SDLT Mitigation schemes.......buy cheap, buy twice!
Discussion
thank you for the responses. It is so frustrating that there seems to be no support out there and also to apply for the compensation scheme you seem to need to represent yourself and present a legal case as to why you are entitled to it. I am going down the professional negligence route too, the SRA very helpfully picked up a point in my letter and put me right that Adobe were not acting dishonestly but incompetently and the dishonest argument would fail. Has anybody taken any legal advice? I am going to contact the firm ELS Legal who have asked for Abode customers to come forward to see what they say/charge and also contact a couple of no win/no fee companies to see what they think...I had also thought contacting Watchdog would be a good idea...
After reading your responses I will contact the insurers too.
After reading your responses I will contact the insurers too.
Ultimately any legal advice you get will cost a fair amount and only you can judge if that is a risk worth taking in proportion to your incurred losses.
In my case I'm relatively lucky in that we don't stand to lose a life changing amount like some of the sums mentioned on here, which must be devastating. My case is now in the hands of XL and I've already put more work and effort into it than I'd ever wanted to so I'm just going to take what comes, chalk it down to experience and hope karma bum rapes the abode directors
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In my case I'm relatively lucky in that we don't stand to lose a life changing amount like some of the sums mentioned on here, which must be devastating. My case is now in the hands of XL and I've already put more work and effort into it than I'd ever wanted to so I'm just going to take what comes, chalk it down to experience and hope karma bum rapes the abode directors
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Dave, yes unfortunately ours has set us back £6200 (Abode did send us a cheque back for £4100) and approx £1000 in interest from HMRC. I am going to approach some solicitors, quite a few advertise the no win option for professional negligence and you normally get 30 mins free advice anyway I think so I can decide if it is worth pursuing. I am hoping our saving grace maybe that we were not entered into a SDLT scheme but Abode pocketed the money and put an incorrect figure on our SDLT tax return. I have a letter they sent us saying laws have changed and asking us to sign so they can fill out the form on our behalf. Will see what happens, one thing I know I will NEVER use an online conveyancing company like this again and always do my own SDLT return. You live and learn
We too didn't take part in any scheme either, but the outcome is the same-we have to pay hmrc and the SRA is useless.
I managed to upset someone here by saying abode were inadequately insured. If the insurance won't pay our claims then we were inadequately insured.
I managed to upset someone here by saying abode were inadequately insured. If the insurance won't pay our claims then we were inadequately insured.
Edited by blues for uk on Thursday 27th November 00:29
blues for uk said:
We too didn't take part in any scheme either, but the outcome is the same-we have to pay hmrc and the SRA is useless.
I managed to upset someone here by saying abode were inadequately insured. If the insurance won't pay our claims then we were inadequately insured.
Hi,I managed to upset someone here by saying abode were inadequately insured. If the insurance won't pay our claims then we were inadequately insured.
Edited by blues for uk on Thursday 27th November 00:29
You didn't upset me; I just wanted to understand what you meant and offer any help or advice if I could. You answered my question, which was fair enough.
I'm not for one second defending Abode's practices or actions, but they did carry sufficient PI Insurance from a recognised provider in accordance with their regulation. That would be my definition of 'adequately insured'.
I appreciate it doesn't help anyone here, but whether or not PII is the right avenue for compensating people who have suffered as a result of Abode's actions is another question - one it seems XL are investigating and trying to answer. PII for a solicitor is there to pay claims to third parties who have had a financial loss arising from the solicitor's negligence, errors & omissions.
All Solicitors must carry a minimum standard of PII cover, called the Minimum Terms & Conditions which are laid out by the SRA, and in Abode's case underwritten by XL . Copy and much more reading here: http://www.sra.org.uk/solicitors/handbook/indemnit...
Note that a PII policy does not have to extend to provide cover for fraud or dishonesty carried out by the firm / its employee.
So, if it is tested and decided that Abode's actions were negligent and fall within the scope of the policy, XL may well have to pay any claims that arise. If it is decided that the actions arose from fraud, and this does not fall within the scope of cover given by XL, the PII policy will not be required to respond.
The summary point is that whilst a PII policy has to provide genuine protection for solicitors' clients against mistakes, insurers can't be expected to idly pick up the tab for fraud and illegal practices too - otherwise law firms would just have free reign to do what the hell they liked, knowing insurers would foot the bill.
