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UK-Justice
UK-Justice, Barrister
Category: Law
Satisfied Customers: 16193
Experience:  Called to the Bar in 2007
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A barrister was instructed via a firm of lawyers to advise

Customer Question

A barrister was instructed via a firm of lawyers to advise on our serious and high value (10m) claim against a bank. We had moved lawyers and had made a complaint against the previous lawyer because he mis advised in certain areas of the claim, allowed time limitations to pass and did not identify all defendants correctly. The claim itself was in progress awaiting a CMC. The newly instructed lawyers provided a full bundle to counsel and a meeting was agreed. My wife was unable to attend but I was present as were a partner and solicitor from the instructed law firm. Literally as the meeting was about to begin (I had flown from Spain especially for the meeting) the barrister said he had to inform me of a potential conflict of interest (he made no reference to this before and saw the papers a week prior to the meeting). The potential conflict was not with the bank we were suing but the fact he had acted, in court, a year or so before for the previous lawyer who he knew we had made a serious complaint about and moved away from for prejudicing our claim. Neither the barrister nor the instructed lawyers present made any attempt to stop the meeting to discuss this with me or suggest we should call my wife who was in Spain. The previous lawyer was based in Gibraltar (where they can act as lawyers and barrister, he was a barrister too) which is only relevant as it is a very small community and any connection to it would have immediately made my wife and I seek other counsel if you knew more about the claim itself. The conference went ahead as a fait a complit and although the advice was totally at odds with all other advice we had during the previous 4 years, that is not our complaint. Had we known the barrister had such a close connection to the Gibraltar barrister/lawyer we would have simply chosen someone else, there were many others with the expertise needed to advise. Counsel said we had a negligence case against the gibraltar barrister anyway irrespective of the claim against the bank but he was not sure if he could act. He mentioned this 2/3 timesmore in the meeting so in essence if we did sue the gib barrister, how could we use current counsel, we would have pay for new advie whatever. I feel that counsel acted improperly in not notifying us of a potential conflict much earlier (it would have been obvious who the players were from a brief read through) and the lawyers present acted improperly by allowing the con to continue. We could not possibly use that counsel and would have chosen differently had we had the time and information and I do not think it is reasonable for me to know what I should do in such a pressured situation, presented with this information in a fait a complit and with no suggestion to halt and discuss. I believe the fact counsel felt a need to raise it at all, shows he felt it could be a problem and yet I had no opportunity to consider it and my wife of course was not present and relying on the instructed solicitors to act in her best interests so did not find out until after the con. We simply want our money back to pay for the new advice we have now taken (which btw falls much more in line with previous advice in terms of our claim). I know conflict of interest can be many things but in fact there does not need to be an actual conflict(counsel felt it right to mention something though) and there are any number of reasons other than actual conlfict that could make a client not want to use a particular person.
Submitted: 3 years ago.
Category: Law
Expert:  UK-Justice replied 3 years ago.
Thanks for your question, I will do whatever I can to help you. Please remember to rate my answer SMILEY FACE OR ABOVE.

Have you complained to the Bar Council at all?
Customer: replied 3 years ago.

We have followed the lawyers normal complaint procedure. When we received their answer, so we knew which way they would fall, protect the barrister and/or themselves (they protected both) we today complained to the chambers and their internal system is in place. We have sent a response to the lawyers saying we do not accept their position and we can take it up with the ombudsman now I suppose. The Ombudsman wont do anything of course until after the internal processes are complete. I do not know about the Bar council. In my view both counsel AND the lawyers acted incorrectly as even if the lawyers only found at the same time I did they did nothing about it and allowed the con to continue.

Expert:  UK-Justice replied 3 years ago.
Yes you need to follow the Chambers internal procedure and then consider complaining to the Bar Council.

They regulate Barristers and can bring disciplinary proceedings if appropriate.

