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Probate solicitor who ‘lost ethical compass’ struck off

£96,000 costs bill for respondent who failed to engage in proceedings

31 January 2017

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A solicitor who paid himself nearly £40,000 for probate services when he knew he could only charge just under £8,000 has been struck off for acting without integrity.

Michael Elsdon charged the estate of Kathleen Lilley, who died in 2008, £39,962.30 despite two High Court orders in 2013 reducing his bill to just £7,922.46.

Elsdon transferred the funds from his client account into his office account in 2012 and is yet to pay the difference back to the estate, according to the Solicitors Disciplinary Tribunal.

The tribunal said the 70-year-old solicitor ‘knew without doubt’ that he was only entitled to charge the estate £7,922.46 and that by failing to take any steps to rectify the position, he had ‘failed to act in the best interests of his client’ and ‘acted without integrity’.

Kathleen Lilley’s will provided that her estate was to be shared equally between her son Arthur and his brother and sister. It named Arthur as co-executor along with Elsdon.

Probate was granted in 2010 and Mrs Lilley’s home, which accounted for most of her estate, was sold in 2011 for £157,000. Payment, however, was delayed.

Elsdon initially sought to bill the estate more than £50,000 and suggested that Arthur had made unauthorised withdrawals from his mother’s account after her death.

The two men subsequently sought to have each other removed as executor and Arthur eventually complained to the Solicitors Regulation Authority.

Elsdon had been operating as a sole practitioner and through an alternative business structure, Sai-Donne, in which his wife was a co-director. He also briefly worked at Woolacott & Co, a firm set up by Mr and Mrs Woolacott, which he bought out in early 2013.

Arthur Lilley’s and other clients’ complaints to the SRA led to an intervention into Sai-Donne, which Elsdon attempted to block in the High Court. But in May 2015, Mr Justice Newey found Elsdon had ‘lost his ethical compass’ and ruled he could not ‘safely be trusted with the administration of estates or other work’. Elsdon’s permission to appeal was refused.

The SRA eventually referred Elsdon to the SDT in September 2015. The solicitor applied for judicial review of that decision, which was refused on the ground that it was ‘totally without merit’. Elsdon has appealed against the refusal and a decision is awaited.

The tribunal found proved 10 of 15 allegations against Elsdon. These included claims relating to the level of fees charged, unpaid disbursements, charging the estate for his own defence costs in respect of the detailed assessment of his costs, unduly withholding client’s money, failure to return client’s money, failure to pay interest, and acting contrary to clients’ instructions.

In relation to one estate, the tribunal accepted that Elsdon entered into ‘unnecessary and obstructive correspondence’ with a beneficiary, the Cats Protection League, which had been left a £10,000 legacy and a further £5,000 to look after the deceased’s cats until they could be re-homed.

More than a year after probate was granted, the charity wrote to Elsdon, saying that – as required by law – it expected statutory interest to be paid on the legacy from the anniversary of the donor’s death. Elsdon called the charity’s request ‘mercenary’ and said it was ‘causing unnecessary costs’. He also said the re-homing of the cats raised ‘complex legal issues’.

However, although Elsdon ‘should have behaved in a more professional manner’, the tribunal said it ‘could not be sure that in behaving in this way the respondent had acted without integrity’.

In another case, Elsdon had sought to charge for work he hadn’t been instructed to undertake and to exercise a lien over a will and deeds of a property. The tribunal found the conduct ‘improper and distasteful’ but said the allegation itself was not proved.

A sixteenth allegation of dishonesty was considered in respect of eight of the 15 previous allegations. The tribunal found dishonesty proved in seven of them.

Elsdon did not attend and was not represented at the hearing. The tribunal considered whether it should adjourn but decided to proceed with sanctions. The respondent, it said, ‘had not played any part or co-operated’ and ‘had failed to substantively engage with the proceedings’. Elsdon was struck off and ordered to pay £96,916.24 in costs.

 

Jean-Yves Gilg is editor in chief at Solicitors Journal

jean-yves.gilg@solicitorsjournal.co.uk | @jeanyvesgilg

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Regulation Regulators Ethics, professionalism and judgement

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SDT Solicitors Disciplinary Tribunal SRA dishonesty integrity