The former head of private client at London firm Kingsley Napley has been fined £15,000 for transferring over £1.5m from the estate of a wealthy foreign national to his widow, despite knowing she was in a dispute with the deceased’s children.
The Solicitors Disciplinary Tribunal (SDT) found that Matthew Duncan also knew that the limited grant of representation obtained by the widow as administratrix of the estate did not permit her to request payments.
However, the tribunal said Mr Duncan’s misconduct “arose from errors he made” and there was “no malign motive”.
He had nevertheless jeopardised the position of the widow, referred to as Client A, in circumstances where he had not fully advised her of the risks.
Matthew Neil Richard Duncan was born in 1973 and qualified in 1998. The events that led to disciplinary action meant he had to leave Kingsley Napley and he said he has “suffered significant financial loss as a result”.
Approving an agreed outcome between Mr Duncan and the Solicitors Regulation Authority (SRA), the SDT heard that from March 2010 to October 2017 Mr Duncan was an equity partner at Kingsley Napley and head of the private client department.
Client A was involved in a dispute with the children of her late husband, described as “an ultra-high net-worth foreign national”, including over the extent of their respective shares in the estate under the local laws of the husband’s country of domicile.
Client A was granted administration of the English estate of her husband in July 2014, but the grant was limited to getting in the assets and preserving them, and not doing anything more without a further grant of probate or permission of the court.
The tribunal heard that notwithstanding this, Mr Duncan paid £750,000 from the estate to Client A in October 2015, “by way of an interim distribution at her request”, doing so “in the knowledge that Client A was not entitled to make that distribution”.
The SDT said that since Mr Duncan knew that the English estate of Client A’s husband was worth over £9m and he owned “valuable assets in other jurisdictions”, the solicitor “believed he was justified in making the distribution because it was ultimately a small proportion of what she would receive”.
Mr Duncan followed this up by making six payments to Client A between October 2015 and May 2016 totalling over £825,000 – payments which were made “on account of expenses incurred by Client A as administratrix of the estate”.
The SDT heard that the law was “unclear” whether Client A was entitled to receive the expenses payments.
In making the £750,000 payment, Mr Duncan admitted that he “fully advised” Client A that her grant of representation was limited and “did not confer authority upon Client A to direct the making of that payment”.
In relation to all the payments, Mr Duncan did not advise Client A that the making of them might be relied upon by the children in support of an application to replace her as administrator, that they might trigger other claims by beneficiaries of her husband’s estate, and that, if a claim was brought, Client A could be liable for costs.
The tribunal also heard that, in a separate incident, Mr Duncan was given a sum of £500 in cash by a second client, Client B, in March 2015, “which was then lost”.
Mr Duncan said in mitigation that the payment of £750,000 was made because Client A was “without income” following her husband’s death and he “honestly believed he was doing the right thing for the client, having regard to the terms of the grant”.
The solicitor said he “honestly believed” the further payments of £825,000 were permitted by section 31 of the Trustee Act 2000.
Mr Duncan said he provided “some advice” to Client A on the payments of £825,000 for expenses, warning her that some or all of the money might have to be repaid.
Although he accepted that he was ultimately responsible for ensuring the £500 was paid into Kingsley Napley’s client account, he insisted that he did not deal with the money “in an improper manner”.
He was fined £15,000 and ordered to pay costs of £7,500.