A solicitor has been fined for acting for clients in a property dispute knowing they had a possible negligence claim against the firm for causing the litigation in the first place.
Gordon Sewell also threatened one of the clients that he might take libel action over information they had provided to the Solicitors Regulation Authority (SRA).
Mr Sewell, who qualified in 2008, worked at Hull firm Williamsons at the time but now runs his own firm in Beverley.
According to a regulatory settlement agreement published by the SRA yesterday, Williamsons acted for Clients A and B on the purchase of a residential property.
The owner of an adjacent farm gave an assurance that they would be able to access electricity but the firm did not advise on whether the conveyance should secure this agreement.
The transaction completed in January 2018 and in December the clients instructed Mr Sewell to act in a dispute with the farm owner about access to electricity.
The other side’s solicitor told him that he was conflicted and should not act, but he continued to do so. The agreement went on: “At the court hearing dealing with the dispute, the presiding judge commented that there was a clear conflict between the clients and what they had been told by the firm.”
The litigation was unsuccessful and the clients instructed a professional negligence barrister to pursue the firm. The barrister also reported his concerns to the SRA.
The SRA said its investigation identified that Williamsons did not make enquiries of the clients or anyone else as to what arrangements were in place (or needed to be put in place) for the property’s electricity supply.
There was no evidence that the firm had advised the clients on the verbal agreement with the farm owner and, in particular, the risk of failing to obtain it in writing.
The solicitor with conduct of the matter emailed Mr Sewell in January 2020 to say that the clients agreed to proceed on the basis that a separate agreement on the electricity supply had been reached between the seller and the farmer.
The email added: “With hindsight perhaps I should have delved deeper but the clients were adamant it was all sorted.”
The SRA said there was no file note or other record explicitly showing that the Mr Sewell had “considered the issue of potential professional negligence claim against the firm and/or setting out his reasoning in deciding that he could continue to act on their behalf”.
Likewise, there was no record of him advising the clients that they may wish to seek independent legal advice.
Then, in December 2022, Mr Sewell wrote to Client B, saying: “Regrettably, the statement signed by you [relied on by the SRA as part of the investigation] is defamatory, and given that it is going to form part of the SRA’s submissions to the adjudicator, the statement will cause the adjudicator to think less of me because of comments that have been made within the statement, which are not true. This is very serious…
“Please can you kindly reconsider the statement and confirm whether or not you are prepared to retract the comments about my character. If you are not prepared to do this or do not reply, I will need to consider my position further, including how I deal with the defamatory statements made about me.”
Mr Sewell admitted in the agreement that he accepted instructions in December 2018 knowing the clients had a potential claim against the firm and without advising them to take independent legal advice.
He also admitted that he continued to act for nearly two years “in circumstances giving rise to an own interest conflict, or a significant risk of an own interest conflict”.
Finally, Mr Sewell admitted that the email to Client B breached paragraphs 1.2 (“You do not abuse your position by taking unfair advantage of clients or others”) and 7.5 (“You do not attempt to prevent anyone from providing information to the SRA…”) of the code of conduct for solicitors.
However, the fine was only £750. The SRA said the figure was determined “as a basic penalty based on a percentage of his gross annual income in the most recent tax year prior to submission to the decision maker”.
The agreement did not provide more detail, unlike other notices on fines recently published by the regulator.
We have reported this week on a solicitor fined over £13,000 for a drink-drive offence, as the SRA’s relatively new approach to fines kicks in.
Mr Sewell is also paying costs of £2,175.