Christopher Frederick Orford Hutchins, Amanda Jane Swain and Spencer Paul McGuire

• Application 10233-2009
• Hearing 2 March 2010
• Reasons 30 April 2010

The SDT ordered that the first respondent (admitted 1976), of Crawley Down, West Sussex, RH10, should pay a fine of £20,000; that the second respondent (admitted 1986), of E & J Law LLP, 69-71 High Street, Thornton Heath, Surrey CR7 8RY, should pay a fine of £15,000; and that the third respondent (admitted 1996), of Welling, Kent DA16, should pay a fine of £15,000.

Contrary to rule 7 of the Solicitors Accounts Rules 1998, the respondents had failed to remedy breaches promptly upon discovery; they had withdrawn and/or transferred monies from client account other than as permitted by rule 22 of the rules; they had acted contrary to rule 1(a), (c) and (d) of the Solicitors Practice Rules 1990 and/or rule 7 of the r in that they had utilised monies raised from the sale of their head office to repay bank loans and to reduce the office account overdraft, in preference to their financial liabilities and responsibilities to clients, and in circumstances when such funds could and should have been used to rectify and/or reduce the shortage on client account; and they had failed to comply with a direction of an adjudication panel dated 14 December 2005.

The SDT found that the respondents had been seriously negligent and had been reliant upon a defaulting partner. They had been reckless and foolish. It went to their credit that they had admitted the facts and the allegations. The SDT recognised that what had happened and the fact that the respondents had found themselves before their professional regulatory tribunal was a great tragedy for them. However, it considered that although the shortfall on client account had not been of the respondents’ own making, it had been their responsibility to put it right.

The SDT took a serious view of the fact that the respondents had realised a partnership asset, the freehold of their premises, and had not immediately applied that money in reduction of the shortfall on client account. The SDT noted, however, that the respondents had mortgaged their domestic properties and that each of them had raised funds which had been applied in the reduction of the shortfall. All of the respondents had been at fault for not taking a closer interest in the financial affairs of their firm and for not insisting on seeing the firm’s accounts, and the SDT found it extraordinary that the respondents appeared not to have been required by their accountants to sign the firm’s final accounts, which had been produced to demonstrate a clear bill of health when there were serious irregularities. The SDT recognised that the respondents had made efforts to secure payments from their professional indemnity insurers and had tried to negotiate terms with the Law Society’s Compensation Fund. The SDT noted their view that had they had the resources they would further have pursued their indemnifiers and their accountants whom they believed had been negligent. The SDT concluded that it would be both appropriate and proportionate to impose fines upon each of the respondents. The level of fines reflected the fact that the first respondent had been the more senior partner, even though the three respondents had been equal equity partners in the firm.

The SDT took the view that such fines had to be significant in order to demonstrate to the public and to the profession that it was unacceptable for solicitors to try to keep their firm running rather than do everything possible to replace a shortfall in clients’ money. Claims had been made upon the Law Society’s Compensation Fund. The proportions of the costs to be paid by the respondents were to reflect their respective levels of culpability: 40% was to be paid by the first respondent, and 30% by each of the second and third respondents. Even though the SDT had indicated the proportions in which the costs were to be paid, nevertheless the liability for costs should be on a joint and several basis.