Partner secretly worked on deal with his firm on opposite side

SDT: Conflict of interest

An experienced partner who secretly worked on the purchase of a property where his firm was acting for the seller has been fined £32,000 for a lack of integrity.

John Charles Wright accepted that his conduct “fell below the high standards of a solicitor in practice”, the Solicitors Disciplinary Tribunal (SDT) heard, but also sought to blame the firm in part for what happened.

Mr Wright, admitted in 1991, was one of three partners at London firm Ashley Wilson when a fee-earner began acting on the sale of a property for £1.8m. The memorandum of sale listed Mr Wright as acting for the buyer, a friend of his.

It was then agreed that the firm should not act for both, as there was a potential conflict, and would continue acting just for the seller.

The buyer moved to South London firm NC Morris, which, unbeknown to Ashley Wilson and the seller, was given instructions for what followed by Mr Wright.

Two days before completion, NC Morris claimed that the selling agent had misdescribed the property, causing the buyer to offer too much. Ashley Wilson refuted this and, when the buyer failed to complete, served a notice to complete.

NC Morris then sent a pre-action protocol letter which said its client was seeking damages of £589,000 for the alleged difference between the agreed purchase price and the actual value of the property.

The sale completed a week later, although the buyer did so without prejudice to the possible claim. No litigation ensued, however.

Mr Wright left Ashley Wilson in February 2020. One of his former partners found his file on the transaction and reported him to the Solicitors Regulation Authority (SRA).

The investigation discovered that Mr Wright had paid the deposit on the property, instructed NC Morris throughout and drove the threatened legal action, at one point telling the fee-earner at NC Morris that the pre-action letter needed to be more aggressive as well as attending conferences with counsel.

Mr Wright admitted that he had acted where there was an own-client conflict and with a lack of integrity. He also admitting instructing NC Morris to make two payments totalling £53,000 to third parties that were not involved in this or any other transaction.

In mitigation, Mr Wright offered his “sincere apologies” and admitted his conduct “fell below the high standards of a solicitor in practice”.

He described as “regrettable” his firm’s decision to continue acting for the seller, given that his colleagues knew of his close relationship with the buyer. It would have been “more prudent to advise them to seek alternative representation”.

The solicitor said he took “some responsibility” for this but said the firm should have advised the seller of its relationship with the buyer, “particularly when it was clear to all parties that a dispute had arisen”.

Mr Wright also argued that the allegations of misdescription were “well founded”. The dispute could have resulted in lengthy litigation had he not persuaded the buyers to drop their putative action, after one of his partners asked him “to use his influence to prevent litigation to the advantage of the sellers”.

The SDT approved an agreement between the SRA and Mr Wright that he be fined £32,000, which noted that – although the price was not reduced – his conduct caused the seller “distress” and to incur extra legal costs.

“Mr Wright was motivated by his desire to reduce the purchase price of the property to his benefit and the detriment of the firm’s client,” the SDT said. “His conduct was in direct conflict with the duties he owed to his firm’s client…

“In mitigation, the tribunal noted that this was an isolated incident in a previously unblemished career. He had co-operated with the [SRA] and had made early and full admissions.”

It agreed that a fine was the appropriate sanction.

Mr Wright also agreed to pay costs of £19,000.

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