Solicitor with 'clouded judgment' over property developer fined £45,000

A solicitor who ‘blinded himself to the obvious risk of conflict’ when acting for both buyers and sellers in a property scheme has been fined £45,000 by the Solicitors Disciplinary Tribunal. 

Richard Longton, admitted in 1999, worked at Metis LLP and then Metis Law Ltd as head of commercial property. The firm acted for property developer Woodhouse and his companies in the sale of 540 units. The firm also acted for Northern Powerhouse Developments, a separate group of companies established by Woodhouse, in 14 acquisitions, five of which failed to complete.

The tribunal judgment said ‘extensive adverse media coverage’ of Northern Powerhouse Developments ‘raised the concern that it raised millions of pounds in investor funds for numerous investment projects, but many…were never completed.’ The company was the subject of an investigation by the Serious Fraud Office. 

According to the judgment, the Solicitors Regulation Authority received a self-report from Longton in 2019. Longton admitted that while in practise at Metis LLP and then Metis Law Ltd, and when acting on behalf of property developer Gavin Woodhouse and his associated companies, he acted for both buyers and sellers on a property development scheme, risking a conflict of interest and in breach of principles 6 and 8 of the SRA Principles 2011, and failed to achieve outcome 3.5 of the SRA Code of Conduct 2011.

The tribunal found that Longton had also been in breach of principle 2, by failing to act in a way that upholds public trust and confidence in the profession. He was also found, on the balance of probabilities, to have provided banking facilities through a client account between July 2016 and June 2019 when he allowed payments into, and transfers and withdrawals from, a client account contrary to rule 14.5 of the Solicitors Accounts Rules 2011, and Principles 6 and 8 of the SRA Principles 2011.

The 46-page judgment concludes: 'This had not been normal or straightforward conveyancing transactions and the risks for the buyers were significant.’ The ‘unusual nature’ of the transactions meant ‘essentially, the buyer was at risk of losing 100 per cent of the deposit if the transaction did not complete'.

The tribunal added: 'The significant risk of conflict of interest materialised into an actual conflict of interest in at least two cases, Client F and Client G.'

The judgment acknowledged Longton’s 22-year unblemished career and the fact he had self-reported and cooperated fully with the regulator's investigation.

It found Longton’s motivation was ‘the financial advancement of the firm by having and holding on to a client of Mr Woodhouse’s stature’. It said: ‘This objective clouded his judgment and lead him into error. He blinded himself to the obvious risk of conflict which later became manifest as actual risk.

‘In allowing the risk of conflict to occur Mr Longton departed from normal practice and he breached the trust placed in him by his buyer clients who had expected and trusted him to safeguard their interests, exclusively.'

In deciding to fine Longton, the tribunal said that a reprimand ‘would not be sufficient to mark the seriousness of the conduct in this case’ but after hearing ‘Longton’s account, the efforts he made to mitigate the financial loss to his buyer clients, his partial admissions and his subsequent good conduct’ it found suspension or strike off was not required.

Longton was fined £45,000 and ordered to pay costs of £29,602.35. He was also made subject to conditions in that he may not act as a compliance officer for finance and administration for any authorised body.