An immigration solicitor whose foundering firm kept legal aid money intended for paying disbursements has been fined by the Solicitors Disciplinary Tribunal.
Lawrence Lupin said his firm used the £180,000 not paid on 473 matters as part of its running costs, although he did not know this was happening at the time.
The Solicitors Regulation Authority submitted to the tribunal that Lupin’s firm had essentially ‘gone out of financial control’, borrowing £340,000 three months before liquidation and owing creditors £1.1m when it collapsed with assets of £12,000.
Admitted in 1992, Lupin practised on his own account from north west London under the name Lawrence Lupin Solicitors for 20 years before the firm was liquidated.
He told the SRA his accounting problems started in 2012 when the firm, which dealt exclusively with immigration matters, had to repay the Legal Aid Agency £480,000 over two years. Struggling to remain within its overdraft, the firm borrowed more than £400,000 in two instalments from a lender called Funding Circle.
Lupin said that instead of making sure that the firm paid disbursements for which it had received money, he spent his time on fee earning. It was only in July 2017 that he became aware disbursements were not being paid and the firm reported itself to the SRA following an external review of the its position.
By the time the firm passed a resolution for its voluntary winding-up, it owed £150,000 to employees, £365,000 to lenders and almost £600,000 to experts and counsel.
As at September 2018, the firm owed an interpreting company almost £26,000 based on 260 unpaid invoices. The firm had money for at least 58 of these invoices on the office account. The SRA said that Lupin was in breach of its rules by leaving a debt to a third party at the time the firm went into liquidation.
Lupin, who admitted misconduct, agreed with the SRA he should be fined £15,000 and pay £10,000 costs – an outcome endorsed by the tribunal. His misconduct was mitigated by him rectifying many of the breaches, being open and frank and showing genuine insight, and by him having no adverse regulatory history.