Another SRA prosecution fails but regulator avoids costs order

SDT: SRA had duty to investigate

The Solicitors Regulation Authority (SRA) was justified in prosecuting two law firm partners even though all of the allegations were dismissed, a tribunal has ruled.

The Solicitors Disciplinary Tribunal (SDT) rejected a bid by Andrew Elliott Board and Christine Anne Haniver to be paid costs, although the regulator will have to swallow its own costs of £51,000.

The general rule in unsuccessful prosecutions is that, recognising the SRA’s public interest role, there is no order for costs unless the prosecution was improperly brought.

It is the third case we have reported just this month where a prosecution failed – the SRA was ordered to pay costs in one of them, but not the other.

The SDT said the rejected allegations here, over the lawyers’ conduct while acting under a client’s lasting power of attorney, were “serious ones” which had been brought to its attention by the Office for the Public Guardian (OPG).

This was not a case in which the SRA “had pursued an entirely hopeless case or had made such errors to render it a shambles from start to finish”, it went on.

The SRA had been under “a duty to investigate” and there was a case for the two lawyers to answer. While they had not been under an obligation to do so, they “had not helped themselves by not fully recording their decision making at the time”.

The tribunal added: “Whilst some of the evidence may have changed during the proceedings, the applicant had not acted unreasonably or disproportionally in pursuing the matter in the public interest.”

Mr Board, who qualified in 1973, was a former partner, and now a consultant, at Sussex firm Cornfield Law. Ms Haniver was a chartered legal executive and became a partner in 2010.

Client A had been a friend of Mr Board since his childhood and Cornfield Law had prepared his will. After his wife’s death, Client A, who had no children, lived alone.

As a “general observation”, the tribunal said it considered that the two lawyers were “credible and truthful witnesses” and that they had tried to do their best for their elderly client “in circumstances where his health and quality of life had been deteriorating to ensure that his remaining years were lived out in some comfort and contentment”.

The SDT said the OPG submitted a report to the SRA about Client A in August 2015 that identified concerns about the management of Client A’s finances, in particular that loans had been made on his behalf by Mr Board and Ms Haniver, acting as attorneys.

The OPG had been in the process of making an application to the Court of Protection to remove them as attorneys, but Client A then died.

The SRA accused the pair of allowing £15,000 held on behalf of Client A to be transferred to a company operated by his carer, Ms C, when it was not in his best interests.

Mr Board was accused of acting for Ms C or her company when there was a conflict of interest with his role as Client A’s attorney and Ms Haniver of permitting him to do so.

The two lawyers were also accused of failing to take adequate steps to recover repayment or interest on the loan of £15,000 and an earlier loan of £30,000.

A further allegation against Mr Board was that after client A died, he failed to secure repayment in his role as sole executor.

However, the SDT found that Client A had “enjoyed” the companionship of Ms C and “had been made to feel part of her family”.

It was satisfied that the two lawyers “had acted in Client A’s best interests in order to maintain as far as possible the help and support to Client A and upon which he had come to rely”.

The SDT said the second loan to Ms C’s company was not “inherently riskier” than the first, because the company was still “a viable business”. Although they were not repaid in full, both loans were secured.

The two lawyers should have “recorded with more detail” the reasoning behind the second loan, but Client A “willingly agreed” to make it.

“Despite appearances”, the tribunal said Mr Board had not been acting for Ms C’s company at the time of the second loan and there was no conflict of interest.

With respect to the alleged failure to recover interest and repayment of the loans, the tribunal said there had been “simple human error” by the two lawyers. The loss of interest was only £500 while the value of Client A’s estate was over £800,000.

After Ms C’s company ceased trading, the SDT said the lawyers had “exercised their professional judgment not to throw good money after bad in pursing the outstanding capital or interest element” of the loans.

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