A solicitor who ‘witnessed’ the signatures of a client’s father that were already on property documents, without checking their authenticity, has been fined £20,000 by the Solicitors Disciplinary Tribunal (SDT).
The documents, relating to a loan secured by a charge over the father’s property, bore what “purported to be the father’s signature” but the father denied it was his and got the charge removed.
Edward John Harvey Statham, who at the time was an assistant solicitor at Lancashire firm Inghams and is now a partner, admitted what he had done in an agreed outcome with the Solicitors Regulation Authority (SRA) and approved by the SDT.
Born in 1981 and qualified in 2006, Mr Statham acted for ‘Client B’ and his property company in a number of matters from 2006 to 2016. He had also acted for Client B’s father, Client A.
Both clients instructed the solicitor in 2013 in relation to a loan from Lender F, secured partly by way of a charge over a property owned by Client A.
He did not act when the £150,000 loan was refinanced in 2016, secured entirely by way of a charge on Client A’s property.
Nonetheless, Client B appeared at the offices of Inghams with a copy of both the secured lending agreement and CH1 form to register the charge and asked Mr Statham to witness the signatures of both him and his father.
Client B told Mr Statham that his father had already signed the documents and the solicitor accepted this and witnessed them, without attempting to verify the information with Client A.
Client B did not repay the loan and the lender appointed receivers to enforce the charge.
Client A denied that the signature on the CH1 was his and a handwriting expert agreed.
Following legal proceedings against Lender F, Client A secured removal of the charge against his property and an agreement to pay his costs of £16,500.
Client B was declared bankrupt later in 2016 and his property company went into administration and was dissolved in March 2019.
Lender F brought proceedings against Client B, Mr Statham and Inghams for the loss of the security. The outcome does not state what happened with this.
The SRA said the solicitor’s misconduct arose out of “an unexpected and misleading request from a former client”.
But Mr Statham was an experienced solicitor and knew that he ought to have refused the request; his failure to do so demonstrated a lack of integrity.
Mr Statham “did not personally benefit from his misconduct”, the SRA said, but both Client A and the lender suffered harm “as a result of [his] involvement in this apparent fraud, which the respondent could and should have taken basic steps to guard against”.
In non-agreed mitigation Mr Statham said that as soon as he received a letter from Client A’s solicitors setting out the father’s concerns, he met with the partners of Inghams and “made a prompt admission”. The firm then reported the matter to the SRA.
The SDT noted that the solicitor had admitted his misconduct “at an early stage” and demonstrated insight. This was also “a single episode in an otherwise unblemished career”.
Mr Statham was fined £20,000, to reflect the “very serious” nature of the misconduct, and ordered to pay £16,350 in costs.