A Bridport firm of solicitors was investigated for two years by its industry watchdog after a Panorama TV show about investment property conveyancing.

Three members of staff from Milne and Lyall Solicitors in West Street reached an agreed outcome with the Solicitors Regulation Authority (SRA) after the probe.

Solicitor Christopher John Graham White agreed to be severely reprimanded and solicitor David Marcus Lester agreed to be reprimanded.

Lindsey Blair, who headed up the property department, agreed to be subject to an order to be imposed by the SRA.

Mr White, 73, who has a sick wife, is also retiring and the firm is closing on New Year’s Eve with the loss of about 15 jobs, after 80 years in business.

He agreed not to practise as a solicitor after December, 2010.

The trio say they are deeply saddened by the affair and reluctantly entered into the agreement because they could not afford the £150,000 to fight the case.

Milne and Lyall was one of the biggest investment conveyancing businesses in the country four years ago.

The trio say that the probe came after Panorama screened a programme, called Bursting the House Price Bubble in February 2008.

The SRA examined the firm’s dealings for businesses involved in finding properties to buy and sell as investments.

The SRA settlement stated that in some cases between a third and just up to a half of bridging finance for deals was provided by a client of the firm – a charitable trust – of which Mr White and Mrs Blair were trustees. The settlement states: “By doing so the firm benefited in that the firm charged fees to clients for the paperwork in respect of the bridging loans.

“The firm was entitled to, and did receive fees for managing the trust.

“The trust received interest on the monies advanced and the fees for arranging the bridging loans.”

Mr White and Mrs Blair agreed to resign as trustees of the trust, the Thomson Trust, which was created under the will of James Leonard Thomson in April 1996.

Former engineer Mr Thomson lived at Netherbury before moving into a nursing home. He had no surviving relatives in this country and Milne and Lyall looked after his affairs.

The SRA agreed outcome said that Mr White, Mr Lester and Mrs Blair admitted: l that they failed to obtain the written consent of all parties where the firm acted for seller, buyer and lender in the same transactions l that they failed to act in the best interests of lender clients by failing to report material information as to the costs and incentive in property transactions; l that Mr White derived a personal gain from his position as trustee; Mr Lester indirectly as a partner in the firm; and Mrs Blair as trustee indirectly as an employee of the firm l that Mr White and Mrs Blair failed as trustees and Mr Lester as a partner to act in the best interests of the trust and that they acted in circumstances of conflict of interests.

The SRA decision also stated: “The activities of the firm in fact contributed to the income of the trust.

“The trust funds were not at risk.

“No complaints have been made by clients. Mr Lester's involvement was on the periphery.”

Mr White, Mr Lester and Mrs Blair also agreed to pay SRA costs to the sum of £39,624.

A STATEMENT from Mr White, Mr Lester and Mrs Blair maintained their innocence and said that they were deeply saddened by the affair.

They say: “The people of Bridport for whom we have acted over the past 35 years will be aware of our efforts to provide the best service possible to all of our clients and we believe, despite what the SRA are implying, that we have always done this.

“The SRA have been conducting an investigation begun unilaterally by themselves into the work of investment conveyancers as a result of a Panorama programme screened three years ago.

“They have spent a period in excess of two years looking at the files held by Milne and Lyall because we were one of the leading exponents in that field, finally managing to produce an initial report that even their own lawyer stated he could not understand.

“At no time has any individual client made a complaint or claim about our actions in connection with these matters.”

They have acknowledged that the Thomson Trust benefited from the actions of the firm – enabling contributions towards Beaminster School of over £100,000 and the foundation of the Engineering Skills Centre in Weymouth of nearly £300,000.

“Local young people have also benefited directly and currently a further £100,000 is being offered to the Bridport Skills Centre Initiative.

“We believe that our interpretation of the rules relating to investment conveyancing at the time was correct.” They say that they have been unable to defend themselves because they could not afford the £150,000 to do so.

They said: “Ironically, the reason that we could not claim on our insurance for the cost of a defence is because there had been no claim made against us by any dissatisfied client.

“The SRA informed us that the only alternative if we did not wish or were unable to fight the case and Christopher White still needed to retire due to the illness of his wife, was to enter into an agreement with them that would bring the matter to an end, the terms of which would be dictated by them.

“Reluctantly, as the retirement was a necessity, we agreed to this as the only course of action we could afford.”