Thousands of families across the UK remain stuck in “legal limbo” almost five years after the collapse of Scottish law firm McClure Solicitors, according to leading lawyers.
WW&J McClure went into administration in April 2021, leaving a trail of complaints about property and assets held in trust. When work in progress and the McClure assets were moved to another firm, it emerged that thousands of family protection trusts were found to be potentially invalid and needed to be redrafted.
The firm had an estimated 88,000 clients in England and Wales before its collapse and it is believed that around 18,000 family protection trusts were taken out in this jurisdiction, with thousands of clients expected to make compensation claims.
Some families even say they’ve been unable to sell properties because former McClure solicitors were named on the deeds.
McClure Solicitors was founded in Greenock but it also had six offices in England and Wales and was licensed to practise on both sides of the border.
There has been discussion of a potential class action against McClure and test cases have been identified. The Victims of McClure Solicitors group estimates that tens of thousands of people are still unaware the firm went into administration.
The Solicitors Regulation Authority is investigating the former partners of WW&J McClure but it has limited scope for action, given that the three directors of the firm have all taken themselves off the roll.
Instead, the Legal Ombudsman is poised to deal with complaints. The ombudsman scheme has provision for clients to make a claim against the insurance policy of a closed firm, and Solicitor-General Sarah Sackman KC has advised former McClure clients to explore this route.
“The collapse of McClure Solicitors continues to reverberate across the UK, leaving thousands of families in legal limbo,” says Michelle Seddon, partner in the private client team at national law firm Clarke Willmott.
“McClure’s downfall stems from widespread issues with its family protection trusts. These were marketed as a means of safeguarding assets and reducing inheritance tax, but many were poorly drafted or legally ineffective.
“When McClure folded, around 20,000 trusts were left in limbo. Clients now face the emotional and financial strain of untangling their affairs, often without knowing where to turn. Clients are understandably distressed and some are discovering that properties placed in trust cannot be sold.
“At Clarke Willmott we’re already supporting affected individuals and families across England and Wales by reviewing and if necessary, redrafting their trusts to ensure legal compliance and protect their wishes. We’re also providing property and probate advice to clients whose home or assets are caught in a disputed trust, enabling them to regain control.”
Emma Barry, senior associate in tax and trusts team at Clarke Willmott, added: “I’ve seen first-hand the chaos which some families have faced due to the mis-selling of these McClure ‘Family Protection Trusts’.
“I have concerns for those that are not aware of what is lurking in the unknown. These Trusts are subject to Trust Registration requirements and other tax obligations which the Trustees/families are likely to be falling short of, which will expose these vulnerable individuals to penalties.”
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