Solicitor “took advantage” of client with literacy problems

SDT: Rule against taking unfair advantage applied to solicitor in personal capacity

A solicitor who took unfair advantage of an older female client and close friend, persuading her to make a loan on extremely favourable terms to a company he controlled, has been struck off.

The Solicitors Disciplinary Tribunal (SDT) heard that, just three weeks before the death of Client A at the age of 74, Ashton Lloyd Doherty arranged an interest-free loan of £193,000.

It enabled Mr Doherty to acquire a property in Swindon on terms that the client received 90% of the rental income (if any) made over the 20 years of the loan, and he kept the rest. Further, the capital sum reduced 5% a year.

The SDT said that even though Mr Doherty had not acted for Client A in the loan agreement, the rule against taking unfair advantage applied to solicitors in their personal and professional capacity.

The tribunal said the arrangement was “greatly” to his advantage and to Client A’s “considerable financial detriment”.

“It was not necessary, indeed it was very surprising, to dispose of capital in order to secure a modest monthly income which, according to [Mr Doherty’s] evidence, was Client A’s objective.”

The tribunal accepted the evidence that the solicitor and Client A had become close friends over the years.

“However, the longstanding friendship began with a solicitor/client relationship, and over several years the respondent had provided legal advice to Client A.”

The SDT said although Client A “may have had some maternal feelings” and wanted to “confer an advantage” on her lawyer, Mr Doherty’s status as a solicitor was “a linchpin of their relationship and as well as being the origin was an ever-present backdrop to it”.

The tribunal said it did not accept the contention of the Solicitors Regulation Authority (SRA) that Client A was vulnerable – according to the dictionary definition – but “it did find that her very limited literacy skills exposed her to additional risks and increased her reliance on others”.

Finding that Mr Doherty had acted dishonestly by arranging the loan, the SDT described as “disingenuous” attempts he made to distance himself from the transaction by allowing Client A to be advised by the solicitor he had instructed to represent his company – a solicitor that Client A had herself used in the past.

That solicitor said Client A had “robustly dismissed” his suggestion that she take independent legal advice.

It concluded that Mr Doherty has also acted dishonestly. “The tribunal found it inconceivable that the respondent was not aware that as a solicitor in such circumstances, as a minimum, he owed an obligation to Client A to ensure that she fully understood the terms of the arrangement and had independent advice upon it.”

Mr Doherty, who qualified in 2001, was a consultant solicitor at Systech Solicitors at the time of allegations, now part of global construction consultants Systech International.

Mr Doherty said in a letter to the SRA that he met Client A and her husband around 1998, when they were clients of the firm where he was a trainee, and over time they became friends. He described Client A as keen to “use her capital for short-term loans”.

In a separate set of allegations, the SDT found that in November 2010 Mr Doherty acted for three different parties – Client A, Client B and company FE – in relation to a £30,000 loan from FE to Client B, secured against Client B’s interest in Property 1, in priority to an existing loan of £315,000 secured by Client A.

Mr Doherty admitted acting where there was a conflict of interest. The tribunal found that he had also acted without integrity and in a way that failed to maintain trust in the profession.

The solicitor was also found to have broken the rules, which he denied, by failing to explain to Client A the risks of allowing a second charge to take priority over her charge.

On sanction, Mr Doherty’s QC did not argue that there were exceptional circumstances that applied in this case and he was “sanguine about the consequences” given the tribunal’s findings.

The SDT said Client A’s family was concerned by the lack of legal advice she received and Client A’s estate was “involved in litigation with the respondent which, whatever the outcome and merits of those proceedings, could have been simplified or avoided” if she had been properly advised.

Mr Doherty was struck off and ordered to pay £25,000 costs.

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