A firm and its owner have been jointly fined £12,000 after failing to complete undertakings to another firm on a refinance transaction.

Lancashire practice Gowlings Solicitors Limited and solicitor Richard Seddon agreed to the outcome with the Solicitors Regulation Authority along with an order to pay £5,250 costs.

The Solicitors Disciplinary Tribunal rubber-stamped the outcome having heard the firm and Seddon admit an allegation that they failed to perform undertakings given to national firm Brabners in November 2016.

Brabners had contacted the SRA in relation to a refinance transaction where Gowlings was instructed to secure a better commercial lending facility for its client. Brabners acted for the lender.

Gowlings and Seddon gave 38 undertakings such as disclosure of securities but failed to perform 32 of the clauses in the agreed timescale, with six still outstanding. Delays ranged from two months to almost a year.

The tribunal heard that due to the delays and non-compliance, the lender was left in a vulnerable position and prevented from registering legal charges.

Gowlings and Seddon argued that some of the undertakings were out of their control – for example HM Land Registry taking longer than expected to process applications. They said they regularly chased their client and third parties to complete the undertakings.

The tribunal stressed that an undertaking was binding even if performance is outside a solicitor’s control, and that undertakings were an integral part of legal practice.

 

‘The recipient of an undertaking must be able to rely on it,’ added the tribunal. ‘Undertakings go to the very foundation of many transactions.’

 

* Please note, the firm in question here is not related in any way to the international firm Gowling WLG.