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Solicitor who made up ‘secret trust’ legacy story struck off

Solicitor took money from estate to cover up for conveyancing error

2 May 2017

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A solicitor who fabricated a ‘secret trust’ story to siphon payment from an estate for his own benefit has been struck off after admitting to dishonesty in an agreed outcome ruling.

David Christopher James Barr withdrew £40,000 from a deceased client’s estate to compensate Mr and Mrs H for an error he made in the conveyancing of their home.

The 66-year-old solicitor instructed his firm’s accounts department to draw up a cheque in favour of the couple, saying in the requisition slip that the payment was a legacy from the estate.

When Barr’s partners questioned him about the transfer, he wrote in a note that the deceased had created a secret trust.

Asked later by an SRA investigator about the transaction, Barr said the recipients were a different Mr and Mrs H. ‘This was a further false explanation. The so-called trust never existed,’ the Solicitors Disciplinary Tribunal said in SRA v Barr.

When confronted further, Barr said he was sorry and could give no rational explanation. ‘It just seemed to happen,’ he told the SRA officer.

Barr also paid £60,000 out of the same estate to his brother, in settlement of a personal liability.

These payments were ‘clear examples of the dishonest appropriation of client money to discharge liabilities’, the tribunal said. Barr’s ‘secret trust’ explanation was untrue and he ‘perpetuated the untruth’ when stating Mr and Mrs H were a different couple.

His conduct had been further aggravated by the creation of a fictitious letter purporting to describe the payment to the couple as a legacy, ‘made to cover up [his] own mistake in relation to the conveyancing matter’.

In a series of further transfers from other estates, Barr funded the purchase of several properties in his own name, which he then resold at a profit.

These actions took place ‘over a lengthy period of time, where client money was used and from which the respondent and others derived personal benefit’.

The fact that Barr had repaid the money, with interest, was a mitigating factor. The tribunal also took account of some personal mitigation. Barr suffered from serious bouts of Still’s disease, a crippling arthritic condition for which he was treated for several years.

The drugs for the condition brought about behavioural changes and Barr was unwell for years. This was compounded by stress, leading him to make ‘catastrophic errors of judgment for which he had sought mental health treatment’.

But Barr ‘had lost sight of what a solicitor can and cannot do’ and his misconduct had been serious.

The tribunal accepted the SRA’s application for costs at £32,659.

Jean-Yves Gilg is editor in chief at Solicitors Journal

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

Categorised in:

Regulation Private client Property Conveyancing Wills, Trusts & Probate

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Solicitors Disciplinary Tribunal SDT client account misuse of funds legacy probate conveyancing error solicitors' accounts rules