They can be found at;

https://www.barstandardsboard.org.uk

But my view is yes, if the Barrister had the papers a week before he would have known that there would have been a potential conflict plenty of time in advance.

That way the meeting could have been cancelled and you would not have needed to come from Spain.

So yes I agree, he should have known earlier and made reasonable attempts to inform you, especially if he knew you were flying in.

I realise that this is stressful but hope this helps.




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Customer: replied 3 years ago.

Thank you, XXXXX XXXXX it is pretty clear. However, do you also think the lawyers present, who were also representing me AND my wife who was not present should have done something. The answer to our complaint was that I could have stopped the con at that point and/or rang my wife and if we had not wanted to continue, we would not have been charged anything. How a lay person would possibly know that (when logic says 85% of the work has been done in prepping for the con) in a pressure situation (btw my wife is very ill bed bound and they knew that too). However, I was not representing my wife, the lawyers were and they did nothing, even if I was happy to continue she may not have been and no one asked her and its half her money that paid for it.

Expert:  UK-Justice replied 3 years ago.
Yes I agree.



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Customer: replied 3 years ago.

Hi thanks, XXXXX XXXXX part 1, this is part 2. Not sure if there is an additional charge, please let me know.


 


The same lawyers were instructed only to deal with assessing the merits (via counsel) to facilitate a meeting with the bank. We had already had (without them) various meetings and letterly a full mediation (which the bank paid for in full including flying 2 Hogan Lovells partners, a Barclays Legal VP and a partner from their gib law form and a QC mediator out to Spain as my wife was immobile Mmmmm, think they wanted to settle). An agreement had been made to meet again and a substantial 6 figure sum was offered by the bank but not the millions we had lost. We wanted to be sure we were maximising our case so had approached the firm you advised on earlier to look at that aspect so the benefit of the next and hopefully final meeting could be maximised. This was theirs and counsels instruction.


 


The law firm, agreed on a speculate to accumulate basis presumably to conduct all work, bar a few hundred pounds for no charge. They prepared the bundles, instructed counsel and attended con. We did pay them counsels fees. Very generous of them but does not override their duties to us as clients though. They saw something in the claim anyway and a desire on the part of the bank to settle and expected a positive outcome from counsel.


 


Following the con, which was VERY negative from counsels perspective (we had no claim and had wasted 4 years fighting them, against all other advice we had had and should have sued the valuers and the last lawyer) it was clear the bank wanted to settle so we agreed to discuss further options with the lawyers for meeting the bank. They knew we had little money (this matter has virtually destroyed us, we were millionaires once) so they proposed in writing to represent us at NO COST at a meeting with the partner and solicitor. We accepted that offer in writing and I even discussed it on the telephone with the partner afterwards. He said they would essentially have to bill us but would not seek payment hoping to get costs from the bank but said if the meeting was unsuccessful, that was it, no downside to us. Bear in mind this was a further mediation/meeting, not part of the claim progress in court etc. We notified the bank this firm would be with us and began to think about dates for meetings.


 


Then a week later, out of the blue the partner wrote to us saying that he had discussed this with the other partners and as they could not define 'success' and/or how they would get their monies off the bank if successful they would not be able to operate this way and now required £12,000 to act for us. You've got no money, dont expect you will instruct is now so let us know how it all pans out !!!


 


In my view they had made an offer, we accepted, a contract existed and they were backing out. I do not think they can do that. We have now had to hold off meetings with the bank as we cannot go unrepresented at this crucial stage and so we look weak as we will not be able to use this firm having told the bank we would.


 


However, would you agree a contract exists and if so what is the remedy IF both parties feel they could not work with each other, paid or unpaid. My understanding is that the partner was incorrect even to offer his services in this way but that is not our fault, he made an offer and we accepted. it, he backed out, we are compromised


 


I guess its a simple (ha ha) matter of does a contract exist in the above scenario and if so what is the remedy for it being broken.


 


 


 

Expert:  UK-Justice replied 3 years ago.
It is going to be hard for me to give a firm view based on what you have said and not seeing all the evidence.

