Solicitor misadvised 115 clients on ground rent clauses, faces £28k penalty and costs
A solicitor who gave faulty advice to more than a hundred clients about the ground rent terms in their property leases has been fined £15,000 after a professional tribunal branded his misconduct “very serious.”
The Solicitors Disciplinary Tribunal (SDT) heard that David Carter Hughes, a solicitor at Bannister Preston Solicitors LLP, repeatedly misinformed buyers of leasehold homes between November 2008 and December 2014. In at least 115 cases, he wrongly told clients that their ground rent would double every 25 years when, in reality, the clauses allowed increases every 10 years.
The errors only came to light in 2019, when a client — referred to as Client K — complained to the Solicitors Regulation Authority (SRA). That client had purchased a Taylor Wimpey leasehold property in 2014 and later discovered that the firm’s advice had been incorrect.
According to tribunal documents, Hughes relied on a standard precedent report used for thousands of Taylor Wimpey conveyancing transactions. However, the precedent had not been updated to reflect changes in rent review provisions. As a result, the misinformation was repeated across numerous conveyancing matters for years.
The SRA launched an investigation after Client K’s complaint, which revealed the scale of the issue. Bannister Preston subsequently stopped using precedent reports to avoid similar mistakes.
Embed from Getty ImagesThe tribunal found Hughes personally culpable. At the time of the misconduct, he had direct conduct of all affected cases. He had been five years qualified when the pattern began and 12 years qualified when it ended, with the tribunal stressing that such experience came with heightened professional responsibilities.
In its judgment, the panel noted that Hughes had not acted intentionally but had placed too much reliance on bulk processing of conveyancing matters. His lack of attention to detail, it said, caused significant harm. The tribunal heard that clients endured litigation, stress, and unnecessary expense due to his erroneous advice. Claims had been lodged with insurers and the Solicitors Compensation Fund, damaging the wider reputation of the profession.
Aggravating factors included the prolonged nature of the misconduct and Hughes’s failure to identify obvious risks. However, the tribunal also acknowledged mitigating circumstances. Hughes made frank admissions, cooperated fully with the firm’s internal probe and with the SRA, and demonstrated genuine insight into his mistakes.
Weighing these elements, the SDT determined that the misconduct fell into the category of “very serious” but not deliberate dishonesty. Under its sanctions guidance, such conduct justified a Level 3 fine. The tribunal approved the jointly proposed £15,000 penalty.
In addition to the fine, Hughes was ordered to pay £13,350 in costs, including £10,000 plus VAT claimed by Capsticks LLP on behalf of the SRA. The tribunal commented that the figure seemed high given Hughes’s full admissions, but since he had agreed to the amount, it allowed the costs order to stand.
The total financial penalty imposed amounts to £28,350. The tribunal ordered that the fine be forfeit to the Crown.
The case highlights ongoing scrutiny of leasehold sales and professional standards within conveyancing practices. For the 115 clients affected, civil claims remain ongoing in parallel proceedings.
The judgment, delivered on 18 August 2022, ensures Hughes retains his practising certificate but leaves him with a significant mark against his professional record.