The Solicitors Regulation Authority (SRA) has again seen its costs slashed after the contested part of its prosecution of a solicitor failed.
While Anis Yusuf Dadu admitted that he wrongly failed to notify his insurer that he had taken on another firm’s cases, the regulator did not prove its allegation that he had dishonestly misled the insurer in a later proposal form.
The Solicitors Disciplinary Tribunal (SDT) reprimanded Mr Dadu, who runs Yorkshire firm XYZ Law, but halved the SRA’s costs to £14,000. This is the lowest sanction it can impose.
The costs decision also reflected the SRA’s withdrawal of an allegation that the notification failure showed a lack of integrity.
Mr Dadu, who qualified in 2006 and holds all the compliance roles at XYZ, took on the conveyancing and landlord and tenant cases of Notary Express in late 2020 and employed an ex-director and three staff as consultants to look after them.
Ahead of the deal, his broker, Mohammed Hanif of Legal Ex Plus, approached XYZ’s insurer, Inperio, about it. Inperio was clear that it did “not want to insure Notary Express, or incorporate its succession into a held Inperio risk in any shape or form”.
Mr Hanif passed this on but told Mr Dadu that “generally taking on new files [from Notary Express] on a referral basis should be ok”.
Mr Dadu had already signed a notice of succession. He told the SDT that all of his subsequent actions “flowed from the mistaken belief that it was permissible to take on the files from Notary Express” and that this would not amount to a material change to his insurance cover because they did not affect the type of work it handled.
He said he recognised “with hindsight” that he had not appreciated the strength of Inperio’s concerns about Notary Express; the insurer did not discover what had happened for several months.
The SDT said the failure to notify the insurer diminished public trust in the profession. Notary Express had been failing because it could not obtain insurance and this alone should have alerted Mr Dadu “to the need to ensure that the firm complied with the insurer’s requirements in relation to taking over the files from Notary Express and that any necessary approvals from the insurer were obtained”.
Further, the solicitor should have recognised the need to be “particularly diligent, as he was giving undertakings to honour all undertakings given by Notary Express in cases that were transferred”.
In July 2021, the SRA told Mr Dadu that it was to investigate XYZ Law’s conduct, shortly before he sent a proposal form to Inperio in which he confirmed that no-one at the firm had ever practised in a firm subject to an SRA investigation, and that there had been no material change to the practice in the past year.
In his defence, Mr Dadu said he believed the form was just focused on the Notary Express staff he had taken on, whose existence Inperio had become aware of through its own research.
He claimed not to have read the SRA’s email at the time he answered the questions, saying it had not been marked as urgent.
The SDT found the information provided to be incorrect and misleading “when assessed objectively”; Mr Dadu “should have been more diligent and should have made enquiries to ensure that he complied with the insurer’s requests”.
However, it was satisfied on the balance of probabilities that Mr Dadu “had not genuinely known that the PII form contained incorrect information”.
In particular, the SRA had not proven he knew about its investigation when submitting the form, or that Mr Dadu had not “genuinely thought” he could take on the Notary Express files without it constituting a material change to the business.
In deciding on sanction, the SDT said the misconduct had not caused any actual harm to the public – Inperio would not have been able to avoid the insurance policy anyway and “while it could have increased the premium, it had later still been able to do this anyway”.
In mitigation, Mr Dadu had shown he had “learnt his lessons” and had relied on Mr Hanif’s advice on insurance matters, “in which the tribunal accepted [he] was not well versed”.
It concluded that a reprimand “adequately protected the public and the reputation of the legal profession”.
We reported last week on the SDT reducing the SRA’s costs by more than three-quarters after failing to establish the contested part of its case.
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