A partner with top-25 firm DWF has been fined more than £14,000 after he admitted failing to check money was properly due to a property developer client before authorising payments amounting to more than £1.6m. The client subsequently went into administration.
Mark Andrew Shepherd, admitted in 2002, was alleged to have failed to check that deposits and instalments from property buyers were properly due to the client before authorising payments from the client account.
An application for an agreed outcome, in which Shepherd admitted the allegations, was lodged two days before a substantive hearing at the Solicitors Disciplinary Tribunal. The SDT judgment said: ‘The application had been made very late and on the face of it there appeared to be no reason why it could not have been made earlier.’
According to the judgment, the firm had been acting for a property developer and was responsible for holding deposits and instalments toward the purchase of residential units from buyers’ solicitors. The agreed outcome said €2,645,713.56 (£2.2m) had been paid ‘erroneously to the seller’.
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It added: ‘The firm pursued its own client via a letter of claim for repayment of these sums, and was informed its client had gone into administration.' The firm made good the payments to the would-be buyers, claiming on its professional indemnity insurance.
In non-agreed mitigation, Shepherd said he had ‘acted, at all times, in good faith’. He had made ‘open admissions and demonstrated insight as well as apologising for his conduct’. He had ‘made no actual or intended gain…and expressed an apology for any distress caused to buyers’.
The agreed outcome added: ‘The harm to the buyers…has been fully mitigated as financial losses incurred have been remedied - the firm ensured that all improperly paid monies were repaid to buyers by itself and via its indemnity insurance company without challenge.’
Allowing the agreed outcome, the SDT said: ‘As a partner of the firm the respondent had ultimate responsibility for final sign off on the payment authorisations and given the very large sums of money involved the respondent should have exercised greater care and scrutiny before authorising their release. However, it was to his credit that he had self-reported the matter and made appropriate admissions.'
The tribunal accepted that the sanction was 'reasonable and proportionate' to mark the seriousness of the misconduct, protect the public and maintain the reputation of the profession. Shepherd was ordered to pay a £14,168 fine and £19,000 costs.
