Dozens of staff turfed out of their office when the Solicitors Regulation Authority shut their firm down are owed three months’ redundancy pay, an employment tribunal has ruled.
Employment Judge Ainscough found that the 39 named employees at Liverpool claims firm BPS Solicitors were all told at a meeting last August that the SRA had ordered it to cease trading. All staff were immediately told to leave the premises.
The judge found there was no proper warning or notice given to the workforce, nor any consultation about redundancies. The staff had no trade union recognised for collective bargaining, consultation or negotiation.
The firm was found in breach of its duty under section 188 of the Trade Union and Labour Relations Act 1992 and the claimants were each awarded payment for the maximum protect period of 90 days.
BPS Solicitors, one of two Liverpool firms shut down in a single day by the SRA, is currently in liquidation. A statement of its affairs published in January shows that employee arrears were estimated at around £60,000.
Its biggest debt was a £12m sum owed to litigation funders. The firm also owed £144,000 to HM Revenue & Customs, £78,000 in counsel fees and almost £800,000 to trade creditors.
The business had work in progress on the client ledger worth more than £9m but it is uncertain what this will realise, and any unsecured creditors are unlikely to be paid anything.
If there are not sufficient funds to pay the employment tribunal awards, payments will be made by a government agency. The Secretary of State for Business and Trade was added as a party in the tribunal claim as a statutory guarantor.
In shutting down BPS Solicitors, the SRA said it was satisfied that Alistair Davies, manager of BPS Solicitors, had contravened the Administration of Justice Act 1985, although there are no suspicions of dishonesty of accounts rules breaches.
BPS had taken on some of the work of McDermott Smith when that Liverpool firm appointed administrators earlier in the year. Davies had joined BPS from McDermott Smith and was initially suspended following the SRA’s intervention, but in February this year the regulator granted him a practising certificate on the condition that any employment be pre-approved and he cannot hold or receive client money or act as a firm’s compliance officer.
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