But you are right, if there is a contract and it has been breached there would be a remedy for loss.

You can ask the Court for:

1) An order for specific performance (making one side do something)
2) And/or compensation.




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Customer: replied 3 years ago.

Yes of course, you cannot see the evidence, I appreciate that. However, IF in my scenario, the lawyer clearly wrote what he was prepared to do and for what recompense (which is as described above) and we accepted that AND he confirmed it verbally, does that sound like it could be a contract.


 


I do not see how it could not be and if it isn't I don't know what is.


 


I could keep you busy all night, you would not believe the things that just seems to happen to my wife and myself, we seem to be magnets for this stuff. All I did was want some simple advice and ....... it turns into a Tom Sharpe novel.


 


I think that is the last question and I thank you.

Expert:  UK-Justice replied 3 years ago.
Yes that sounds like it is a contract.

If his conduct indicates acceptance then it is acceptance.

I hope that helps.



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Customer: replied 3 years ago.

Hi, you answered a question on conflict of interest this week and I have 2 further points on other matters not connected to that and wondered if you were able to answer.


 


This is the first one


 


I am a leaseholder in a flat with 4 flats including mine. Each leaseholder is also a 25% shareholder in the Company that owns the freehold. I have had various disputes all of which I have won and just had a manager appointed by the LVT (again) and had numerous service charges wiped out by the LVT (again). The other 3 flats are now all owned by one family between them(husband, wife, daughter) but onlt the husband is a director, we are not and never have been a director even though all other past owners had this option.

At the LVT last month, it was established that the 3 years account 10/11/12 were inaccurate even using the papers supposedly used by the Company to produce SC accounts. However the husband 'Director' ie the Company also admitted to the LVT that many of the invoices he used to support the accounts were (quite clearly) all very similar and were crested by the man himself in his own name to the Company, in other leaseholders name (the 2 previous owners his family members bought from in 2011) and even in the name of traders who he said did work at the property (we do not live there, it is rented out), prestigious flat in Primrose Hill.

He said this was because he got better prices and avoided paying VAT and the trader of course would have avoided tax etc. As a result there was no evidence that some of that work had even been done and the LVT wiped out many invoices for this and other reasons. He has no guarantees, these traders are his 'friends' so will sort anything out bla bla bla. I believe his actions in basically using fabricated (forged?) invoices is false accounting and potentially an offence under the theft act (or fraud). Would that be your view?

Secondly, in 2012 he wrote to our lender demanding £10,500 in unpaid service charges. A letter from an accountant friend of his accompanied the demand and the letter said we had never paid a penny in charges since 2004 (untrue) and threatened forfeiture of the lease (which is virtually impossible to do nowadays anyway). The demand also sought £1500 in 'directors fees'.

The LVT were quite shocked by this, one because he admitted he had never even asked us for this money and secondly because he should know he cannot charge directors fees under the lease.

The accountant friend apparently isn't an accountant, at least not any more, he is retired and yet the headed paper says he is an accountant AND has letters after his name which are not even accountant qualification letters.

The LVT found that the directors fees were not allowable BUT they said both the Company AND the accountant (who professed to have 3 years experience in property management) should have known this. They described this action in their written findings as 'unlawful'. Needless to say we do not owe that money and in fact the LVT findings will show we owe about £250 as at end of 2012 when the new manager takes over.

The lender apparently actually paid him the money (despite admitting they got an email from me telling them not to and why). They say they cancelled the payment but refuse to confirm how/when this happened.

This person has history as in 2009 we took out a high court action for various things including breach of trust as he and the other directors at the time had used SC funds for non SC expenditure eg legal fees etc. The judge gave them a gypsy warning on hour one day one of the trial and they settled all our claim and paid 100% of our costs.

I will not go into all the other issues as my questions are simple (I hope).