My personal view is that, if the scenario(s) are shown not to be covered by PII, the Solicitors' Compensation Fund is probably a more relevant vehicle for compensating clients due to any fraud or dishonest practices that may have occurred. But that relies on The Law Society, the SRA and insurers all working together for the best outcome, which unfortunately is quite an ask.
Edited by ShortShift811 on Thursday 27th November 13:06
Edited by ShortShift811 on Thursday 27th November 13:07
Has anyone had any success with contacting XL Insurance (the firm that provided PII cover to Arc)? It seems that Kennedys Law is dealing with all claim aspects of Arc / XL. I have been advise by Laura Mellstrom, (Kennedys Law) to send requests to XLsolicitorsclaims@kennedyslaw.com. I sent my first email to that address on 10 December asking for an acknowledgement receipt; received no response. Have sent two further email - each one slightly stronger than the last - and still no response to date.
I have been contacted by Ruth Newton of Tiger Aspect - a firm that is developing a documentary for Channel 4 on SDLT Mitigation Schemes that were legally entered into and have since been deemed to be 'blocked' by HMRC. Their interest is in the way in which solicitors and insurers have handled the people who have found themselves 'losing' (cannot legally say 'ripped off') large amounts of money when the schemes were blocked and Arc Solicitors went very quiet indeed. Contact number is 0208 222 4891 if anyone is interested.
Any news is good news on this......
I have been contacted by Ruth Newton of Tiger Aspect - a firm that is developing a documentary for Channel 4 on SDLT Mitigation Schemes that were legally entered into and have since been deemed to be 'blocked' by HMRC. Their interest is in the way in which solicitors and insurers have handled the people who have found themselves 'losing' (cannot legally say 'ripped off') large amounts of money when the schemes were blocked and Arc Solicitors went very quiet indeed. Contact number is 0208 222 4891 if anyone is interested.
Any news is good news on this......
Contacts at Kennedys I used were:-
Laura Mellstrom [Laura.Mellstrom@kennedyslaw.com]
Hilton, Paul [P.Hilton@Kennedys-law.com]
Still not heard anything back from them following submission of my claim:-
Laura Mellstrom [Laura.Mellstrom@kennedyslaw.com]
Hilton, Paul [P.Hilton@Kennedys-law.com]
Still not heard anything back from them following submission of my claim:-
Kennedys said:
Thank you for your email. I can confirm that your letter of claim with enclosed documents was received here on 22 September 2014. My apologies for omitting to acknowledge receipt earlier.
I can confirm that your claim is under review and we will endeavour to revert to you within the three month protocol period, which will expire on 13 January 2015.
Are you able to provide any of the other emails which you received from Abode/Arc? In particular, I would expect that they will at some point have sent you a pack of documents for signature including the contract, SDLT form, transfer and possibly a Supplemental Deed. Do you have these attachments? If not, can you let me know why you no longer have them?
Kind regards
Laura Mellstrom
Senior Associate for Kennedys
I can confirm that your claim is under review and we will endeavour to revert to you within the three month protocol period, which will expire on 13 January 2015.
Are you able to provide any of the other emails which you received from Abode/Arc? In particular, I would expect that they will at some point have sent you a pack of documents for signature including the contract, SDLT form, transfer and possibly a Supplemental Deed. Do you have these attachments? If not, can you let me know why you no longer have them?
Kind regards
Laura Mellstrom
Senior Associate for Kennedys
Thanks Dave. Am I right in saying we don't need a claim form but need to write a letter and send with supporting documentation? I guess emails are not effective then?
It is interesting that Laura Mellstrom told us to send an email to the other email address that I put in my earlier post...perhaps she has set that up to handle the Arc debacle?
It is interesting that Laura Mellstrom told us to send an email to the other email address that I put in my earlier post...perhaps she has set that up to handle the Arc debacle?
When I enquired as to how to proceed I got the following reponse from Paul at Kennedys
Kennedys said:
I attach below a link to the Pre Action Protocol which relates to Professional Negligence disputes. This should provide fairly comprehensive guidance to the steps to take going forward.
http://www.justice.gov.uk/courts/procedure-rules/c...
