A law firm owner who secured £19m from litigation funders for mortgage refund cases which never went anywhere - then spent some of the money on office expenses – has been struck off the roll.
The Solicitors Disciplinary Tribunal found that Roger Brian Allanson, a partner with now-closed Lancashire firm Allansons, gave the ‘very clear’ impression in marketing brochures that the only risk from the scheme was that there would be no profit.
He went on to receive more than 4,700 investments of £4,015 each, stating this was for the cost of a specialist litigation report. Allanson had also given the impression that investments would pay off within 18 months.
In the event, no case had produced a return in the two-and-a-half years before the firm was shut down by the SRA. Some of the money invested was also used to pay the office credit card bill and £120,000 was paid into Allanson's own account). Allanson did not dispute making the bank transfers but denied misuse of the monies.
The tribunal rejected Allanson’s evidence that the funding agreements extended to covering his own costs and said there was ‘no reasonable explanation’ for him using the money for expenses.
The judgment concluded: ‘While [Allanson] said that he was motivated by a wish to help others, he had primarily been motived by financial gain. He had been motivated to mislead in order to attract ‘investment’. This was a misnomer.
‘His conduct was entirely planned. The litigation funders had placed their trust in [him] when they had given him the funds and he had failed to honour their trust.’
The tribunal heard that Allanson, admitted in 1986, had started to take on claims relating to allegations of breach of contract by mortgage providers in 2016. He took cases under conditional fee agreements whereby he took 25% of any payments received. He entered a contract with a company acting as an ‘administration agent’ for the claims and needed funding to pay for the costs of reports and processors to manage the claims process.
Promotional brochures promised funders an estimated 40% return over 18 months and said the £4,000 investment covered the fees of an initial expert audit report which was refundable if the claim was unsuccessful.
Allanson, who represented himself, told the tribunal he had not taken advantage of funders and had acted in the best interests of his clients at all times. He denied that marketing material was misleading and denied saying there was no risk.
The tribunal ordered that he be struck off and pay £104,000 in costs. Allanson has 21 days from the publication of the judgment to appeal.