A solicitor who unwittingly allowed her firm to misuse £1.6m from the notorious Axiom fund has been fined £50,000.

Saimina-Jan Virmani, 35, a member of Lancashire firm Joseph Frasier Solicitors, was 'duped' into accepting the loan and admitted she had little experience of commercial funding. Her conduct was found to be reckless by the Solicitors Disciplinary Tribunal.

Virmani maintained she was a 'thoroughly decent and hard-working solicitor’ who borrowed money in the belief this was an 'ordinary and bona fide' financing operation for the firm, which specialised in noise-induced hearing loss claims. Her lawyer claimed she had been misled into borrowing the money for use as general practice funding.

The £120m Axiom Legal Financing Fund was a Cayman Islands company established by Timothy Schools, a former solicitor who was struck off in June 2014. Misuse of funds which were intended to finance legal claims has led to a string of disciplinary cases. A Serious Fraud Office probe into Axiom remains ongoing.

In an 84-page judgment published following a four-day hearing in June, the tribunal said Virmani had partly used the Axiom funds: to discharge a £68,000 debt to HM Revenue & Customs; fund general overheads; and pay for a new case management system. This was contrary to the terms of the written funding agreement.

The loans were restricted to 'permitted costs' relating to 'permitted uses' which would be recovered from the losing party if cases were won and covered by ATE insurance if the case was lost.

The SRA submitted Virmani knew or was reckless to the fact the firm was not complying with the terms. She failed to make any or sufficient enquiries about the fund and whether investors were being defrauded.

Virmani, who had no formal experience or training in commercial borrowing, denied wrongdoing. She had been approached about the funds at a social event and told the fund had already lent monies to large firms.

The tribunal found Virmani's use of the monies to pay off debts and fund general expenses was 'wholly inconsistent' with the terms of the agreement. It was 'unreasonable' to take such risks over external finance and she had acted recklessly on the basis of non-compliance with the terms.

The tribunal said Virmani had been 'duped at the outset, she had been mistaken in her beliefs, she had been careless and she had been reckless'. But it stressed that the allegation of dishonesty was not proven.

In mitigation, Virmani had continued to work closely with the SRA and had safeguarded the future of the firm, its clients and staff. The firm had won several awards since the period in question and she had placed the firm first, even at a time of serious personal difficulties.

The tribunal said her actions were not deliberate and had occurred over just a few months in 2012. She had been deceived by at least one third party and had an unblemished record.

'The tribunal considered [Virmani] had learnt a salutary lesson,' added the judgment. 'However, the tribunal did not expect this sort of behaviour from solicitors and public confidence in the profession required a significant sanction.'

Virmani was also ordered to pay £60,000 costs.