SDT: Significant breach of trust
A solicitor has been suspended over a “dereliction of duty” that saw him act on both sides of the transfer of an elderly and vulnerable client’s sole residence to a neighbour for nil consideration.
The Solicitors Disciplinary Tribunal (SDT) found that Yusuf Jamal Siddiqui did not properly consider the conflict of interest and failed to conduct a proper assessment of the transferor client’s mental capacity, especially given the unusual nature of the transaction.
Mr Siddiqui, 50, qualified in 2010 and was a sole practitioner at YJS Legal in north-west London.
He admitted some of the allegations against him, including that during the retainer he failed to consider Client A’s right to remain in the property following completion, and that he had not advised Client A to seek independent legal advice.
He submitted, however, that both parties understood the arrangement and that he had addressed any potential conflict of interest to the best of his ability.
He was accused of charging Client A a “disproportionate and unjustified fee”, which was unspecified by the SDT but amounted to a quarter of his firm’s annual turnover. Mr Siddiqui said he had charged a fixed fee, 50% of which was paid by Client A.
He claimed the fee was intended to cover all future legal work undertaken on behalf of Client A, though acknowledged that this understanding was “not explicitly recorded” in the client-care letter.
But Mr Siddiqui denied failing to conduct a proper assessment of Client A’s capacity, saying he spent “considerable time” with Client A and observed no signs that to prompt concern – although he did not follow a structured process or seek expert input.
The SDT found that his assessment was insufficient, especially given the nature of the transaction – Client A transferring his sole residence for nil consideration was both “unusual and significant in its effect”; the correct legal test for mental capacity required a higher degree of understanding than would be necessary for a less consequential transaction and equivalent to that required for executing a valid will.
Both court and Law Society guidance underscored the need “for a thorough capacity enquiry and professional or medical input where appropriate, when advising on significant financial decisions, particularly involving gifts of property”.
The SDT concluded that the presumption of capacity under the Mental Capacity Act 2005 was rebutted.
“The respondent was under a positive duty to take reasonable steps to assess whether Client A had capacity to give valid instructions in relation to the proposed gift. [He] failed to do so.”
It also turned out that Client A had a lasting power of attorney (LPA) in place, which the solicitor had not checked.
Mr Siddiqui also admitted that his firm’s client account records were not properly maintained and that he allowed client money to be paid into his personal bank account, without ensuring its prompt transfer to the firm’s client account.
In mitigation, Mr Siddiqui said that, once he learned of the LPA, he took immediate steps to reverse the property transfer at HM Land Registry and refunded Client A’s fees.
He also instructed accountants to bring the firm’s financial records into compliance, voluntarily closed his firm’s client account and so ceased to hold client money, and underwent training.
On sanction, the SDT decided that a nine-month suspension would reflect the seriousness of the misconduct, which represented a “significant breach of trust”.
It explained: “The transaction exposed Client A – a vulnerable and elderly individual – to the potential loss of his home. The conflict of interest was real and immediate, and the respondent’s failure to recognise it represented a material dereliction of duty.
“That omission placed the client at significant risk and undermined public trust in the profession’s duty to protect vulnerable individuals.
“The key aggravating features of the misconduct were the deliberate overcharging and taking advantage of the Client A’s vulnerability.”
The SDT said the mitigation was undermined by Mr Siddiqui’s “limited insight into the seriousness of the misconduct which was demonstrated in the evidence he gave. Although certain remedial steps were taken after the event by the respondent, they did not reflect contemporaneous recognition of risk or responsibility”.
It also ordered him to pay costs of £21,130.