SDT: Conditions no longer necessary
The Solicitors Disciplinary Tribunal (SDT) has removed restrictions on a solicitor who, after being suspended for three years for running in a stamp duty land tax (SDLT) avoidance scheme, became a compliance consultant.
Rajob Ali was initially fined £15,000 by the SDT for his misconduct in 2014, but after the Solicitor Regulation Authority (SRA) successfully appealed to the High Court for a stronger penalty, the case was remitted to the tribunal for re-sentencing.
Along with the suspension, conditions were imposed on Mr Ali’s practising certificate preventing him from being a law firm manager or owner, a compliance officer, and holding or receiving client money.
Richard Chan, who worked with Mr Ali at Harrogate firm Abode Solicitors, was similarly sanctioned. The law firm was shut down by the SRA in 2013 over accounts rule failures.
The solicitors advised clients on the avoidance scheme through their own separate Seychelles-based business, called Omega, which took a commission.
The original tribunal found them guilty of 20 rule breaches, of which 12 related to the accounts rules – including using the funds of one client to benefit another – and other matters, such as not informing clients of their arrangements and disposing of old client files in a skip.
The High Court said the SDT was wrong to find that the pair did not act without integrity or allow their independence to be compromised.
In his application to remove the restrictions, Mr Ali said that, within a year of his suspension expiring in 2018, he presented a workshop at the Law Society’s Lexcel conference, focusing on strategies to avoid non-compliance.
Mr Ali said he accepted that his misconduct involved “clear mistakes and errors of judgment” and was serious.
During his work as a Lexcel assessor, several law firms requested that he “transition from assessor to consultant, largely due to his deep understanding of Lexcel and CQS [Conveyancing Quality Scheme] standards, and his practical experience in running a law firm”.
Since 2018, he had “provided consultancy services to various firms, offering Lexcel and compliance support, and assisting COLPs and COFAs in fulfilling their regulatory obligations”.
Mr Ali said he had also held remote consultancy solicitor positions “in at least six firms, operating under the supervision of their partners and directors”.
However, the SRA, which opposed removal of the restrictions, said the SDLT avoidance schemes implemented by Mr Ali were found to be “aggressive, poorly advised, and carried significant risks for clients and lenders”.
His conduct was described as showing “a heedless indifference to client interests in pursuit of personal profit”.
The SRA said any evidence of rehabilitation “must be compelling”, given the seriousness of the original misconduct.
If the tribunal was “minded to grant partial relief”, the restriction on acting as a compliance officer should remain in place.
The SRA added that rehabilitation “would have been best demonstrated through supervised employment”, with a supervisor able to attest to Mr Ali’s ethical development.
“While the tribunal acknowledged the logic of this model, it did not accept that it was the only route to demonstrating rehabilitation,” the SDT said.
It concluded that, given the nature of the misconduct and duration of the suspension, it was “likely that most fair-minded members of the public would consider” that the conditions were no longer necessary.
“The tribunal noted that misconduct was not unique to the applicant’s firm, and similar practices were not uncommon at the time.”
It went on: “The misconduct concerned a failure to recognise and act upon obligations to clients and lenders, driven by a desire for financial gain. [Mr Ali] was candid and did not shy away from acknowledging this.
“He demonstrated openness and candour in his responses to cross-examination and presented as a genuine witness.”
The solicitor “acknowledged that he had defended his actions during the original proceedings, but no longer held that position”.
He had taken “considerable steps to educate himself on compliance and embed ethical considerations into practice”.
The restrictions were removed, and he was ordered to pay costs of £1,495.
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