Society's appeal on misconduct finding refused
18 Nov 05
Discipline Tribunal entitled to hold misconduct not established in mortgage reports
The Court of Session yesterday upheld a decision of the Scottish Solicitors' Discipline Tribunal not to make a finding of professional misconduct against a solicitor in relation to two mortgage transactions.
The Law Society of Scotland had asked the court to review the tribunal's findings against Richard Shepherd after the tribunal made certain findings of misconduct, but not in relation to reports by Mr Shepherd to the mortgage lenders.
Inaccurate statements
In one case Mr Shepherd, when acting for a house purchaser in Aberdeen and for the lending bank, had informed the bank that the purchase price of the house was £65,000 against a loan of £61,750, when £5,000 of that price had been apportioned to moveables.
In another case, Mr Shepherd had stated that there was no connection between the seller and purchaser of two properties, when the seller was a company owned and directed by the purchaser's brother; had failed to disclose that he knew that the balance of the price was being paid by the purchaser direct to the seller and was not passing through solicitors; and had failed to disclose that the local authority had not yet issued a temporary habitation certificate in relation to either property.
The Society accepted that the court would only interfere with the tribunal's judgment on professional conduct in exceptional circumstances, and that it was not established that the bank would not have advanced the loans had it known the true position. It argued however that professional misconduct did not require dishonesty and that Mr Shepherd's conduct amounted to recklessness rather than carelessness.
No misdirection
The Lord President, Lord Cullen, sitting with Lady Cosgrove and Lord Reed, said that recklessness in these matters had not been alleged before the tribunal, though it had in others, and the tribunal's findings contradicted any suggestion that Mr Shepherd had knowingly misrepresented the position.
The fact that Mr Shepherd's reports to the bank were inaccurate, he added, was consistent with it having occurred through error, oversight or professional negligence. He concluded:
"This was plainly an area within which it was pre-eminently a matter for the tribunal to determine, with the benefit of their practical knowledge and experience, whether the respondent's conduct did or did not amount to professional misconduct. That depended upon the gravity of the failures and upon consideration of the whole circumstances in which they occurred. We do not accept that there was any misdirection on the part of the tribunal or that they were clearly wrong in the conclusion which they reached."
The court's decision can be read at http://www.scotcourts.gov.uk/opinions/2005CSIH77.html .