Edward Sibley accused of exploiting client funds in secret loans and personal cash grabs

SDT told Edward Sibley used client accounts as loan pools for firm, self and other clients

The Solicitors Disciplinary Tribunal sat between 10 and 19 October 2018 to examine a sprawling catalogue of allegations against Edward Sibley, who represented himself throughout the proceedings. The panel, chaired by Mrs J. Martineau with Mrs C. Evans and Mr M. Palayiwa, heard claims that Sibley turned client accounts into a private lending pool—funding his firm, his own borrowing and other clients—with sums totalling more than £165,000.

The Solicitors Regulation Authority alleged that between 2014 and 2015, Sibley orchestrated a series of loans from Client PW’s estate funds, which he had collected into his firm’s client account. Records showed the firm had held over £435,000 for PW by late 2013. Instead of keeping those monies secure, Sibley arranged loans to the firm, to himself personally, and to two other clients, without ensuring that PW received independent legal advice.

Investigators said Sibley used a power of attorney, granted in February 2014, to execute loans without PW’s direct involvement. One loan facility drafted by Sibley on 14 February 2014 gave the firm access to £50,000. A further £20,000 went into the firm’s office account in October 2015. In total, about £75,000 of PW’s money was funnelled to the practice.

Sibley also arranged a personal loan of £40,000 for himself, taken directly from PW’s assets in April 2015, after the power of attorney had expired. The Tribunal ruled this could not be shielded under attorney powers and represented a direct conflict of interest.

Alongside these, Sibley channelled about £51,000 of PW’s funds to two other clients, GB and AM, again without legal advice or proper authorisation. One borrower, AM, later told the Tribunal she had thought the loan came from Sibley personally, not from another client.

The combined value of loan facilities reached £200,000, with about £165,993.52 actually borrowed. PW later insisted she had never agreed to loans exceeding £100,000 in total and said she had not authorised the final £20,000 transfer to the firm. When repayment faltered, she issued statutory demands and even began winding-up proceedings against Sibley’s firm.

In defending himself, Sibley claimed the loans were commercial arrangements, carried out under his role as attorney, not as solicitor. He argued PW trusted him fully, had received financial advice from an independent adviser, and enjoyed a lucrative 10% interest rate on the loans. He insisted she was aware of the arrangements and later “cured” any procedural defects by ratifying his actions. He also argued that repayments and interest had been made for years, undermining any suggestion of misappropriation.

The Tribunal rejected these defences. It ruled that Sibley’s solicitor role could not be divorced from his attorney role, especially given the risks of conflict of interest. It found he failed to protect PW’s money, failed to ensure independent legal advice, and had subordinated her interests to those of himself, his firm and other clients.

Further allegations painted an even bleaker picture. From 2015 to 2017, Sibley was accused of:

• Taking excess sums from client accounts into office account without justification;
  
• Giving incorrect advice to another client about executor rights in a will dispute;
  
• Concealing serious financial difficulties from the SRA;
  
• Failing to notify regulators of bankruptcy proceedings against him;
  
• Continuing to practise through Sibley Strategic Services Limited without authorisation;
  
• Misleading clients by not disclosing that he would no longer act as a solicitor;
  
• Ignoring production notices from the SRA;
  
• Relying on a false witness statement in court.
  

The Tribunal also heard Sibley had failed to comply with a Legal Ombudsman order requiring him to pay £22,000 to a former client. He made three instalments, but £8,250 remained unpaid by the time his firm collapsed. His claim that silence amounted to consent to instalments was dismissed as untenable.

Across the allegations, dishonesty was pleaded in relation to the loans to the firm, the personal loan, excess transfers from client to office account, and his failure to inform clients of his intention to practise outside SRA regulation.

The Tribunal concluded that Sibley’s conduct amounted to repeated breaches of the SRA Principles, including Principles 2 (integrity), 4 (best interests of each client), 6 (public trust), 7 (regulatory compliance) and 10 (protection of client money). It said his actions “undermined public confidence” and demonstrated clear failures of professional ethics.