The Solicitors Regulation Authority has rejected pleas that it would be an abuse of process to prosecute a solicitor who has already been successfully pursued in the High Court.
Lawyers for Edward Abenson, of Liverpool firm Abensons, had attempted to prevent disciplinary action against him over a conveyancing matter in which judgment was given for a commercial lender in the sum of almost £176,000.
Abensons was found by the court in 2015 to have acted in breach of undertakings and in breach of warranty of authority, as well as acting in breach of trust by releasing monies. The lender was found to have been the victim of a purported fraud after lending £169,000 to a purported client of Abensons, although the judge stressed there was no suggestion Abenson was knowingly involved in the fraud.
An application to appeal the judgment was refused last year.
The SRA has made three allegations against Abenson: failure to comply with an undertaking, inadequate customer due diligence and a failure to report. The regulator found breaches in the first and third of these allegations.
The regulator said Abenson was required to complete the registration of the sole legal charge provided by the purported buyer against the property within seven working days of completion. It was established as a matter of fact that Abenson did not register the sole legal charge against the property, and instead he sought to register a joint legal charge and transfer with the Land Registry 17 days after completion.
Legal Risk LLP, acting for Abenson, stated it would be an abuse of process for the matter to be further considered by the SRA and for any sanction to be imposed, given his firm had already received disciplinary action by the High Court for non-compliance with the undertaking given.
But the SRA insisted that the High Court had been concerned with a different undertaking and, even if the issues were the same, there was no abuse of process or unfairness in prosecuting him.
‘These proceedings were not brought under the court’s inherent supervisory jurisdiction but were an ordinary action for damages for non-performance of an undertaking,’ said the SRA. ‘As such, as the court’s inherent supervisory jurisdiction was not being used, there is no question of disciplinary action having already occurred.’
The SRA added that the court award had been designed to be primarily compensatory and not punitive.
On the failure to report allegation, Legal Risk had stated it was not until the High Court judgment that Abensons knew it had breached the undertaking, as until this time there was a viable argument that it was not in breach.
But the SRA said it was clear from the summer of 2013, when the transaction took place, that Abenson had breached the undertaking to execute the sole legal charge. He was found to be aware from August 2013 of the possibility this was a mortgage fraud and this should have been reported to the SRA.
Abenson was cleared of showing inadequate customer due diligence.
Abenson was fined £2,000 and ordered to pay £1,350 costs.