Scottish Solicitors Discipline Tribunal
Reports relating to James William Craig; George Anthony Macpherson Sandilands; Manus Gerard Tolland; Manus Gerard Tolland and Iain Robertson
James William Craig
A complaint was made by the Council of the Law Society of Scotland against James William Craig, solicitor, Glasgow. The Tribunal found the respondent guilty of professional misconduct in respect of his failure to comply with the Accounts Rules insofar as they relate to the Money Laundering Regulations and in particular rule 24, his failure to comply with regs 5 and 14 of the Money Laundering Regulations 2007, and his failure to comply with part 7 of the Proceeds of Crime Act 2002, in particular s 330. The Tribunal censured the respondent and fined him in the sum of £2,500.
The Tribunal considered that the circumstances of this case were such that the respondent should have spotted that there was something obviously suspicious about the nature of the transactions involved. The issues of money laundering and possible mortgage fraud were highlighted in the Society’s Journal in January and August 2009 and were topical within the profession at that time. The Tribunal accordingly had no hesitation in making a finding of professional misconduct. The Tribunal found it very concerning that a solicitor who was such an experienced conveyancer and who was risk partner, client relations partner and money laundering reporting officer for his firm was not alerted to the possibility that these transactions may have been designed to facilitate the obtaining of mortgage funding by deception. The Tribunal, however, took account of the respondent’s remorse and unblemished past record and the fact that the Society has had no further cause for concern. The Tribunal considered that it was necessary to impose a fine in addition to a censure to show the seriousness with which it viewed this type of conduct.
George Anthony Macpherson Sandilands
A complaint was made by the Council of the Law Society of Scotland on behalf of the secondary complainer against George Anthony Macpherson Sandilands, Andrew K Price Ltd, Kirkcaldy. The Tribunal found the respondent guilty of professional misconduct in respect of his failure to respond timeously, accurately or fully to, and his failure to communicate effectively by providing clear and comprehensive information in response to, correspondence and statutory notices sent to him by the Society.
The Tribunal censured the respondent and fined him in the sum of £1,500.
The respondent failed to reply to numerous letters and notices, which clearly hampered the Society in the performance of its statutory duties and was prejudicial to the reputation of the legal profession. The respondent’s failure to respond also delayed the Society’s investigation into the complaint of inadequate professional service in relation to an estate. This has a negative impact on public trust in the profession. The Tribunal accordingly had no hesitation in making a finding of professional misconduct. It did not make any award of compensation, but considered that it was appropriate to impose a fine of £1,500 in addition to a censure, given the respondent’s blatant disregard for correspondence received from the Society and his numerous failures to respond.
Manus Gerard Tolland and Iain Robertson
A complaint was made by the Council of the Law Society of Scotland against Manus Gerard Tolland and Iain Robertson, solicitors, Paisley.
The Tribunal found the first respondent guilty of professional misconduct in respect of conduct amounting to a failure on his part to comply with the terms of the common law standard applicable to a solicitor acting on behalf of a lender in a conveyancing transaction, his failure to comply with the CML Handbook for Scotland, and his failure to act with absolute propriety and to protect the interests of his client being the lender in respect of a transaction. The Tribunal censured the first respondent and fined him in the sum of £500.
The Tribunal found the second respondent guilty of professional misconduct in respect of his failure to adequately supervise his employee, the first respondent, who was acting in the course of his employment whereby the first respondent failed to abide by established conveyancing practice and adhere to the duties which he owed to his clients, the lenders. The Tribunal censured the second respondent and fined him in the sum of £1,500.
The Tribunal heard evidence and found the conduct of the respondents was sufficiently serious and reprehensible in terms of the Sharp case to amount to professional misconduct. Although only one transaction was involved, the Tribunal considered that the terms of a memorandum, when taken with the information provided in two letters from another firm of solicitors, were such that any competent and reputable solicitor would have been alerted to the potential of mortgage fraud. These serious matters should not have been ignored and the first respondent had an obligation to advise the lender. The Tribunal has stated on numerous occasions that solicitors have a duty to report to the lender any suspicious or unusual circumstances occurring in respect of a transaction. A solicitor, when acting for both lender and borrower in a conveyancing transaction, requires to act with absolute propriety and to protect the interest of the lender with the same degree of care and responsibility as is given to a purchaser. The risks of mortgage fraud have been highlighted in the Society’s Journal and the profession is well aware of them.
The second respondent accepted that he was the only partner in the firm and had responsibility for supervision. The first respondent drafted a memorandum raising concerns with the transaction. Despite this, the second respondent did not do anything to ensure that the building society was informed, and adhibited the firm’s signature to the report of title when he knew of the unusual background circumstances.
The Tribunal, given that this only involved one transaction, did not consider this to be one of the most serious breaches of the CML Handbook.
Manus Gerard Tolland
A complaint was made by the Council of the Law Society of Scotland against Manus Gerard Tolland, solicitor, Paisley. The Tribunal found the respondent guilty of professional misconduct in respect of his failure (a) to comply with established practice and the common law standard applicable to a solicitor acting on behalf of a lender in a conveyancing transaction, and in particular his failure to report to his client unusual circumstances in relation to a number of conveyancing transactions; (b) to comply with explicit instructions provided by his client, being those obligations imposed by the CML Handbook applicable to Scotland; and (c) to act with absolute propriety and to protect the interests of his client being the lender in respect of each transaction in that he failed to report to his client certain unusual circumstances which arose.
The Tribunal censured the respondent, fined him in the sum of £2,000 and directed in terms of s 53(5) of the Solicitors (Scotland) Act 1980 that for a period of five years any practising certificate held or issued to the respondent should be subject to such restriction as will limit him to practising in the area of criminal law.
The whole point of the CML Handbook is that the solicitor acting is required to put disclosure in writing to the lenders to allow them to consider their position. It cannot be emphasised enough that a lending institution is a client like any other and is owed the same duty of care. The respondent had signed all the certificates of title himself, in the clear knowledge of all the matters that required to be disclosed. The complete lack of disclosure in this case represented a fundamental failure in the duty owed. In particular, irregularities in relation to deposits were of great concern. The respondent’s conduct clearly fell well short of the conduct to be expected of a competent and reputable solicitor and could only be regarded as serious and reprehensible. Accordingly, the Tribunal found the respondent guilty of professional misconduct.
The Tribunal held that this case fell in the middle of the range of this type of misconduct. There were 13 separate transactions, each involving a failure to disclose important pieces of information fundamental to the relationship between purchaser and lender, and obvious issues of disclosure regardless of the added requirements of the Handbook. The respondent conceded they were recognised and understood by him. However, this case did not include some aggravating factors of many Handbook cases. The respondent had met with each purchaser. There was now no suggestion of breaches of the Money Laundering Regulations.
In considering the appropriate disposal, the irregularities regarding deposits caused particular concern. Because of the practice adopted by the respondent it was impossible to tell if these were ever paid to the seller. Issues of protection of the public required that the Tribunal consider whether the respondent should remain as a principal in private practice. The Tribunal concluded that it was appropriate to restrict his practising certificate, limiting him to criminal work for a period of five years, and further to mark the seriousness of the case with a fine. Given the number of transactions and the complete lack of disclosure, a fine of £2,000 was considered appropriate.