Decisions filed recently with the Law Society (which may be subject to appeal)
Roger Brian Allanson
Hearings 25 January-1 February 2021
Reasons 15 April 2021
The Solicitors Disciplinary Tribunal ordered that the respondent should be struck off the roll.
While in practice as a partner at Allansons LLP, the marketing material provided by the respondent to potential litigation funders was misleading in that the litigation funding brochure (LFB) gave the impression that there was no or little risk to the litigation funders of losing their original investment; that funders would receive their returns within approximately six to 18 months; that the £4,000 provided by the litigation funder would pay for the initial expert report and Allansons would cover all other costs; that more than one barrister had assessed the likelihood of success in court of any of the claims to be 75%; that Allansons had a proven track record in using AMS’s methodology; and that in using such material the respondent had breached principles 2 and 6 and outcome 8.1 of the SRA Code of Conduct 2011. He had acted dishonestly.
The respondent had misused funders’ monies in that by agreement with PSP (administration agent for the claims) the firm had retained either £952.50 or £152.50 of each £4,015 of funding; he had transferred around £121,974.44 of the funders’ monies to his personal account on 14 August 2018; he had transferred around £1,535.91 of the funders’ monies to the firm’s office account credit card on 14 August 2018; he had transferred around £25,493.61 of the funders’ monies to an unknown recipient on 14 August 2018; he had transferred around £48,996 of the funders’ monies to a second unknown recipient on 14 August 2018; he had transferred around £20,000 of the funders’ monies to HJ Ltd on 16 August 2018 for introduction and consultancy advice; he had transferred around £16,500 of the funders’ monies to PSE on 17 August 2018 for ‘card merchant charges’; he had transferred around £72,460 of the funders’ monies to QLP (Quill Pinpoint) on 31 October 2018 to pay the firm’s PII premium; and he had transferred around £40,000 of the funders’ monies to introducers; thereby breaching principles 2 and 6 and outcome 11.1. He had acted dishonestly.
He had failed adequately to manage the progression of miscalculated mortgage payments claims (MMPs), thereby breaching principles 4, 5, 6 and 8 and outcome 1.5. He had acted with manifest incompetence.
He had sent emails to Mr AL, a litigation funder, that were inappropriate, thereby breaching principle 6.
He had failed to maintain properly written-up accounting records, thereby breaching principles 4, 6 and 8 and rule 1.2 (e) and 29.1 of the Solicitors Accounts Rules 2011.
He had failed to maintain client ledgers for over 4,000 clients in the MMP claims, thereby breaching principles 4, 5, 6 and 8 and rule 29.4 of the rules.
He had failed to maintain accurate accounting records in that, at 31 December 2018, the Yorkshire Client Account Bank Reconciliation had contained approximately 1,530 unreconciled transactions totalling £572,104.15; and approximately 155 unreconciled adjustments totalling £165,347.39, thereby breaching principles 6 and 8 and rule 29.1 of the rules.
He had failed to remedy the following breaches of the rules identified by the firm’s accountants in their 2017 report, namely the bank reconciliations included unknown adjustments; the bank reconciliations included unreconciled items; and the bank reconciliations that showed a difference between the total of client balances and the total of balances shown on the client ledger on both testing dates, thereby breaching principles 6 and 8 and rule 7.1 of the rules.
He had failed to complete client account reconciliations every five weeks, thereby breaching principles 6 and 8 and rule 29.12 of the rules.
While the respondent had said that he was motivated by a wish to help others, he had primarily been motivated by financial gain, and to mislead in order to attract ‘investment’. The money was in fact to be used (to his knowledge and contrary to his representations to the litigation funders) to fund the progress of the work through people to whom he outsourced the work, and over whom he had little if any control.
Tremendous harm had been caused to the profession and to the litigation funders who had been misled, and to the clients as their claims had not been advanced. The misconduct was aggravated by the respondent’s substantial dishonesty. His conduct was deliberate, calculated and repeated. It had persisted over a period of time, during which time litigation funders had been taken advantage of. There had been concealment of wrongdoing as was clear from the correspondence with the litigation funders, and by way of the misrepresentations in the LFB.
The misconduct was at the highest level and the only appropriate sanction was a strike-off. There were no exceptional circumstances that would make such an order unjust.
The respondent was ordered to pay costs of £103,868.
Michael John Baggott
Hearing 16 March 2021
Reasons 7 April 2021
The SDT ordered the respondent to pay a fine of £2,001.