Kind regards
Paul
Essentially you have to submit a letter of claim to them which outlines the chronology of events plus evidence and how much you think you are owed. They should then conform receipt and there is a 3 month (I think) time limit for them to reply. I should get notice in a few weeks so we'll see. I'm not confident I'll get anything back though!http://www.justice.gov.uk/courts/procedure-rules/c...
Kind regards
Paul
Edited by dave_s13 on Thursday 18th December 18:11
Devon Heaven said:
Thanks Dave. What makes you lack confidence in a positive outcome?
Maybe a class action suit with a solicitor on a 'no win- no fee' basis is the way to go? It would mean a whole group of us getting together.....
If unsuccessful then I'd be up for exploring that avenue. Maybe a class action suit with a solicitor on a 'no win- no fee' basis is the way to go? It would mean a whole group of us getting together.....
The response I got from the sra makes me feel dubious about success. I suspect the insurers may follow the same tack.
Just have to wait and see yet though.
It's nothing to do with this matter being "stage managed" as you put it.
The preaction protocol for professional negligence claims stipulates a 3 month period for the defendant (or in this case its insurers) to investigate the claim and provide a full response. It is entirely normal for the whole period to be used and nothing should be inferred from this.
As I think has been explained above, the issue is whether the solicitors were negligent (they simply offered duff advice), in which case the XL policy will likely respond as under the SRA minimum terms there are limited reasons available to insurers to not cover the claim, or whether this was fraudulent behaviour, which is one of the reasons why insurers could refuse to cover the claim (save that the policy will respond to cover innocent partners, if there are any).In this case the SRA should step in to indemnify clients who have suffered loss as a result of the fraud.
The preaction protocol for professional negligence claims stipulates a 3 month period for the defendant (or in this case its insurers) to investigate the claim and provide a full response. It is entirely normal for the whole period to be used and nothing should be inferred from this.
As I think has been explained above, the issue is whether the solicitors were negligent (they simply offered duff advice), in which case the XL policy will likely respond as under the SRA minimum terms there are limited reasons available to insurers to not cover the claim, or whether this was fraudulent behaviour, which is one of the reasons why insurers could refuse to cover the claim (save that the policy will respond to cover innocent partners, if there are any).In this case the SRA should step in to indemnify clients who have suffered loss as a result of the fraud.
Edited to add parenthesis by MrHargreaves on Tuesday 6th January 08:38
Edited by MrHargreaves on Tuesday 6th January 08:39
Mr Hargreaves,
Sorry to upset the establishment with straight talking about the SRA and insurers 'stage managing' this.
Arc/Abode didn't tell us what Arc/Abode was doing at the time so we feel duped, we were misled, we have been let down, and now we have lost a lot of money. But what Arc/Abode was doing was perfectly tax legal at the time that Arc/Abode was doing it. We didn't understand or know what Arc/Abode was doing but I am afraid that's all history now.
Later on in time, HMRC subsequently won a tax test case against a wealthy individual who was using a SDLT mitigation scheme (it turns out Arc/Abode were using the same type of scheme).
HMRC then decided to apply (the ruling in HMRC's favour) retrospectively, going back in time, going after "easy targets" of past transactions. Fridays Solicitors say HMRC can go back 6 years.
No insurer will cover changes in tax law retrospectively applied. And neither will the SRA.
The SRA disciplinary hearing concluded Arc/Abode wasn't being negligent or committing fraud. I don't agree with the SRA but my opinion is worth nothing because the matter is a cover up in which the SRA and the insurers want to wriggle out. Can we appeal against the SRA disciplinary hearing? No, we cannot. Closed shop.
Sorry to upset the establishment with straight talking about the SRA and insurers 'stage managing' this.
Arc/Abode didn't tell us what Arc/Abode was doing at the time so we feel duped, we were misled, we have been let down, and now we have lost a lot of money. But what Arc/Abode was doing was perfectly tax legal at the time that Arc/Abode was doing it. We didn't understand or know what Arc/Abode was doing but I am afraid that's all history now.
Later on in time, HMRC subsequently won a tax test case against a wealthy individual who was using a SDLT mitigation scheme (it turns out Arc/Abode were using the same type of scheme).
HMRC then decided to apply (the ruling in HMRC's favour) retrospectively, going back in time, going after "easy targets" of past transactions. Fridays Solicitors say HMRC can go back 6 years.
No insurer will cover changes in tax law retrospectively applied. And neither will the SRA.
