Almost £13m has been paid in four years to thousands of former clients of collapsed Midlands firm Wolstenholmes, the Gazette can reveal.
The Solicitors Regulation Authority intervened to close down the conveyancing firm on Christmas Eve 2009, and has since delivered sanctions against five solicitors.
A Freedom of Information request to the SRA by legal consultant Ed Austin, seen by the Gazette, has revealed that 2,462 claims have since been received by the Compensation Fund following the intervention. Payments totalling £12.72m have been made in the space of four years.
The figures mean Wolstenholmes has been by some way the biggest ever financial burden on the legal profession – for every practising solicitor who contributes to the Compensation Fund, £97 has been paid to former Wolstenholmes clients.
There are 17 claims still under investigation, with a total outstanding claim value of £250,800.
The SRA has taken disciplinary action against five solicitors, who faced a range of allegations at the Solicitors Disciplinary Tribunal ranging from dishonesty to behaving in a way likely to diminish trust.
Imran Hussain and Asma Qayum were struck off and ordered to pay costs of £137,229 and £91,905 respectively.
Helen Murgatroyd was suspended for two years and made to pay costs of £34,898. On expiry of suspension, she may not practice as a sole practitioner or as a partner in any law firm and may only work as a solicitor in employment approved by the SRA.
Bilal Khawaja was suspended for one year and Bobby Shabbir suspended for six months, with costs of £53,127 and £34,898. For both the same conditions apply as Murgatroyd when their suspension is lifted.
A sixth solicitor was given dispensation to appear in front of the SDT at a later date after his original hearing was postponed due to illness.
The SDT hearing earlier this year heard Wolstenholmes had been a ‘conventional Midlands firm’ until 2006 when it began a period of expansion, based on internet marketing.
Timothy Dutton, QC for the SRA, told the hearing that there had been ‘a total loss of control’ of accounting.
When regulators intervened in December 2009 they found computers had been ‘wiped clean’… ‘not only had the information disappeared but computers were missing their hard drive’, the tribunal heard.