An experienced solicitor has been fined after lending a desperate client money and then making almost £50,000 in interest from the arrangement. 

Richard Barca, admitted in 1986 and a member of London firm Wilson Barca, lent the client £27,000 to stave off her mortgage lender. He charged an annual interest rate of 60%, the Solicitors Disciplinary Tribunal heard.  The SRA alleged that Barca took unfair advantage of the client, after being instructed to advise her on a suspended possession order on her home brought by Santander. 

Having secured agreement from Santander to extend the time limit for payment, Barca agreed to lend her the money to go towards the outstanding arrears on her property and debts owed to another party.  The loan was evidenced in a mortgage deed as being between the client and a company called Safechase, of which Barca was the sole director and shareholder. 

Although advised to take independent legal advice, the client did not do so and Barca did not ensure she had, said the SRA. m The regulator said the monies came from Barca’s own resources and not from Safechase, and he had raised the funds by remortgaging his own home.  

After she failed to make payments, Safechase repossessed the client’s property in December 2012. Safechase ultimately sold the property for £235,000, with the company receiving more than £76,000 (including almost £50,000 in interest, which had accrued at £44.38 a day). 

Barca admitted acting in an own interest conflict. He was found to have failed to act with integrity and to have allowed his independence to be compromised. 

Barca also admitted a charge of making a misleading claim in a witness statement in litigation related to the loan, where he had stated he did not act for the client in any capacity at the time. He submitted to the tribunal this was an honest mistake based on a misunderstanding about dates. 

In mitigation, Barca explained the client had been a childminder whose home was essential for her income. She faced losing everything if she did not pay outstanding arrears to her mortgage lender and her position was ‘hopeless’.  

She had asked him to provide a loan and initially he refused, but she continued to ‘plague’ Barca to lend her money and stated she had nowhere else to turn. 

He told the tribunal the client was aware of what had happened throughout and his mistake was failing to ensure she received independent legal advice, even though he had advised this. He had never loaned money to a client before, and intended for it to last no more than three months – hence the interest rate on a par with a short-term lender. 

He had tried to help her, but it was to no avail and bankruptcy proceedings were necessary. Even then, Barca had ensured her property was sold for a proper price and he enabled her to stay as a tenant. Given she had total debts of more than £1m, he submitted the loan had no material impact on her finances. 

The tribunal concluded Barca should not have made the loan but that his misconduct was not planned. He acted in breach of a position of trust and was a very experienced solicitor whose culpability was high. 

‘[The client] had been a vulnerable client whose professional life and associated livelihood was in jeopardy when she consulted [Barca] as she was at risk of losing her home. [He] should have known better than to offer a loan to her in such an emotionally heightened and charged environment, without insisting that she took independent legal advice.’ 

Barca was fined £20,000 and ordered to pay £26,000 in costs.