Two solicitors originally fined £15,000 by the Solicitors Disciplinary Tribunal (SDT) for their involvement in operating tax avoidance schemes have been suspended for three years at a new hearing.
Richard Chan and Rajob Ali were partners of Abode Solicitors in Harrogate when the Solicitors Regulation Authority (SRA) closed the firm down in October 2013. The pair then appeared in front of the SDT in September 2014 and were fined for operating stamp duty land tax (SDLT) avoidance schemes in an unprofessional manner.
The SRA appealed the Tribunal’s decision. In September 2015, the Divisional Court agreed that the case should be reheard, stating that the pair had shown a lack of integrity, had acted where there was a conflict of interest and had taken part in transactions that were dubious.
The Solicitors Disciplinary Tribunal had previously heard on 24 September 2014 how Mr Chan and Mr Ali operated various stamp duty land tax avoidance schemes for house buyers. They advised clients on the avoidance scheme through their own separate Seychelles-based business, which took a commission.
The matter was sent back to the SDT on Thursday 21 April 2016, which decided on a three-year suspension (back dated to September 2015), and that Mr Chan and Mr Ali pay further costs of £5,500.
David Middleton, SRA Executive Director, said:
We welcome this new sanction by the Tribunal. Mr Chan and Mr Ali were not acting in their clients’ best interests when involving them in these schemes – they were acting without integrity and their independence had been compromised.
We warned solicitors in 2012 that there was a risk of serious consequences if they did not comply with the professional principles while promoting or facilitating SDLT avoidance schemes. Solicitors need to do the right thing and act with integrity. This new sanction sends out a strong message about how important that is.
At the original hearing in September 2014, the SDT heard that Mr Chan and Mr Ali operated various SDLT schemes, including advising clients on the scheme through their own separate Seychelles-based business, which took a commission. The Tribunal found both liable for:
- Twenty breaches of the Code of Conduct including not informing clients of their arrangements
- Twelve breaches of the Accounts Rules including using the funds of one client to benefit another
- Other matters such as disposing of old client files in a skip
As well as being fined £15,000 each, they were both made liable for costs.
The SRA appealed against the SDT not finding the pair had:
- Failed to act with integrity
- Compromised their independence
- Acted so as to diminish the trust the public would place in them and the provision of legal services
- Been connected with a business (Omega) that was not reputable
The SRA also appealed that the fine of £15,000 was wrong and the sanction was not strong enough.
