The High Court has told the Solicitors Disciplinary Tribunal to look again at the sanctions it imposed on two solicitors involved in stamp duty avoidance schemes.

Richard Chan and Rajob Ali were both spared the punishment of a strike-off and instead each fined £15,000 by the SDT last October.

Their Harrogate firm had already been shut down by the Solicitors Regulation Authority and the regulator had asked the tribunal to ban them from practising.

But the SDT declined to impose that penalty after finding the cases for acting with a lack of integrity and with a lack of independence were not proven.

The SRA appealed that decision in the High Court, and Lord Justice Davis today agreed the matter should return to the SDT for a re-determination.

Davis said Chan and Ali ‘knew full well what they were doing’ and that the interests of clients had been ‘subordinated’ to the financial interests of the solicitors.

‘The purchaser clients were (as found by the tribunal) never properly advised as to the aggressive nature of the various schemes or as to the risk of successful challenge by [HM Revenue & Customs],’ said the judge.

‘The obvious inference is that purchaser clients and lender clients were not informed because the respondents did not wish to deter them from entering into the arrangement.’

Abode Solicitors completed 556 conveyancing transactions involving stamp duty schemes between 2009 and 2012, with the two solicitors receiving almost £1m in referral fees and commissions.

They introduced clients to four different types of schemes designed to avoid or mitigate the impact of stamp duty land tax without informing them about the risky nature of the schemes or of their own personal opportunity to gain commissions.

The SDT found Chan and Ali had acted ‘without a proper understanding’ of the schemes of their duties to clients, which largely explained their misconduct.

Davis said this position was ‘not sustainable’ based on the primary facts and it would be ‘lamentable’ to adjudge otherwise.

Even if they had no understanding of the schemes, the judge added, ‘one wonders how such persons are then to be considered fit to be solicitors at all’.

Davis also criticised the ‘unacceptable’ drafting of charges brought against Chan and Ali, which were ‘for the most part unduly and unnecessarily convoluted and prolix’.

He added: ‘They create a real risk that a tribunal will lose sight of the larger picture and will treat the more and less significant points alike.’