The High Court in the case of Solicitors Regulation Authority v Richard Ali Chan and Abode Solicitors Limited has ordered the Solicitors Disciplinary Tribunal to look again at their decision not to strike off two solicitors who had advised on and promoted Stamp Duty avoidance schemes as part of conveyances carried out by their firm. Abode Solicitors, between 2009 and 2012, received almost £1m in fees and commissions from the transactions it was reported.
The High Court found that clients of the firm were not properly advised as to the risky and aggressive nature of the four schemes being promoted and it stated that an obvious inference could be drawn that the clients were not informed since to do so would have led to clients not proceeding with the schemes.
Lord Justice Davis stated that the solicitors knew what they were doing in subordinating the clients’ interests to their own financial interests and, further, disagreed with the original finding of the Solicitors Disciplinary Tribunal that it was the solicitors’ lack of understanding as to the operation of the schemes which had led to the misconduct. Lord Justice Davis stated that this findings was unsustainable but that even if it had been, it caused one to wonder “how such persons are then to be considered fit to be solicitors at all”.
This case is yet another example clients entering into schemes which HMRC subsequently challenge with potentially ruinous consequences for those taxpayers concerned. This case highlights the need for an objective review of the risks associated with such schemes whenever they are offered.
