The former director of a struggling law firm who held back almost £500,000 in disbursements has agreed he should be struck off the roll.
Alan Joseph Fitzpatrick, sole equity and managing partner in Manchester firm Rowley Dickinson, admitted failing to tell the Solicitors Regulation Authority for five years that his practice was in financial difficulty.
The Solicitors Disciplinary Tribunal heard that problems came to light after Fitzpatrick entered negotiations to sell his firm to personal injury practice Thompsons. During due diligence it emerged that Rowley Dickinson had traded while in a precarious financial position and that Fitzpatrick had used money from professional disbursements to maintain the business. Thompsons made a formal report to the SRA on the same day that Fitzpatrick self-reported.
Fitzpatrick, a solicitor for 39 years, admitted immediately to using funds for disbursements to prop up the business and pay staff salaries since 2014. This had started because of trading difficulties following personal injury reforms, and the Bank of Scotland more than halving the firm’s overdraft facility. He said he did not realise what he was doing was a breach of the rules. Annual losses at the firm escalated from around £10,000 in 2015 to almost £90,000 by 2018.
Investigators found a cash shortage of around £485,000 in the client account caused by unpaid disbursements – 951 cheques, for sums ranging from £25 to £9,420 had not been presented.
Last November, Fitzpatrick himself replaced around £106,000 of the shortage. The following month the PI department was sold to national firm Simpson Millar, with £372,000 being paid to replenish the client account shortage.
The tribunal was satisfied that Fitzpatrick’s conduct was reckless and that no reasonable solicitor of his experience and position would have acted as he did, or allowed his practice to build up such debts.
In mitigation, Fitzpatrick said he sincerely regretted his actions and that there was never an intention avoid payment. In an agreed outcome with the SRA, Fitzpatrick was struck off and ordered to pay £20,611 costs.