The Solicitors Regulation Authority has issued a rebuke to a firm for failure to comply with an undertaking within the agreed timescale in a conveyancing transaction.
Preston-based Gowlings Solicitors Limited was acting for the seller in a transaction when it provided an undertaking to the buyer’s solicitor to redeem the mortgage attached to the property on or prior to completion.
According to the SRA’s published decision, the firm did not obtain or verify a redemption statement before agreeing to the undertaking and was found to be reckless in agreeing to the undertaking without checking the redemption figure.
The sale proceeds were insufficient to discharge the mortgage in full, and the sellers did not have the additional funds to meet the balance.
The SRA found that the firm failed to perform an undertaking within the agreed timescale of 18 February 2025. The firm took steps to rectify the position including making payment of the shortfall from its own office account and the mortgage was redeemed in part on 20 April 2025 from the sale proceeds. The balance was transferred to the lender from the firm’s office account on 10 June 2025.
The SRA decided that a rebuke was an appropriate and proportionate sanction, explaining: “Undertakings are a fundamental aspect of legal practice and reliance is placed upon them by third parties. Failure to comply undermines trust in such arrangements.
“The firm had direct responsibility for compliance with the undertaking and failed to meet that obligation within the agreed timescale.
“The breach required remediation, including the firm making payment from its own funds to rectify the position.”
The firm has a previous regulatory finding relating to a failure to comply with undertakings which the SRA said remains relevant, but a more serious sanction was not considered to be proportionate as the firm had taken steps to remedy the breach and mitigate the impact on the buyer.
There was no evidence of dishonesty or that the conduct was deliberate, and there was no evidence of significant or lasting harm to clients or third parties.
The firm was issued with a written rebuke for breaching paragraph 1.3 of the SRA Code of Conduct for Firms 2019 and ordered to pay costs of £600.
2 responses
Why did this merit a rebuke? The firm made a mistake by failing to check the redemption figure and did the right thing by making good the shortfall out of its own monies. Why did the SRA even need to be involved? Am I missing something?
I have seen far worse breaches of undertaking during my many years in practice which have seen the SRA take precisely no action whatsoever. So why have they decided to issue a rebuke now? Is this the start of a new era?