A solicitor who loaned £3.4m from clients’ estates and private lenders to other clients and “known individuals” – a broking operation he had carried out for decades – has been struck off.
Nicholas Peter William Skinnard, who qualified in 1983, told the Solicitors Disciplinary Tribunal (SDT) that the scheme was a “specialism of which I was proud”.
He admitted also loaning £83,700 to himself from one client’s estate to pay his personal tax bill.
The tribunal said Mr Skinnard kept individuals and charities waiting for their bequests, while supplying them with “untrue statements”, and “risked estate money in unsecured and improperly documented loans”.
The SDT said Mr Skinnard’s motivation “was not totally clear”, although he had derived some personal benefit from the loan system which he operated for many years.
“The tribunal considered that the respondent had committed a gross breach of trust in misusing funds from the estates of deceased clients.
“The testators would certainly have been horrified by his dealings with their money and its being diverted from the purposes they intended.”
Mr Skinnard admitted multiple rule breaches, although he insisted that his firm was compliant until the Solicitors Regulation Authority (SRA) changed the rules in 2012. He denied dishonesty.
He described the loan for his tax bill as “perfectly documented” and said that in no case had he acted for personal benefit. The loan system was “a specialism, of which I was proud, but it was not anything that consumed large amounts of fee earning time or energy”.
He went on: “My regret that these matters have arisen is sincere but I cannot apologise for the loan system as I carried it on in good faith believing it to be compliant. It actually helped lenders and borrowers wonderfully well for about 100 years.”
The SDT heard that Mr Skinnard was principal of Blight Broad & Skinnard, based in Callington, Cornwall, which was shut down by the SRA in November last year. More than 40% of the firm’s revenue came from wills and probate.
A charity beneficiary complained to the SRA in December 2018 over a delay in receiving a bequest, and the following summer the SRA launched an investigation.
This revealed that loans had been arranged to clients and other “known individuals”, including by borrowing from client funds, totalling over £3.4m by the end of August 2019.
The loans were a mixture of private loans, using money from private lenders in arrangements without any legal work being carried out, and probate loans, using money from clients’ estate assets where Mr Skinnard was the solicitor or executor.
“Many of the loans were made by inter-ledger transfers between client ledger accounts maintained by the firm.”
The SRA’s investigation report identified six improper ledger transfers where loans were entered into without the consent of beneficiaries, where Mr Skinnard acted for borrower and lender and there were no loan agreements.
At the time of the SRA’s investigation, nearly £450,000 was loaned out via private lenders, who would pay the money into the firm’s client account. Some of the loans were secured but others not.
The solicitor said his firm – which was not authorised by the Financial Conduct Authority – benefited from this through repeat business, charging a fee of £24 to collect and administer interest payments, and on occasion charging an arrangement fee of 0.5%.
Money was transferred from the private lenders or other clients to meet shortfalls on client ledgers where legacies needed to be paid to beneficiaries, and the SRA found a shortfall in client account of £123,000, having been as high as £287,000.
Mr Skinnard said he had “inherited” the loan system, which “had been in place for decades” and was “generally in the interests of estates and clients”.
He argued that the practice was open and the firm’s auditors had sight of what he was doing; had he been dishonest, he said, he could have “hidden” the £83,700 loan for his tax bill. He said the Law Society had also audited it in 2003.
However, the tribunal found he acted dishonestly. “A charitable interpretation would be that he drifted into dishonesty because he was not very efficient in undertaking probate work but what mattered was that he had crossed the line.”
Mr Skinnard was struck off and ordered to pay £39,100 in costs.