Breach of undertaking: property solicitor fined for “aggravated misconduct”

Breached undertakings

A veteran solicitor was fined and their ability to practice restricted for 18 months by the SDT for failing to fulfil undertakings.

The solicitor, who had been practising for nearly 50 years, was the owner, compliance officer and money laundering officer of a firm.

The firm was instructed in the sale of a property following the death of a client.

The property was registered to the deceased and their three children by a declaration of trust. This resulted in a restriction being registered in the proprietorship register.

The buyer’s solicitors required an undertaking from the seller’s solicitors that Forms RX3 and ST5 would be provided on completion by them to remove the restriction.

A series of emails were exchanged between the two solicitors confirming this.

When the sale completed in October 2021, the seller’s solicitor failed to provide the forms.

The buyer’s solicitors reported the breach of undertaking to the Solicitors Regulation Authority (SRA) in September 2022.

When the seller’s solicitors eventually submitted the forms in November, they failed to fill in the forms properly.

Correctly completed forms were received by the buyer’s solicitor in January 2023 – 15 months after the sale completed.

The delay caused complications including HM Land Registry cancelling the buyer’s application, incurring extra fees and costs.

The solicitor expressed their “regret” for the slow delivery of the forms. They wrote to the SRA’s investigation officer:

“I do not believe that I gave an ‘undertaking’ as such. If I give an undertaking I actually use the word ‘undertaking’.”

In addition to the late delivery of the forms, the solicitor was uncooperative throughout the SRA’s investigation and repeatedly missed deadlines for requested information.

The solicitor did not attend and was not represented at the tribunal.

The SDT findings

The tribunal ruled the solicitor was bound to complete all undertakings relating to the transaction, whether called “undertakings” or otherwise.

This was in accordance with the Code for Completion by Post – which both solicitors agreed to by way of a completed TA13 form.

The SDT highlighted documentary evidence showing the solicitor provided “unequivocal and categoric confirmation” the documentation would be completed.

By failing to comply with the terms of the undertaking, the solicitor breached:

• Paragraph 1.3 of the Code of Conduct for Solicitors: "You perform all undertakings given by you, and do so within an agreed timescale or if no timescale has been agreed then within a reasonable amount of time."
• Principle 2 SRA Principles 2019: “You act in a way that upholds public trust and confidence in the solicitors' profession and in legal services provided by authorised persons.”

The solicitor’s lack of cooperation with the SRA’s investigation was also cited as a breach of Principle 2. This inaction also contravened:

• Paragraph 7.3 of the Code of Conduct for Solicitors: “You cooperate with the SRA, other regulators, ombudsmen, and those bodies with a role overseeing and supervising the delivery of, or investigating concerns in relation to, legal services.”
• Paragraph 7.4 of the Code of Conduct for Solicitors: “You respond promptly to the SRA and:
  • provide full and accurate explanations, information and documents in response to any request or requirement; and
  • ensure that relevant information which is held by you, or by third parties carrying out functions on your behalf which are critical to the delivery of your legal services, is available for inspection by the SRA.”

The SDT decided this “aggravated misconduct” warranted a level four fine of £17,500.

This was the solicitor’s second time before the tribunal, so a restriction order was applied “to protect the public and reputation for the profession from future harm.”

The solicitor was prohibited for 18 months from practising as a sole practitioner, sole manager or sole owner of an authorised or recognised body.

They were banned from working as a freelance solicitor or as a solicitor of an unregulated organisation.

They were also barred from being a head of legal practice/compliance officer for legal practice or a head of finance and administration/compliance officer for finance and administration for 18 months as well.

The solicitor was ordered to pay £5,500 costs.

Your legal and ethical obligations

Failure to fulfil obligations and breaching professional principles have serious implications.

This case highlights the standards that solicitors must abide by and stresses the importance of undertakings in conveyancing.

In Briggs & Another v Law Society v the SRA [2005] EWHC 1830 (Admin), Lord Justice Smith stated:

"Undertakings are the bedrock of our system of conveyancing. The recipient of an undertaking must be able to assume that once given it will be scrupulously performed. […] The breach of an undertaking given by a solicitor damages public confidence in the profession and in the system of undertakings upon which property transactions depend."

An undertaking is binding, even if it is to do something outside your control.

You should carefully consider whether you will be able to implement an undertaking before giving it, with regard to all eventualities that might affect your ability to perform the undertaking.

It’s a common misconception that only statements labelled as “undertakings” have serious consequences if breached.

In reality, any clear and binding assurance may be treated as an undertaking, regardless of the wording used.

The SRA investigates matters of alleged misconduct in the solicitors profession. It has the power to impose fines, issue warnings and restrict work.

The SRA can also refer cases to the SDT, which has unlimited powers to fine, suspend or strike off solicitors who breach regulations.

Mitigating your risks

As a member of the Law Society, you are part of a community of over 200,000 solicitors with access to a range of benefits to support you.

This includes practical resources and world-class learning to help you mitigate your risks, develop your career and plan for the future.

See our:

• practice note on professional undertakings
• Q&A on professional undertakings for in-house solicitors in-house

We’re also here to support solicitors in recognising and handling difficult professional situations.

Discover our support for solicitors on ethical issues.