Caroline Jones fined over SDLT scheme failures as firm Hillyer McKeown also hit

Caroline Jones and Hillyer McKeown fined for SDLT scheme advice failures and lender non-disclosure

Caroline Jones has been fined after the Solicitors Disciplinary Tribunal (SDT) found multiple regulatory breaches across years of conveyancing work tied to Stamp Duty Land Tax (SDLT) avoidance schemes. Her firm, Hillyer McKeown LLP, was also fined for allowing and failing to prevent the misconduct.

The case, determined on the papers, centred on transactions between 2010 and 2014 in which Jones advised purchaser clients who were entering SDLT schemes referred to as the “U”, “L”, “B” and “S” schemes. The SDT concluded that Jones failed to give adequate risk warnings to those clients, improperly sought to limit liability in retainer documentation in roughly ten matters, and acted where conflicts between purchaser and lender either existed or were a significant risk.

Crucially, the tribunal found lender clients were not told that purchaser clients intended to use SDLT schemes. In the “B scheme” period (June 2010–February 2012), Jones transferred purchase monies to a third party without lender consent while acting for both purchaser and lender—conduct that also triggered accounts-rule contraventions. Additional accounting failures included moving mortgage advances without lender approval and failing to keep separate ledgers for sub-sales, with entire sale/sub-sale structures recorded on a single ledger across several schemes.

Parallel allegations were upheld against the firm. The SDT found Hillyer McKeown caused and/or allowed Jones’s failings, including inadequate client advice on scheme risks, attempts to cap claims or shorten limitation windows, non-disclosure to lenders about scheme use, third-party transfers of purchase funds without lender permission in the “U” and “B” schemes, conflicts between purchaser and lender, and systemic accounts-rule breaches—most notably the absence of separate ledgers for sub-sales and advancing funds without lender consent.

Jones—admitted in 2006, later an associate, salaried partner (from March 2012) and equity partner (from October 2014)—accepted the allegations. The firm, a recognised body during the relevant period (later a licensed body), also admitted the breaches. Both matters were resolved by an agreed outcome.

Assessing sanction, the tribunal called the conduct “moderately serious”. It stressed that both respondents should have been alive to SRA Warning Notices and the care required around marketed SDLT avoidance structures. However, it also recorded important mitigation: neither Jones nor the firm devised or marketed the schemes; the practice had ceased before the SRA investigation; and there was early, full cooperation with admissions.

On that basis, the SDT imposed a £7,000 fine on Caroline Jones and a £10,000 fine on Hillyer McKeown LLP. Each was ordered to pay £15,000 costs. The tribunal said the level of penalty reflected culpability and harm while taking Jones’s means into account.

The judgment underscores the regulatory demands on conveyancers handling complex or tax-driven arrangements. Where a lender is also a client, the duty to disclose material features—like an intention to deploy an avoidance scheme—is non-negotiable. So too are the accounts safeguards: lender consent before advancing money, and proper separate ledgers for sub-sales to prevent confusion and protect client assets.

Conflicts were a persistent theme. Acting for both purchaser and lender in tax-structured transactions carries inherent tension; without explicit, informed management—and often, separate representation—solicitors risk falling foul of the SRA Principles and Code. Attempts to hard-wire liability caps or shortened claim periods into retainers did not save the day; instead, they aggravated concerns about whether clients received clear, fair terms and genuinely informed advice.

For firms, the decision is a reminder that responsibility does not stop at the fee-earner’s desk. Supervision, systems and training around high-risk workstreams are expected to catch and prevent exactly the sort of disclosure, conflict and accounting failures shown here.

Order summary: Caroline Jones fined £7,000 (plus £15,000 costs). Hillyer McKeown LLP fined £10,000 (plus £15,000 costs). The SDT approved the agreed outcome as proportionate to the admitted misconduct.