Collapsed law firm client feels 'cheated'

A man left thousands of pounds out of pocket after the collapse of a major law firm says he feels "cheated".

Scottish firm McClure solicitors went into administration in 2021, affecting tens of thousands of customers across Britain.

Building Societies had referred some customers wanting advice on will writing to a separate company, which then advised they set up asset protection trusts with McClure.

Newcastle Building Society (NBS) said it previously had an "introducer relationship" with this company. A former McClure director said it was an ethical business that "never targeted the elderly or vulnerable" and "never approached clients".

Ken Jemma, from Boldon, wanted to get his finances in order for his family.

The 74-year-old said his financial adviser at NBS put him in touch with The Will Writing Company (TWWC) in 2008 and he was told the firm would look after his "future planning".

He said TWWC set up a trust and he paid £2,000 to put his £200,000 home in it.

"All I wanted to do was give everything I had left to my three children," he said.

He wanted to "make it straightforward for them" when he died.

NBS received a fee if customers entered into a contract with TWWC, which was not regulated by the Financial Conduct Authority or Solicitors Regulation Authority when Mr Jemma’s trust was set up.

TWWC ceased trading in 2018.

When a home was put into a trust, solicitors from McClure were named as trustees, meaning they were legal owners of the property.

Mr Jemma said he was not told this and it "was never part of the agreement".

When he later learnt solicitors were named as trustees, he questioned this and was told it was “procedure”, he said.

"I didn’t know who McClure were," he said. "I’d never heard of them."

His first problem with McClure came in 2019 when he had difficulty buying the freehold to his property, he said.

After contacting the law firm to complain, he was sent a document showing the solicitors’ names had been replaced by those of his children at his request, he said

"I had it in black and white that the wrong had been made right," he said.

However, when trying to sell his house three years later, he found that had not happened.

Two solicitors from McClure, which had gone into administration the year before, were still named as trustees, meaning Mr Jemma did not legally own his house and could not sell it.

The sale fell through and he missed out on "tens of thousands of pounds", he said.

Mr Jemma said he then had to pay another law firm £2,000 to have the house put back in his family name and the two McClure solicitors also charged £100 each to remove their signatures.

"In total, I’m around £7,000 out of pocket," he said. "That’s cash.

"My life is in turmoil."

"I believe I wouldn’t be in this position without the guidance of Newcastle Building Society," he said.

"When you get a financial adviser you put your trust in them."

Mr Jemma said he received a £500 "good will gesture" from NBS after making a complaint.

The building society said: "Whilst we previously had an introducer relationship with The Will Writing Company, they were responsible for the advice they gave to customers who were interested in estate planning services.

"We understand this included offering some products and services to some customers through McClure Solicitors, a firm which was regulated by the Law Society of Scotland and the Solicitors Regulation Authority in England and Wales."

Another NBS customer, Carole Nixon, from Forest Hall, was asked by a member of staff if she wanted to meet TWWC in 2011.

She had gone into a branch to make a financial transaction.

"It was a very fateful day," her daughter Annette Riding said.

Mrs Nixon, then 69, and her husband both had wills, but she paid for two new ones.

Mrs Riding, who lives in West Moor, does not know what was said next, but her mother "spent £5,500 on two trusts" with McClure.

Her parents only needed one, she said.

When McClure collapsed, another law firm - Jones Whyte - took over its files but Mrs Riding said she did not know this until the firm wrote to her in June 2021.

Jones Whyte said it did not contact her earlier because it did not write to customers whose trusts were not in need of immediate legal work.

Mrs Riding said it was "a total nightmare".

"I didn’t know where to start," she said.

Her two-year legal battle had affected her sleep and the impact on her mental health had been "horrendous", she said.

She paid another law firm £1,200 to have the names of two McClure solicitors removed from the documents for her parents’ home.

Her father died in 2012 and her mother, now 81, lives in a care home.

Their house sat empty while their daughter fought to get it back in the family name.

"We couldn’t sell it, we couldn’t rent it," Mrs Riding said. "We’ve just had to maintain it and pay the bills.

"We’ve spent £4,000 on solicitors' fees and £6,000 on maintaining the house."

Mrs Riding is now supporting hundreds of other people who are only just finding out they have been affected by McClure’s collapse.

"A lot of the people are elderly so we need this sorted for them urgently," she said.

Former McClure director Andrew Robertson told the BBC the trust "was and remains a good service" and the fact McClure no longer existed did not affect it.

It was "not correct that many trusts had issues" and clients "should not fear that money has been wasted", he said.

In some cases where people were struggling to sell homes, the reason was "the agents dealing with the sale have failed to contact the trustees at the outset", he said.

McClure never had any reason not to work with TWWC, he had met them frequently, and their procedures were "robust", he added.

In Mr Jemma’s case, "it was clear from the draft deeds and from the final deeds which were signed by the clients" that solicitors were named trustees on the documents to his home, Mr Robertson said.

He was one of those solicitors and charged £100 to remove his signature from the deeds because there was "a lot of work involved", he said.

He could not comment on whether McClure agreed to replace the trustees on Mr Jemma’s deeds in 2019, he added.

Jarrow Labour MP Kate Osborne wrote to the government about what had happened to Mr Jemma and others.

In an email to the Justice Secretary Alex Chalk, she referred to the findings of a BBC investigation into McClure.

The Justice Minister Mike Freer replied, recommending Mr Jemma made a complaint to the Solicitors Regulation Authority (SRA), which regulates law firms in England and Wales, or the Legal Ombudsman.

Ms Osborne said those affected had already contacted those bodies and were "not getting anywhere".

“If the government aren’t careful, they will have another scandal in terms of numbers in line with the Post Office scandal," she said.

Ms Osborne and South Shields Labour MP Emma Lewell-Buck are now hoping to hold a parliamentary debate on the issue of asset protection trusts and the role of building societies.

The SRA confirmed it was investigating the McClure collapse.

"We can take action if we find evidence that solicitors or regulated law firms have fallen short of the high professional standards the public expect," it said.

The Ministry of Justice (MoJ) said: "Regulation of the legal professions is independent of government and it is right that the independent regulator continues its investigation."

Police Scotland said it had met some of those affected and was working “to establish if there is any criminality".

Follow BBC Newcastle on X (formerly Twitter), Facebook and Instagram. Send your story ideas to [email protected].