When a transaction on the purchase of a property is obstructed in some regard, clients are often tempted to place the blame on their lawyer. After further investigation however, it often comes to light that this blame is misplaced.
For a large number of resolved conveyancing cases, no remedy has subsequently been awarded to the client, indicating a lack of evidence that the legal services provided were below par.
Clients may have high expectations in regards to their property transaction being unrealistically smooth. Hence when a problem arises, they react prematurely and are quick to make a complaint. Instead, clients should be made aware that any concerns they have in relation to the transaction should be voiced to their lawyer. Although being the expert in the professional relationship, lawyers are unable to make an enquiry about a potential problem if they are unaware such a problem may exist.
Despite solicitors having responsibility in making sure transactions are processed successfully, this should not lessen the diligence of clients in overseeing Land Registry plans, search criteria, as well as checking paperwork. Even if a task is delegated to the solicitor and problems arise, the responsibility may still lie with the consumer in following up any requests that are made, for example.
This issue in particular was brought to light in a recent tribunal decision regarding the late filing of a land transaction return. It was held that where a customer receives a penalty from the taxman, the solicitor cannot be blamed for failing to send the SDLT1 within the time limit.
The £200 flat rate penalty for a late submission return was appealed by Andrew Oliver. The stamp duty (SDLT) was required within a 30-day period subsequent to a lease being extended on a residential property. It was however, received 252 days later by HM Revenue & Customs (HMRC); 222 days late.
When apologising for the return’s late submission, Mr Oliver stated he was verbally advised by the freeholder’s solicitor that they would complete the return. It later became clear that the solicitor wished for him to complete the return, at which point he sent it to HMRC.
Although initially expressing sympathy for the claimant, the tribunal judge Dr K Khan stated: “The primary responsibility for the submission of the form was with the appellant, who had accepted that the form was filed late. He cannot rely on the inaction of the freeholder’s solicitors to defeat the purpose of the legislation and to provide a reasonable excuse.”
Due to parties being obliged to filed such returns regardless of tax, the lack of tax due on Mr Oliver’s transaction was irrelevant. The penalty itself was set down in statute.
The judge went on to say that although the use of legal conveyancers or solicitors was common in this type of transaction, it is the claimant’s responsibility to alert HMRC and to then pay any tax which is due. Even if the responsibility has been delegated to a solicitor on the client’s behalf, this does not give them a reasonable excuse.
He went on to highlight the responsibility of the taxpayer: “It is unfortunate that the solicitors did not provide the forms within the requisite time to HMRC, but this is not an excuse available to the taxpayer. There is no explanation for the delay nor was any evidence that the taxpayer chased the progress of the SDLT 1 form with the solicitors to ensure it was submitted on time.”
Solicitors may not always avoid liability, for example where a flat is not registered to the purchaser due to failure to pay SDLT or Land Registry fees. In a recent case covered by Today’s Conveyancer here, solicitor Dalida Jhugroo had been in control over a client’s finances and was subsequently struck off following the “serious” harm caused.
