Decision - Agreement
Outcome: Regulatory settlement agreement
Outcome date: 29 November 2021
Published date: 6 December 2021
Firm or organisation at time of matters giving rise to outcome
Name: Hudson & Taylor
Address(es): 19 Church Lane, Rochdale, OL16 1NS
Firm ID: 51544
This outcome was reached by agreement.
1. Agreed outcome
1.1 Peter Richard Miller, a retired solicitor, agrees to the following outcome to the investigation of his conduct by the Solicitors Regulation Authority (SRA):
- (a) he is fined £2,000, (b) to the publication of this agreement, and (c) he will pay the costs of the investigation of £600.
2. Summary of Facts
2.1 In 2007, Mr A purchased a property that was being run as a bed and breakfast business (the business). At the same time, Mr and Mrs B purchased: (i) the business for £70,000 from Mr A and (ii) the fixtures and fittings directly from the seller. Mr and Mrs B signed a lease with Mr A whereby they were to run the business, live at the property and pay yearly rent. Mr and Mrs B sold their own property, and the proceeds of that sale went to Mr A to cover the original £70,000 and the yearly rental payments.
2.2 In 2016, whilst a partner at Hudson & Taylor (SRA Number 51544), Mr Miller acted for Mr A in the sale of the property, which included the business and the fixtures and fittings.
2.3 During negotiations for the sale, the buyer offered to purchase the property and the business separately, but Mr Miller did not relay this offer to Mrs and Mrs B. Instead, he suggested that the property and the business be sold at the same time for a global sum (to include £20,000 for the fixtures and fittings) with no apportionment made between the property and the business. Mr and Mrs B were to be paid for the business and fixtures and fittings from Mr A, but how much they were to receive was not confirmed at any time before the sale.
2.4 At the request of the buyer, and to facilitate the sale, Mr Miller prepared a Deed of Surrender for Mr and Mrs B to sign. Mr Miller told Mr and Mrs B to obtain separate advice on this, whereas Mr and Mrs B had understood that Mr Miller was acting for them. Mr and Mrs B signed the Deed of Surrender foregoing any rights they had under the lease and agreeing to the sale with vacant possession.
2.5 The sale took place without Mr and Mrs B: (i) knowing how much they would receive for the sale of the business, and (ii) having any written guarantee that they would receive the £20,000 paid to Mr A for fixtures and fittings.
2.6 After the sale, Mr and Mrs B received a payment of £35,000 from Mr A, which included the £20,000 he had been paid for the fixtures and fittings.
2.7 Mr Miller has since retired from practice and no longer holds a practising certificate.
3.1 Mr Miller makes the following admissions which the SRA accepts:
- By dealing with the sale of the property, the business and fixtures and fittings he was acting for both Mr A and Mr and Mrs B. In doing so, he acted where there was a conflict of interests or a significant risk of a conflict of interests between them and therefore failed to achieve Outcome 3.5 of the SRA Code of Conduct 2011.
- By not telling Mr and Mrs B that the buyer was willing to purchase the business separately and by failing to provide substantive advice on their rights under the lease, he failed to treat them fairly, failed to ensure that they were able to make informed choices and failed to act in their best interests. He therefore failed to achieve Outcomes 1.1 and 1.12 of the SRA Code of Conduct 2011 and breached Principle 4 of the 2011 SRA Principles.
4. Why a fine is an appropriate outcome
4.1 The SRA’s Enforcement Strategy sets out its approach to the use of its enforcement powers where there has been a failure to meet its standards or requirements.
4.2 When considering the appropriate sanctions and controls in this matter, the SRA has taken into account the admissions made by Mr Miller and the following mitigation which he has put forward:
- Mr Miller has a clear regulatory history
- Mr Miller has co-operated with the SRA investigation
- Mr Miller has retired, no longer holds a practising certificate and intends to remove himself from the roll.
4.3 The SRA considers that a fine is the appropriate outcome because of the following:
- There has been a serious breach of our standards. Mr Miller’s conduct has led to Mr and Mrs B’s interests not being protected in a situation that he could and should have anticipated.
- Mr Miller was an experienced solicitor. He was a partner at Hudson & Taylor at the time and had been practising for many years. He was directly responsible for his actions. He should have adequately assessed the potential for conflict here and taken steps to inform the clients of the conflict and should have considered whether it was appropriate for him to act, in accordance with the relevant Code of Conduct at the time.
- There was the potential for a significant impact on Mr and Mrs B. Had Mr and Mrs B been separately represented, and their interests independently protected, then they may have given alternative instructions. Similarly, had they known of the offer from the buyer to purchase the business separately, or had they fully understood their rights under the lease, then they may have given alternative instructions leading to a different outcome.
4.4 A fine is appropriate to uphold public confidence in the solicitors' profession and in legal services provided by authorised persons because it provides a credible deterrent and a warning to others in the profession. A financial penalty therefore meets the requirements of rule 4.1 of the Regulatory and Disciplinary Procedure Rules.
5. Amount of the fine
5.1 The amount of the fine has been calculated in line with The SRA's approach to financial penalties (the Guidance).
5.2 Considering the Guidance, the SRA and Mr Miller agree that the nature of the misconduct was low or medium because the conduct was not intentional and Mr Miller has co-operated with the investigation throughout. The Guidance gives this type of misconduct a score of one.
5.3 The SRA considers that the impact of the misconduct was medium because of the potential impact on Mr and Mrs B. The Guidance gives this level of impact a score of four.
5.4 The nature and impact scores add up to five. The Guidance indicates a broad penalty bracket of £1,000 to £5,000 is appropriate.
5.5 In deciding the level of fine within this bracket, the SRA recognises the seriousness of the misconduct and the potential impact on Mr and Mrs B. However, this has been balanced against the mitigation at paragraph 4.2 above and to reflect that the fine should be of an amount to deter future misconduct by others who may engage in similar conduct. The SRA considers a fine of £2,000 to be appropriate.
6.1 The SRA considers it appropriate that this agreement is published in the interests of transparency in the regulatory and disciplinary process. Mr Miller agrees to the publication of this agreement.
7. Acting in a way which is inconsistent with this agreement
7.1 Mr Miller agrees that he will not deny the admissions made in this agreement or act in any way which is inconsistent with it.
7.2 If Mr Miller denies the admissions or acts in a way which is inconsistent with this agreement, the conduct which is subject to this agreement may be considered further by the SRA. That may result in a disciplinary outcome or a referral to the Solicitors Disciplinary Tribunal on the original facts and allegations.
7.3 Denying the admissions made or acting in a way which is inconsistent with this agreement may also constitute a separate breach of principles 2 and 5 of the Principles and paragraph 7.3 of the Code of Conduct for Solicitors, RELs and RFLs.
8.1 Mr Miller agrees to pay the costs of the SRA's investigation in the sum of £600. Such costs are due within 28 days of a statement of costs due being issued by the SRA.