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Scottish Solicitors' Discipline Tribunal

15 May 17

Reports relating to Craig Andrew Fraser; Ivan Alexander Ralph; William Walls

Craig Andrew Fraser

A complaint was made by the Council of the Law Society of Scotland against Craig Andrew Fraser, solicitor, Tranent. The Tribunal found the respondent guilty of professional misconduct in respect of his: (1) repeated failure to adhere to the requirements of the CML Handbook by failing to disclose relevant information to his clients; (2) failure to comply with the requirements of the Code of Conduct for Scottish Solicitors 2002; (3) failure to comply with rule 6 of the Solicitors (Scotland) Accounts Rules 2001; and (4) failure in his duty at common law to act with the utmost propriety towards his lender clients, and that by withholding from them relevant information.

The Tribunal ordered that the name of the respondent be struck off the Roll of Solicitors in Scotland.

The respondent did not lodge answers or appear at the Tribunal. The Tribunal has made it clear on numerous occasions that a solicitor acting for the lender owes the lender the same duty of care as any other client. In this case the respondent withheld important information from his lender clients which would have affected their decision to lend. In numerous transactions the respondent failed to advise his lender clients that the properties had been owned for less than six months, that they were back-to-back transactions and that there was a significant difference in the purchase price within a short timescale. It must have been abundantly clear to the respondent that all was not right with these transactions, especially given the powers of attorney and mandates, and yet he continued to act and did not report these matters to his lender clients. The respondent clearly did not act in the best interests of his clients and in this case the Tribunal considered that the respondent did not act with utmost propriety in respect of his clients and facilitated mortgage fraud. It is essential for the public to have confidence in the legal profession and that solicitors act with integrity and fulfil their professional duties in all cases. The Tribunal considered that the respondent’s conduct in deliberately turning a blind eye to potential mortgage fraud demonstrated his lack of integrity and had brought the legal profession into disrepute, that it was at the higher end of the scale of professional misconduct, and that the respondent would be a danger to the public if he continued to practise as a solicitor. In the whole circumstances the Tribunal did not consider that the respondent was a fit person to remain on the Roll of Solicitors in Scotland.

[On 29 March 2017 Crown Office confirmed that the Tribunal could publish its decision. It was therefore agreed at a Tribunal on 21 April 2017 that this decision be published.]

Ivan Alexander Ralph

A complaint was made by the Council of the Law Society of Scotland against Ivan Alexander Ralph, solicitor, McEwan Fraser Legal, Edinburgh. The Tribunal found the respondent guilty of professional misconduct individually and in cumulo in respect of the preparation of a power of attorney in connection with client A in relation to the purchase of a property without obtaining the instructions of the purchasing client; his failure to advise client A of the fact that another client of his had paid a deposit towards the purchase price of the property; his failure to advise client A that the proprietor had paid £100,000 less for the property on the same day as it was sold to him; his failure to take client A’s instructions regarding the purchase of that property, about the transaction generally and to provide him with a title report containing a summary of the title conditions; his failure to provide client A with a terms of business letter in breach of rule 3 of the Solicitors (Scotland) (Client Communication) Practice Rules 2005; his failure to properly identify client A or to obtain an up-to-date proof of address for him, in breach of regs 7 and 8 of the Money Laundering Regulations 2007; his failure to discuss the terms of a mandate with client A; his failure in relation to five transactions to advise the lenders that the selling proprietors had owned the properties for less than six months, thus resulting in his failure to comply with the requirements set out at para 5.1.1 of the CML Handbook; his failure in relation to three transactions to advise the lenders that the borrowers did not provide the balance of the purchase price from their own funds, resulting in his failure to comply with the requirements at para 5.8 of that handbook; his failure to act in the best interests of client A and the lenders in respect of six properties, in breach of articles 2, 5 and 7 of the Code of Conduct for Scottish Solicitors 2002; his failure in relation to four transactions to advise the lenders that the properties had recently been sold for significantly lower prices, being information which the respondent should reasonably have expected the lenders to consider important in considering whether to lend to the borrowers, resulting in his failure to comply with the requirements at para 5.1.2 of the CML Handbook; his failure in relation to six transactions to report these matters to the lenders as soon as he became aware of them in terms of the requirements at para 2.3 of that handbook, and his transferring funds in respect of six transactions in breach of his instructions without the necessary authority of his clients, the lenders, in breach of rule 6(1) of the Accounts Rules.

