Rent advice blunder exposes the risk of relying on standard documents

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A solicitor has been fined £15,000 by the Solicitors Disciplinary Tribunal (SDT) for giving incorrect advice regarding ground rent to more than 100 clients, demonstrating a risk for professional firms where they rely on standard document templates when providing information to clients.

Bannister Preston wrote a report on “title” for properties being sold by the national developer Taylor Wimpey.  When the report was written, Taylor Wimpey had instituted ground rent so it would double every 25 years, but in 2008 this changed to doubling every ten years for some properties.

However, when the fined firm had written the report, they had re-used the same template and had not updated the information in the report to include the new ground rent charges. As a result, incorrect advice was given to 115 clients over a period of six years, only coming to light when one of the clients complained about the matter.

The solicitor in charge of writing the reports admitted the mistake and was subsequently fined £15,000, with a further order to pay £11,350 in costs.  The total loss to the clients is currently unknown as civil proceedings are still underway.  There are also further claims cascading to both the insurers and the Solicitors Compensation Fund.

In mitigation, the solicitor told the SDT: “I admit that there was a failure of the systems and controls during this time that led to a number of clients being incorrectly advised. I have since put in place comprehensive procedures and processes to ensure that this will not happen again.”

Harry Bush of Brunel Professions said: “At a time where businesses are trying to be as cost effective as possible, working to templates and precedents presents an opportunity to work through a large proportion of work in a much smaller period of time.

However, like all things, this is not without its risks and professionals should be mindful in their protocols and procedures when using both templates and precedents. Without the proper controls in place to check and re-check pre-populated documents, there is a real peril that these documents will be provided to clients with wrong and negligent information.

As ever, the more templates given to more parties, the higher the likelihood of a precedent being incorrectly used and causing a loss.”

The judgement has been published on the Solicitors Disciplinary Tribunal website.  Reports about the case have been published by Legal Futures and Law Society Gazette.

ProfessionalIndemnity.com is owned by Brunel Professions, which is a leading professional indemnity insurance broker in the UK.  Click here to get a quote or call 0345 450 1074 to speak to a broker.

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