Law firm fined for failing to recognise conflict that arose in probate case


Probate: Firm’s actions were not wilful

A law firm has been fined after failing to recognise that a conflict of interest had arisen in acting for both an estate and its personal representative after he made a claim on the estate.

The Solicitors Regulation Authority accepted that Chichester firm The Owen Kenny Partnership (TOKP) had not acted wilfully and said a £2,000 fine was an adequate sanction.

The regulatory settlement agreement published yesterday means the firm will not be referred to the Solicitors Disciplinary Tribunal.

According to the agreement, TOKP was instructed by ‘Mr A’ as personal representative of the estate of Ms B to act on behalf of the estate.

“Therefore, there was an obligation to act in the best interests of all of the beneficiaries [Ms B’s four siblings under the intestacy rules]. The firm was not instructed by Mr A in his personal capacity.”

Shortly before Ms B’s death, Mr A had instructed a solicitor at the firm to visit her with a view to writing a will. He then asked the solicitor to attend again with a male colleague as he felt Ms B would be more receptive to man.

“The solicitor made it clear to Mr A that she could not do so as Ms B had expressed her firm, compos mentis, wish that she did not want to make a will,” the SRA recounted.

After her death, Mr A claimed that Ms B made a deathbed gift to him of her £550,000 home, which constituted the vast majority of the estate.

Given the impact on the other beneficiaries, “it should have been identified that a potential conflict of interest had arisen”, the agreement said.

The solicitor did not do so and instead advised that counsel’s advice should be sought on the issue, which she considered a “technical matter”.

Counsel was told that Mr A was instructing them “in his capacity as a beneficiary of the estate”. Counsel’s advice did not explicitly identify Mr A as the personal representative, going on to say the deathbed gift was valid.

The solicitor told the beneficiaries that TOKP was proceeding with first registration of the property in Mr A’s name but stopped at the request of solicitors for ‘FK’. At this point, the solicitor left the firm.

Another solicitor took over conduct of the file but the firm still failed to identify any conflict.

The firm wrote to FK’s solicitors, stating that it regarded Mr A as it client – the SRA said it appeared, and a court later concluded, that TOKP was acting as if it was representing Mr A’s personal interest. This was contrary to its initial instructions.

The SRA continued: “Despite the solicitors acting for FK’s attempts to intervene, the firm oversaw the eventual registration of the property to Mr A despite the firm’s advice to him not to do so. Mr A instructed the firm to proceed with this despite the risks of challenge from FK’s solicitors.

“The firm acting for FK issued proceedings on 3 December 2014 to recover the property from Mr A.”

TOKP admitted that, “by failing to assess the file independently” after the first solicitor left, “and continuing to act for Mr A as a personal representative to the beneficiaries, once it was aware he was claiming his personal right over the property of Ms B’s estate, a conflict of interests had arisen”.

The SRA accepted that there was “no wilful decision” by the firm to continue to act despite a conflict having arisen, while it had taken “remediation steps” in relation to the matter.

“The SRA considers that a fine is the appropriate outcome here because the admitted conduct was serious but not so serious that a sanction by the tribunal is necessary or proportionate in order to maintain professional standards and to uphold public confidence in the solicitors’ profession.”

As well as the £2,000 fine, TOKP agreed to pay costs of £2,000.




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