The Tribunal censured the respondent and fined him in the sum of £10,000.

The respondent pleaded guilty to an amended complaint. The Tribunal has made it clear on numerous occasions that solicitors must always act in the best interests of all their clients, including their lender clients. In this case there were six transactions where the respondent failed to report properly to the lender to such a degree that the Tribunal considered the respondent’s conduct reckless. The Tribunal took account of the fact that the transactions were undertaken over a short period of time. It also noted that the respondent had been candid with the Society from the start of the proceedings and had accepted that he was guilty of professional misconduct. It further noted that the respondent had shown remorse and had demonstrated tangible insight into his failures. It particularly noted that there had been a number of Society inspections of the respondent’s practice since 2010 which had not disclosed any further repetition of these failures. Had the respondent come to the Tribunal shortly after the failures, the Tribunal would have undoubtedly imposed a restriction on his practising certificate. However given that the respondent was the sole equity partner in McEwan Fraser Legal, any such restriction would potentially result in the firm ceasing to trade and a significant number of individuals losing their livelihood. The respondent had demonstrated over a period of five years that there had been no repetition of his failures. The Tribunal accordingly considered that the respondent was not an ongoing risk to the public, but due to his blatant disregard for the CML Handbook, the Tribunal imposed a censure plus a fine of £10,000.

[On 29 March 2017 Crown Office confirmed that the Tribunal could publish its decision. It was therefore agreed at a Tribunal on 21 April 2017 that this decision be published.]

William Walls

A complaint was made by the Council of the Law Society of Scotland against William Walls, solicitor, St Andrews. The Tribunal found the respondent guilty of professional misconduct in respect of his failure to comply with the requirements of the CML Handbook, his breach of rule 24 of the Solicitors (Scotland) Accounts etc Rules 2001; his breach of rule 5(2) of the Solicitors (Scotland) Practice Rules 1986, his breach of rule 3 of the Solicitors (Scotland) (Client Communication) Practice Rules 2005, his failure to act with the utmost propriety towards two lenders he acted for by withholding information from those lenders, his failure to notify a lender of a delay in settlement and his failure to comply with regs 7, 8(2) and 14 of the Money Laundering Regulations 2007.

The Tribunal suspended the respondent from practice for a period of five years.

The Tribunal was of the view that when a solicitor takes instructions from a lender he owes that lender the same duties of care as any other client. The risks of mortgage fraud have been highlighted in the Law Society of Scotland’s Journal and the profession is well aware of them. Two of the transactions involved failures by the respondent to report key aspects of the transactions to the lenders in terms of the common law standard and a failure in one of the transactions to comply with the obligations imposed on him as provided for within the CML Handbook. In two transactions there was a failure by the respondent to act with absolute propriety and to protect the interests of his clients who were the lenders. In relation to the third transaction, although it did not proceed, it involved serious failures on the part of the respondent to comply with the Money Laundering Regulations. The correspondence in the three transactions detailed in the complaint disclosed a pattern of failure on the part of an experienced solicitor to abide by the clear rules of his profession, which were in place to protect the public and lending institutions from fraud. In view of this the Tribunal considered that the failures admitted by the respondent amounted to a course of conduct which would be viewed by reputable solicitors as serious and reprehensible and therefore amounted to professional misconduct in terms of the test set out in the Sharp case. The Tribunal noted the respondent’s medical condition and the fact that he had no intention of returning to practice, but in view of the seriousness of his failures the Tribunal considered it was necessary for the protection of the public that the respondent be suspended from practice for a period of five years to prevent him returning to practice within that time should his circumstances change.

[On 29 March 2017 Crown Office confirmed that the Tribunal could publish its decision. It was therefore agreed at a Tribunal on 21 April 2017 that this decision be published.]

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