The SRA disciplinary hearing concluded Arc/Abode wasn't being negligent or committing fraud. I don't agree with the SRA but my opinion is worth nothing because the matter is a cover up in which the SRA and the insurers want to wriggle out. Can we appeal against the SRA disciplinary hearing? No, we cannot. Closed shop.
Edited by blues for uk on Tuesday 6th January 11:56
I don't know where you got the impression that I am the establishment but whatever makes you happy... the pre action protocol has been around for a while, I suggest you google.
The SRA or, more correctly, the SDT did not say that Arc was not negligent. That can only be determined by a court of law. What they did say was Arc and/or its partners had:
•not acted in the best interests of their clients
•not provided a proper standard of service
•failed to act in a way that maintains the trust the public has in solicitors and the provision of legal services
•failed to run their business effectively and failed to protect client money and assets.
XL's solicitors will determine whether they believe Arc's actions were negligent and inform you. It is then up to you whether you wish to bring proceedings to recoup the loss you have suffered.
Opining that you did not know what was going on is not going to help your cause. There is always the risk of challenge by HMRC and that is what happened. If you believe you were negligently advised then you have recourse in the Courts. Alleging that the insurers or SRA are "stage managing" just undermines any sympathy that people may have for your position
Moderator edit: less of the allegations please.
The SRA or, more correctly, the SDT did not say that Arc was not negligent. That can only be determined by a court of law. What they did say was Arc and/or its partners had:
•not acted in the best interests of their clients
•not provided a proper standard of service
•failed to act in a way that maintains the trust the public has in solicitors and the provision of legal services
•failed to run their business effectively and failed to protect client money and assets.
XL's solicitors will determine whether they believe Arc's actions were negligent and inform you. It is then up to you whether you wish to bring proceedings to recoup the loss you have suffered.
Opining that you did not know what was going on is not going to help your cause. There is always the risk of challenge by HMRC and that is what happened. If you believe you were negligently advised then you have recourse in the Courts. Alleging that the insurers or SRA are "stage managing" just undermines any sympathy that people may have for your position
Moderator edit: less of the allegations please.
Edited by jeremyc on Wednesday 7th January 09:11
MrHargreaves said:
Opining that you did not know what was going on is not going to help your cause. There is always the risk of challenge by HMRC and that is what happened. If you believe you were negligently advised then you have recourse in the Courts. Alleging that the insurers or SRA are "stage managing" just undermines any sympathy that people may have for your position
I am reading this topic out of professional interest mainly as I would like to know how this all flushes out in the end. HMRC will not care that you do not understand the minute of their rules and regs, only that you have not acted in accordance with them. The reasoning behind this is irrelevant to them. They are a 'computer says no' entity unless you have Vodafone levels of income.
One thing that has always bothered me about this is what form of guarantees were given to those who entered into these schemes and how many of those that did enter into them sought out such a scheme rather than were told that they existed and here is a company that can assist.
Over the last X years I have fielded calls on a monthly basis asking for advice on such schemes and if my firm dealt with them. We took a legal and business decision not to ever entertain such schemes. We also advised Clients to steer well clear of them as it was our opinion, and that of a number of other solicitors and accountants, that they were at best a bit of a punt.
I feel deeply sorry for those of you who have been caught up in all of this through no fault of their own.
Edited by jeremyc on Wednesday 7th January 09:11
Mr GrimNasty said:
dave_s13 said:
So,
It looks like I have a completion statement that shows I paid Arc the full amount of SDLT.
There is nothing in there to say they implemented the planning scheme...ie I'm £1550 down and have to pay it again.
It effectively it looks like I have paid them the full amount and they have fraudulently filled in the SDLT to show £0 is owed....then pocketed the £1550.
Surely you know how much you paid to the conveyancer and what it was (supposed to be) for? If you were told to pay in full but to expect a refund, why didn't you query its non-appearance. You indicate you don't have a lot of spare cash - how could you lose track of £hundreds?It looks like I have a completion statement that shows I paid Arc the full amount of SDLT.
There is nothing in there to say they implemented the planning scheme...ie I'm £1550 down and have to pay it again.
It effectively it looks like I have paid them the full amount and they have fraudulently filled in the SDLT to show £0 is owed....then pocketed the £1550.
k of with it then it seems very unfair if Joe Bloggs then has to pay it again!TX.
