David Carter Hughes, who is now head of property at the Irlam office of Manchester firm Bannister Preston, was recently issued with a fine of £15,000 for providing incorrect information to 115 clients regarding their ground rent terms. In this article, we will review the circumstances that led to the fine and the Agreed Outcome between the SRA and Mr Hughes.
Circumstances Of the Case
A complaint from a client of Bannister Preston Solicitors was first received in 2019, citing incorrect advice on the terms of the lease and the cost implications provided by Mr Hughes. Following an investigation by the firm into the matter, they discovered that the firm used a precedent report on title for Taylor Wimpey conveyancing matters between 2008 and 2015, which Mr Hughes had drafted.
The root of the problem was that the precedent report did not reflect changes in Taylor Wimpey’s ground rent for leasehold properties. Taylor Wimpey leaseholds historically came with a provision allowing ground rents to double every 25 years, however, this changed in 2008 to every 10 years for some leasehold properties. The precedent report drafted by Mr Hughes should have reflected these changes. As a result, he provided out-of-date information on 115 conveyancing matters.
Taylor Wimpey made additional amendments to its ground rent in 2012 to include an RPI-based increase every 10 years. Bannister Preston did modify their precedent report to reflect these changes but did not remove old templates from its system.
Following the complaint in 2019, the SRA found that the retention of old and outdated report templates led to incorrect information being given to clients. The SRA also found that incorrect initial ground rent guidance had been given to clients.
In response, Mr Hughes explained that the aim of drafting a new precedent report was to provide a better service to clients. He explained his intention was to improve “the standard of service to my clients by producing a more detailed report on title document”. He went on to state, “I admit that there was a failure of the systems and controls during this time that led to a number of clients being incorrectly advised. I have since put in place comprehensive procedures and processes to ensure that this will not happen again”.
The Agreed Outcome also stated:
- The firm had written to all clients given the incorrect ground rent information.
- Mr Hughes had offered assistance to those affected and continued to do so.
- Mr Hughes had been frank and open with all concerned from the moment the complaint was raised and showed genuine insight and acceptance of his accountability.
- Mr Hughes stated he had not acted deliberately to compromise his client’s best interests.
- Mr Hughes and the Firm have co-operated fully with the SRA’s investigation.
A statement of agreed facts was drafted by the SRA outlining the basis of the complaint, the finding, and mitigations; this was then put to the SDT to be rubber-stamped.
The SDT stated, “The tribunal determined that Mr Hughes (a) acted mistakenly as opposed to intentionally, (b) placed too heavy a reliance upon what appeared to be bulk processing of conveyancing matters relating to Taylor Wimpey, (c) demonstrably lacked attention to detail, (d) was directly in control in that he had conduct of the conveyancing matters and (e) was experienced at the material time”. Taking into account the various mitigations and the cooperation of Mr Hughes, the SDT concluded that the actions of Mr Hughes amounted to “very serious” misconduct and approved the SRA’s Agreed Outcome including a fine of £15,000 and an order to pay £13,350 in costs.
This case highlights the potential cost to clients and reputational harm to solicitors arising from errors in drafting and document management. Such outcomes may be avoided by implementing a robust document management system that manages the version control of templates and ensures accuracy through built-in review, reminder, and approval mechanisms.
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