A solicitor who deployed funds from a deceased client’s estate to give unauthorised loans on property transactions has been struck off the roll.
The Solicitors Disciplinary Tribunal found sole practitioner John Killington, of Watford firm Brown & Emery, dishonestly made the unsecured loans totalling £370,000 to avoid a negligence claim from the property clients. In doing so he deprived six legacy charities of funds for almost a year.
Killington, a solicitor of over 35 years, must also pay almost £34,000 in costs.
Killington’s misconduct came to light after a complaint to the SRA from a solicitor at animal charity PDSA, one of the beneficiaries. The charity said Killington had failed to sell Tesco shares, which were included in the estate, when he was supposed to do so, and their value had since fallen by 50%. He also sold the estate property at undervalue for £485,000 in February 2014, when just 10 months later it was sold on for more than £770,000.
The regulator began an investigation in August 2016. It found that the client, who died in October 2013, left an estate worth more than £1.8m, including £1.35m in Tesco shares.
Client ledgers showed six-figure sums in February and March 2014 were paid out of the estate to complete property transactions for two other clients. Killington said he believed he acted in the best interests of the estate and thought he was allowed to lend the funds on a short-term basis.
He did not disclose the loans to the charities standing to benefit from the estate funds. A legacy administration manager at the RSPCA, another proposed beneficiary, confirmed she would have been ‘horrified’ to learn that any legacy was being manipulated.
The tribunal heard that Killington’s actions meant he delayed distributing funds to beneficiaries because he could not immediately pay the money, despite multiple attempts by the charities to find out what was going on. Only when loans were repaid in December 2014 did charities start receiving payments.
Killington accepted some delay had occurred but blamed this on the sudden death of his business partner and his own poor health. The tribunal said it was unacceptable to wait so long to distribute funds from the house sale, particularly given what he did during that period. It was also found that Killington continued to act as executor of the estate even when aware he may be facing a claim for negligence, and he should have reported the matter to the firm’s insurers.
Killington, who did not appear before the tribunal, made limited mitigation, making reference to the complexity of the property transactions and his own health issues. He apologised for his actions and said he took full responsibility.
'His motivation for the misconduct was to protect himself from negligence claims and conceal his own actions,’ said the tribunal. 'His conduct had caused immense harm as the charitable beneficiaries did not receive the benefit of their legacies as quickly as they should have done.’