
SRA: Solicitor showed lack of understanding of what constitues an undertaking
The Solicitors Regulation Authority (SRA) yesterday handed out a fine and a rebuke for breaching undertakings, one relating to property transactions and the other to a divorce matter.
Sussex firm Nicola Phillips Solicitors (NPS) was instructed first for the purchaser in a commercial conveyancing deal and in March 2021 gave an undertaking to the lender’s solicitors that it would pay their charges and disbursements, even if the transaction did not complete.
According to an SRA notice, the transaction aborted in June 2022 and the lender’s solicitors sought their costs – but were not paid until March 2024.
In the second matter, NPS was instructed on the sale of a property and undertook to discharge two charges upon completion. However, following completion in October 2021, only one mortgage was redeemed; the second remained outstanding until March 2023.
The firm breached the SRA code of conduct by failing to perform undertakings within the agreed timescale or a reasonable amount of time. In respect of the first matter only, it was also found to damaged public trust.
As part of the investigation, the SRA identified multiple accounts rule breaches as well.
NPS was ordered to pay a fine of £8,790 and costs of £1,350, with the SRA noting that it had previously been fined in 2016 and 2022 for similar accounts rules breaches.
“Many clients” had been affected by the accounts rule breaches and the conduct “persisted for longer than reasonable”.
Application of the SRA’s fining guidance led to a figure pitched at 2.8% of the firm’s turnover, reduced by 10% in recognition of NPS’s co-operation with the investigation and the admissions it made.
Further, there was no allegation of a lack of integrity or dishonesty, and NPS has “taken steps to remedy the failures identified and to bring itself into compliance with the rules”.
Christopher Sweetman, a sole practitioner at Sweetman Solicitors in Leicestershire, was instructed to act for a client in divorce proceedings.
The notice said that he was, at the time, also a director of a non-SRA regulated company which provided a range of legal and non-legal services to those seeking a divorce. It had three other, non-solicitor directors.
Though not named by the SRA, this would appear to be Fair Result, of which Mr Sweetman is still a director; one of his co-directors is former England footballer Mark Wright.
The SRA said that, soon after taking instructions, the other two directors (‘Mr and Mrs A’) made an offer to purchase the client’s former matrimonial home, although it was subsequently withdrawn.
In August 2023, Mr Sweetman gave an undertaking to the other divorce party’s legal representative that he would not share its financial information, or any correspondence, with Fair Result or Mr and Mrs A.
He also undertook that all correspondence would be from himself as an individual and not in the name of the company and that the file would be personally handled by him.
However, he breached his undertaking four times between February and July 2024: he emailed the other party’s lawyer from his email address at Fair Result and copied in Mr A; attached a revised letter of instruction to the single joint expert which contained revisions made by Mr A; three times on the same day (6 February) emailed the jointly instructed surveyor from his Fair Result email address; and asked Mr A to prepare a settlement agreement, which Mr A did.
Mr Sweetman admitted his breaches, had shown remorse and apologised to the SRA, the regulator said.
In mitigation, he said most of the breaches were technical breaches “because he sent emails from his email address at the company and were not copied to any third party”. There was no harm caused or deliberate intent, while he has “since read guidance on undertakings to avoid repetition in future”.
However, the SRA recorded that court had, in January 2024, reminded the parties to maintain confidentiality throughout the proceedings.
Two of the emails sent on 6 February happened after the other side’s lawyer had drawn Mr Sweetman’s attention to the first being a breach of the undertaking, while the final breach occurred after the SRA told him it was investigating his conduct.
The SRA said: “Mr Sweetman has demonstrated a lack of understanding in relation to what comprises an undertaking and the obligation a solicitor’s undertaking creates. There is a risk of repetition if he were to give any undertakings in future. His conduct was reckless as to the risk of harm/his regulatory obligations.”
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