PARTNERSHIPS: appeal case reveals debts of former Lawrence Graham solicitor

However much due diligence is done on laterally hired partners, it might ultimately not be enough, the senior partner of Lawrence Graham - from which former partner Michael Fielding allegedly stole up to 2 million - told the Gazette this week.

The admission came after a Court of Appeal ruling in a case involving Mr Fielding's wife showed that he was heavily in debt and threatened with bankruptcy before he moved to the London firm.

Sandra Fielding failed in her attempt to overturn a 3 million judgment against her in favour of the Royal Bank of Scotland, in a case that also cast light on the couple's roller-coaster existence of luxury and indebtedness.

The judgment revealed that in 1994 - before Mr Fielding joined Lawrence Graham - a substantial and prestigious London property and an apartment in Cannes were both registered in Ms Fielding's name, and the couple employed domestic staff and a driver.

But Mr Fielding had debts of 1.8 million, and the bank was threatening bankruptcy proceedings.

Ms Fielding contended in her action that the debt in their joint account represented borrowings of which she was unaware and did not authorise.

Nick Goldstone, a partner at London-based firm Magrath & Co, who acted for Ms Fielding, said: 'We are petitioning for permission to appeal to the House of Lords...

We want the House of Lords to rule because this case has potential application to thousands of joint account holders in this country.'

Of Mr Fielding's appointment at the firm, Lawrence Graham's senior partner, Bill Richards, said: 'Successful lateral hires have added much to the firm and helped it grow to its present position.

Michael Fielding joined in 1996 on the back of an impressive CV and several referees who spoke highly of him.

'Unfortunately there was a side to him that we neither knew nor discovered.

It put down a marker for us all that however much due diligence is undertaken, it may not, ultimately, be enough.'

According to the judgment, when Mr Fielding absconded in 2001, he left a letter 'in which he confessed to stealing clients' funds and stated his intention of being abroad "for some time"'.

Mr and Ms Fielding are both still believed to be living in Miami, Florida.

The Crown Prosecution Service is planning to extradite him (see [2003] Gazette, 31 October, 5).

The ruling came as news broke that a claim of almost 30 million was filed against Lawrence Graham late last year by former client London & Regional - alleging negligence and breach of contract resulting from Mr Fielding's drafting in 1999 of a joint venture agreement with airport operator TBI.

Mr Richards said the firm strongly resists the claim, considers it to be without merit, and has instructed solicitors to act on its behalf.

Jeremy Fleming