News | SRA relies on property websites’ ‘fictional’ valuation to enforce £14,000 costs order

Former solicitor fails to resist costs enforcement order despite claims of being worse off than when he was struck off

18 July 2017

The Solicitors Regulation Authority has relied on estimates found on property websites to enforce a costs order for nearly £14,000 against a solicitor struck off four and a half years ago.

In February 2013, the Solicitors Disciplinary Tribunal upheld allegations that former sole practitioner John James had made a false representation about a telephone conversation with an expert witness and fabricated an attendance note.

The tribunal ordered that he should be struck off and that he should pay the SRA’s costs of £13,908 not to be enforced without leave.

The SRA has now said James’s interest in a property whose value had gone up significantly meant he was in a position to pay. The 51-year-old countered, unsuccessfully, that the SRA’s valuation, based on estimates taken from a number of property websites for houses on the same street, was ‘a fiction’.

James, who qualified in 1997 and ran his own firm, James Pearce & Co, used to draw about £25,000 when he was in practice and was the sole earner for his family. After the 2013 tribunal decision he became a car salesman for a while and, according to the SRA, was now earning around £45,000 a year.

Recent SRA enquiries into James’s circumstances led to a hearing in the High Court where counsel for the regulator said James had a 50 per cent interest in a property bought for £434,000, which was now worth about £600,000. Taking account of an outstanding mortgage, James’s interest in the property was estimated in the region of £231,000.

The SDT was presented with valuation evidence from websites rightmove.co.uk, streetcheck.co.uk, primelocation.com and zoopla.co.uk.

The regulator’s counsel said ‘online valuation of the property at [location redacted] indicated a value of £751,700 to 802,000. Other properties in the same road had slightly higher or slightly lower estimates’.

Resisting the application, James, who appeared in person, said he was no better off than in 2013. The oral examination at the High Court had caused him “great distress”, he said, and he had become ill as a result, which had reduced his earnings.

The former solicitor said the suggested price of his property was “a fiction” and that when he tried to sell it for £550,000 in 2011, he failed to find a buyer and had been told the property was more likely to be worth £495,000.

James told the tribunal that he owed £15,000 in tax arrears and £30,000 to his daughter’s school for fees, and that it was ‘ludicrous’ to suggest he was in a better position now than in 2013.

He said he had to get up at 3am to go and park his 15-year-old car at a friend’s house within walking distance of the coach station in Birmingham, where he boarded the 5.30am bus to London to attend the tribunal hearing, suggesting the £8 fare was all he could afford.

He told the tribunal the property would not sell because it wasn’t properly maintained and that, in any event, Lloyds Banks, to whom he owed £800,000, would seek a charging order if the SRA secured an enforcement order.

Nevertheless, the SDT found James had ‘a valuable asset as a result of his significant interest in the property’. ‘While there was some dispute about the value of that property, there was no doubt the respondent’s half of the equity would be in six figures.’

In addition to granting the SRA’s leave to enforce the 2013 costs order, the tribunal agreed to the regulator’s costs of £1,225, saying they were ‘reasonable’.

This story was first published on Solicitors Journal on 18 July 2017 and is reproduced by kind permission

 

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