Solicitor was “manifestly incompetent” in advice to elderly client


Diamond: Solicitor should have sought independent valuation

A solicitor has admitted manifest incompetence in failing to advise a 92-year-old client to refuse a £60,000 engagement ring and £35,000 car in part-payment of the property he was selling.

The Solicitors Disciplinary Tribunal approved an agreement between Ian McLachlan and the Solicitors Regulation Authority (SRA) that he would be suspended for a year and then immediately apply to remove himself from the roll permanently.

Mr McLachlan, who qualified in 1972 and is 76 years old, said he intended to retire.

The SRA’s probe began in late 2017 after a report from West Midlands Police arising from an investigation into the financial affairs of an elderly man, born in 1922, who had died.

According to the police, the man (Client A) had been persuaded to move in with his nephew (Person B), enter into two lasting powers of attorney (LPAs), complete a will and in 2014 sell the house he had only bought a year earlier.

The report said Client A was not made aware of the amount the property sold for and only received a small proportion of the sale proceeds.

Mr McLachlan, who at the time was a consultant at Birmingham firm GQS Ltd, acted for Client A in the sale of the property for £130,000, which the buyer was to pay with a diamond engagement ring valued at £60,000, a C-class Mercedes valued at £35,000 and the remaining £35,000 in cash.

According to the statement of agreed facts and outcome, the instructions were given by Person B as Client A’s attorney. Although the solicitor “correctly identified” Client A as his client, Mr McLachlan did not meet him in person and there was no evidence that he verified Person B’s instructions with him.

Mr McLachlan failed to advise Client A that the car was likely to depreciate in value, that both the car and ring had unknown provenance, and that there was “a real risk” that either or both could have been stolen property.

The file contained a valuation for the ring that did not include the name or address of the jeweller who provided it.

It was unclear why Client A would accept items “which may have been of limited use” to someone who had “at least some” mobility issues and was not in a relationship.

The SRA said Mr McLachlan should have satisfied himself that the valuations of both items were reasonable and that the buyer had good title to them. But he did not.

Ultimately, he “should have advised Client A against proceeding on the basis proposed and that he should, instead, have insisted on full monetary consideration”.

Mr McLachlan also failed to conduct adequate customer due diligence, with scanned copies of Client A’s expired passport and Person B’s passport the only identity documents on file. It was also unclear what enquiries he made to ascertain why Client A was selling the property and why he was accepting non-monetary consideration.

The SRA also contended that Mr McLachlan should have conducted enhanced due diligence to better understand the situation, such as why the buyer could not have sold the car and ring himself and then used the proceeds to purchase the property.

The solicitor drafted Client A’s will on Person B’s instructions, but failed to verify that Client A knew what was happening or check that he was not under any undue influence from Person B.

The SRA asserted that these events demonstrated Mr McLachlan’s “manifest incompetence”. A competent solicitor would have verified the client’s instructions, kept detailed records, ensured the client understood the consequences and risks of selling a property for non-monetary consideration and advised him to obtain independent valuations of the car and ring.

In non-agreed mitigation, Mr McLachlan offered a “sincere and genuine” apology, noting that it was not alleged he had been dishonest or lacked integrity.

He explained that, at the time, he had also been shutting down his own law firm and “with the benefit of hindsight and reflection, his attention was distracted by the need to effect an orderly closure, and he did not give the matter involving Client A the appropriate attention that he would otherwise have done”.

Mr McLachlan said he recalled speaking to Client A on the telephone and that he provided “clear instructions” that he was happy with all Person B was doing for him “and he was grateful to his nephew for looking after him when he could not cope on his own”.

In approving the agreed outcome, the tribunal said “the warning signs about Client A’s transactions were stark and obvious and that the admitted manifest incompetence in relation to this matter
was extreme”.

It went on: “Mr McLachlan’s culpability was high and the harm caused to a potentially vulnerable elderly client, as well as to the reputation of the profession, was very significant.

“In mitigation, he had had a long and otherwise unblemished career as a solicitor and had cooperated with the [SRA] and made full admissions.”

Mr McLachlan was also ordered to pay costs of £11,000.




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