Terminator X said:
Mr GrimNasty said:
dave_s13 said:
So,
It looks like I have a completion statement that shows I paid Arc the full amount of SDLT.
There is nothing in there to say they implemented the planning scheme...ie I'm £1550 down and have to pay it again.
It effectively it looks like I have paid them the full amount and they have fraudulently filled in the SDLT to show £0 is owed....then pocketed the £1550.
Surely you know how much you paid to the conveyancer and what it was (supposed to be) for? If you were told to pay in full but to expect a refund, why didn't you query its non-appearance. You indicate you don't have a lot of spare cash - how could you lose track of £hundreds?It looks like I have a completion statement that shows I paid Arc the full amount of SDLT.
There is nothing in there to say they implemented the planning scheme...ie I'm £1550 down and have to pay it again.
It effectively it looks like I have paid them the full amount and they have fraudulently filled in the SDLT to show £0 is owed....then pocketed the £1550.
k of with it then it seems very unfair if Joe Bloggs then has to pay it again!TX.
Guess it comes down to either paying a bit more and using a reputable firm, or paying the bottom price and taking on more of these tasks yourself.
PugwasHDJ80 said:
You are allowed to pay it direct- just most law firms will pay it on your behalf - which when you are moving house is very helpful.
If you're buying with a mortgage, there won't be an opportunity to pay it yourself; the firm will be giving an undertaking to the mortgagee that they will submit the SDLT return, so they will need to pay it.blues for uk said:
Mr Hargreaves,
Sorry to upset the establishment with straight talking about the SRA and insurers 'stage managing' this.
Arc/Abode didn't tell us what Arc/Abode was doing at the time so we feel duped, we were misled, we have been let down, and now we have lost a lot of money. But what Arc/Abode was doing was perfectly tax legal at the time that Arc/Abode was doing it. We didn't understand or know what Arc/Abode was doing but I am afraid that's all history now.
Later on in time, HMRC subsequently won a tax test case against a wealthy individual who was using a SDLT mitigation scheme (it turns out Arc/Abode were using the same type of scheme).
HMRC then decided to apply (the ruling in HMRC's favour) retrospectively, going back in time, going after "easy targets" of past transactions. Fridays Solicitors say HMRC can go back 6 years.
No insurer will cover changes in tax law retrospectively applied. And neither will the SRA.
The SRA disciplinary hearing concluded Arc/Abode wasn't being negligent or committing fraud. I don't agree with the SRA but my opinion is worth nothing because the matter is a cover up in which the SRA and the insurers want to wriggle out. Can we appeal against the SRA disciplinary hearing? No, we cannot. Closed shop.
I don't think that's quite right. HMRC wouldn't have won that case if what Abode/Arc were doing was legal at the time. All that changed with the test case was that HMRC's belief that the scheme was illegal was confirmed.Sorry to upset the establishment with straight talking about the SRA and insurers 'stage managing' this.
Arc/Abode didn't tell us what Arc/Abode was doing at the time so we feel duped, we were misled, we have been let down, and now we have lost a lot of money. But what Arc/Abode was doing was perfectly tax legal at the time that Arc/Abode was doing it. We didn't understand or know what Arc/Abode was doing but I am afraid that's all history now.
Later on in time, HMRC subsequently won a tax test case against a wealthy individual who was using a SDLT mitigation scheme (it turns out Arc/Abode were using the same type of scheme).
HMRC then decided to apply (the ruling in HMRC's favour) retrospectively, going back in time, going after "easy targets" of past transactions. Fridays Solicitors say HMRC can go back 6 years.
No insurer will cover changes in tax law retrospectively applied. And neither will the SRA.
The SRA disciplinary hearing concluded Arc/Abode wasn't being negligent or committing fraud. I don't agree with the SRA but my opinion is worth nothing because the matter is a cover up in which the SRA and the insurers want to wriggle out. Can we appeal against the SRA disciplinary hearing? No, we cannot. Closed shop.
Edited by blues for uk on Tuesday 6th January 11:56
The 'problem' here is that it's pretty much impossible for anyone signing up to these sorts of things to know which way a judge will decide. That's the risk you take if you decide to get involved.
I appreciate that the OP wasn't aware that he was getting involved, so the second paragraph is only general.
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