1. Would this mans actions in producing invoices in the manner he has and in his and others names (unbeknownst to those people) constitute false accounting and if so might it be covered under the theft act. I have read about this and it seems to me very clear it is.

2. What might the LVT's use of the word unlawful mean in the context of the above explanation.

There are other matters in dispute (he granted lease extensions for his own and his families flats but refuses to give us one on the same terms) and I need to put all the 'bad stuff' together so I know what I might be able to use as leverage in terms of closing everything

Customer: replied 3 years ago.

This is the second question.


 


A creditor (£28,000) has a final charging order on a property we own (currently let out but it is our only remaining property asset and my wife and child will have to live there from April 2013 when the lease expires).

The flat is bound in legal disputes with the Company who own the freehold (all 4 flats own a quarter share in the company which owns the freehold but the other three are all related to each other and seem to think they can act in their own best interests) Without going into unnecessary detail that lease dispute will not resolve until a court decides. The other flats have the benefit of a 999 year lease extension, no premium which they granted themselves behind our backs. Ours is now on a short lease sub 60 years and we are being refused the extension, hence the legal action (the LVT is not an option as we cannot get a 999 year lease and may have to pay a premium)

This means the flat would not achieve even the first charge mortgage (£725,000) if sold on the open market let alone a forced sale. My wife who is not a judgement debtor but is 50% owner would of course have her share of any profits protected if there were any reducing further any distribution to the creditor. However, even WITH the lease extension, the flat MAY just about make a small profit but it would not cover the judgement debt. A forced sale with no lease extension will make the flat unsaleable accept to extreme property speculators willing to buy litigation.

The creditor has now claimed under Part 8 for a sale order which we are fiercely resisting and are at the stage of filing the defence. I have all my arguments but I have a simple question.

In the circumstances whereby a sale order does not pay the first charge let alone any judgement debt (surely the sole purpose for any creditor taking this extreme action) does the FIRST CHARGE LENDER with a debt of in excess of £700,000, dwarfing the other creditors debt, have any say in whether a sale order would be in THEIR interest. I ask because I may also approach the mortgagee who is aware of our position and the lease issues but I do not want to stir up a hornets nest unless they can realistically help/object. I believe we can prove with valuations etc that in these circumstances thy would not even get their debt paid.

In an attempt to try everything I am proposing a payment plan but our financial position is very poor and I could not afford more than £100-150/month which may not be enough to satisfy a judge. I have not done this up to now as we have little resources and within the next 12 months our financial position may be resolved (long story) and I felt the creditor should be happy with the security a final charging order gives them on their unsecured debt

So my main question is about the rights if any of the first charge holder ie the mortgagee to block the sale order and do lenders take this approach.

Expert:  UK-Justice replied 3 years ago.
You have not yet rated my first answer and I would be grateful if you would do that now and I will be happy to consider these new ones.




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UK-Justice, Barrister
Category: Law
Satisfied Customers: 16193
Experience: Called to the Bar in 2007
UK-Justice and other Law Specialists are ready to help you
Customer: replied 3 years ago.

I did do this the other as 'good' as soon as it looked like the answer wa complete. Do you want me to do it again? I will anyway

Expert:  UK-Justice replied 3 years ago.
Thanks.

Are you able to summarise your question for me?
Customer: replied 3 years ago.

I don't know which one you are looking at, there were 2 posts.


 


One was in connection with a lender having influence in a final sale order made by an unsecured creditor who has a final charging order on a property and is applying under Part 8 for a sale order. There is not enough equity in the property to cover the lenders first charge debt let alone anything else so I wondered if the lenders might object to sale orders in certain circumstances where it is clearly not in their interests.


 


The other question is about Service charge accounts on a flat we own.


 


The LVT found in Jan 2013 that the landlord who was also managing the property produced invoices on his own computer in his name to the Company, in other leaseholders names and even in traders names who supposedly did work at the property, none of which is provable. The LVT wiped most of these invoices out. He did this to pay cash, avoid VAT and so the traders did not have to provide an invoice (his words not mine) hence we got a great deal !!!



