A former consultant at London firm Howard Kennedy has been fined for lending money to long-standing clients for whom he then acted.

According to a Solicitors Regulation Authority notice, Allan Hudson loaned £30,000 to a couple, referred to as Mr and Mrs B, with no written agreement for the loan. It was understood the money would be repaid when the couple re-mortgaged their home.

Hudson, who worked for Howard Kennedy from April 2012 to September 2014, was then asked to act for the couple’s parents in the sale of their property and took instructions from Mrs B on the transaction. The sellers were to pay a lump sum from the proceeds of the sale to lease an annexe from Mr and Mrs B.

Before completion of the sale, Hudson asked Mrs B if his loan could be repaid from the premium being paid for the grant of the lease. This was agreed and Mrs B provided Hudson with a letter of authority signed by her mother.

The SRA notice said Hudson did not verify the authority with either of the two sellers. It now appears that the mother did not fully understand the purpose of the letter of authority when she signed it and she has difficulty remembering what happened at the time.

Hudson did advise Mrs B that her parents should seek legal advice in relation to the grant of the lease, but did not communicate this directly to them. The sellers did not seek independent legal advice.

Hudson, a solicitor since 1979, admitted to acting where he stood to financially benefit from the proceeds of a transaction, and where the interests of two clients conflicted or could conflict. He did not take sufficient steps to ensure the sellers consented to the use of their money to repay the loan, and he failed to ensure Mrs B had authority to provide instructions.

In mitigation, Hudson, who is not currently practising, said Mrs B was a long-standing client and he trusted her enough personally to lend her £30,000. He did not consider the parents were vulnerable clients because he trusted Mrs B was safeguarding their interests.

The SRA rebuked Hudson and fined him £1,500. He was also ordered to pay £300 costs.