If a person falsifies invoices in this way and tried to get me to pay 1/4 of them, is this false accounting. If it is false accounting is it theft under the theft act. I have read the definition and it seems pretty clear to me.



The same person also wrote to our lender demanding £10,500 in unpaid service charges. The figures were wrong and he knew they were (we owe £250 as per the LVT decision). He even threatened forfeiture and yet never sent any demands to us. He also demanded from the lender £1500 in directors fees which are not allowable under the lease. The LVT said this was 'unlawful' and he should have known he could not behave that way. The LVT actually used the word unlawful in their decision. What might be the definition of unlawful in those circumstances.



Hope this is succinct enough for you.



Thanks


 


 


 


 

Expert:  UK-Justice replied 3 years ago.
1. The Judge will decide whether it is reasonable to make an order for sale.

It is not for the lender to object. If The Judge orders the sale then the mortgage will be paid first.

The Judge will decide whether or not there is enough equity. Generally no equity no order for sale.


2. Unlawful simply means it can not be enforced. So if a debt is unlawful then it can not be chased.




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Customer: replied 3 years ago.

Thank you. The equity issue is key and one we are focusing on.


 


Would it be worth while asking the lender to make a statement? It might help, they might


 


Re unlawful. The LVT said his actions were unlawful, an unlawful act i.e. demanding £10,500 etc he knew he should not be demanding was unlawful, its not about an unlawful debt, its about his actions being described as unlawful. If someones actions are unlawful or they are seen to have done something unlawful what might that mean in the circumstances outlined.


 


The only other thing was to do with the false accounting issue which I described earlier(as briefly as I could)

Expert:  UK-Justice replied 3 years ago.
1) Yes ask the lender to make a statement but you could also do with valuation of some time.

Unlawful simply can not be collected.




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Expert:  UK-Justice replied 3 years ago.
I'm just following up with you to see how everything is going. Did my answer help?

UK-Justice
Customer: replied 3 years ago.

Hi,


 


I had to leave this until now.


 


The answers are not quite clear yet. BTW we do have a valuation.


 


1. I know the judge will decide on whether a sale order is granted but they do this based on many things and there is an enormous amount of discretion, equity being one, but many other things, human rights, rights of a minor,(my wife and child will live there from April 2013) proportionality etc. It is a draconian measure and all things are considered. My knowledge as a lay person gleaning what they can is that most unsecured creditors are happy with a final order. But if the property has massive equity then that is different but not the case here and we are not avoiding paying, we are in a poor financial position.


 


So my question was, in the situation where equity is an issue, do lenders get involved or do they just leave it to the court. I do not want to stir up a hornets nest with the lender unless it is something they generally consider.


 


Also, I do not know what you mean by 'unlawful cannot be collected' The sentence does not make sense.


 


The LVT wrote 'the unlawful demanding of directors fees' and that he KNEW he could not demand those fees. I understand the difference between illegal and unlawful (one is expressly forbidden etc)


 


Also, there was another question about false accounting which you have not answered re the service charge invoices which the director had falsified in his name,other leaseholders names and traders names who he said worked at the property (and then tried to get me to pay 1/4). I wont repeat the whole point as you should have it already.



Could that be false accounting as described under the Theft Act Sec 17 (which I also sent you an excerpt of)


 


Thanks


 


 


 


 

Expert:  UK-Justice replied 3 years ago.
Lenders do not normally get involved no.

If fees can not be demanded like the directors fees then they can not be enforced.

If service charge invoices were false then you should report this matter to the police.

This is fraud by false representation under the fraud act 2006

It is fraud rather than theft.





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Customer: replied 3 years ago.

Thank you, I already pre rated the question by mistake yesterday but if this is not apparent let me know


 


Rgds

Expert:  UK-Justice replied 3 years ago.
Thanks.

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