The respondent had failed to provide a specimen of breath for analysis in the course of an investigation into whether he had committed an offence under section 3A, 4, 5 or 5A of the Road Traffic Act 1988. He had thereby breached principles 1 and 6 of the SRA Principles 2011.
He had failed to report his conviction dated 1 May 2019 to the SRA, thereby breaching principle 7.
The extent to which the respondent’s actions had been deliberate was open to serious doubt. His level of culpability was assessed as low. He had not caused harm to anyone else by his actions but he had damaged the reputation of the profession. As to aggravating factors, a criminal offence had been committed and the respondent’s failure to notify it to the applicant had lasted several months although the SDT was not certain that the failure had been calculated.
The respondent had shown some indication of remorse but that did not really amount to insight as his state of mind at the time as he described it meant that he was not thinking rationally.
A fine of £5,500 would be an appropriate sanction. The respondent had been given every opportunity to provide information about his financial circumstances but had not formally done so. However, the SDT had information from third parties which indicated the respondent’s reduced circumstances: that he was not presently working, was not in possession of a practising certificate and sometimes at least was homeless.
In the light of the respondent’s financial situation the amount of the fine was reduced to £2,001.
The respondent was ordered to pay costs of £2,425.
Hearing 29 March-1 April 2021
Reasons 7 May 2021
The SDT ordered that the respondent should pay a fine of £35,000, and that he should be subject indefinitely to the following conditions: that he might not (i) practise as a sole practitioner or sole manager or sole owner of an authorised or recognised body, or as a freelance solicitor, or as a solicitor in an unregulated organisation; (ii) be a partner or member of a limited liability partnership, legal disciplinary practice or alternative business structure or other authorised or recognised body; (iii) be a head of legal practice/compliance officer for legal practice or a head of finance and administration/compliance officer for finance and administration; (iv) hold client money; (v) be a signatory on any client account; (vi) work as a solicitor other than in employment approved by the Solicitors Regulation Authority; with liberty to apply to vary the conditions set out above.
While the director and owner of AA Solicitors Limited, the respondent had caused or allowed the firm to act in one or more road traffic accident claims which were fraudulent, or alternatively were suspicious and carried the hallmarks of a fraudulent claim, causing third-party insurers to pay costs and damages to the firm and to the purported claimants, thereby breaching principles 1, 2 and 6 of the SRA Principles 2011. He had acted recklessly.
He had failed to identify his RTA clients by obtaining proof of identity, thereby breaching principles 2, 6 and 8 and failing to achieve outcomes 7.2 and 7.3 of the SRA Code of Conduct 2011. He had acted recklessly.
He had failed to verify the identity of the firm’s source of RTA referrals (Mr A), thereby breaching principle 8. He had acted recklessly.
The respondent’s motivation was financial. Contrary to his assertion that he had not profited from the pursuit of fraudulent claims, the fees from the RTA personal injury claims accounted for a not inconsiderable percentage of the firm’s turnover (24%).
Claims had been advanced with rapidity with many, if not all, emanating from a single source of referral: Mr A. The respondent had seen fit to negotiate with Mr A a discounted fee arrangement for the generation of these instructions.
The respondent’s actions were not spontaneous. It had been a planned course of conduct in which there had been a continuing arrangement with Mr A over a period of four years.
The respondent’s culpability was high. There was evidence of direct harm to the defendant insurers who had paid out costs and damages on fraudulent claims.
There was no evidence that the respondent had made good the losses incurred by the defendant insurers. There had been much to be suspicious about, and the respondent should have ceased acting and reported his potential breaches to the regulator, but he had done nothing, despite having been warned by the insurers about the suspicious nature of some of the claims.
Having made findings of lack of integrity and recklessness, the SDT considered that a fine within Indicative Fine Band 4: ‘conduct assessed as very serious’ would be appropriate, and that the imposition of a restriction order was a necessary and proportionate sanction, given that the misconduct had occurred when the respondent had been a sole practitioner and also the compliance officer for legal practice and compliance officer for finance and administration of the firm, and that he had failed to bear the responsibilities which those roles had placed upon him.
The respondent was ordered to pay costs of £31,560.
Peter Matthew James Gray
Hearing 8-16 March 2021
Reasons 5 May 2021
The SDT ordered that the respondent should be struck off the roll.
While in practice as a solicitor and a partner in Gibson Dunn & Crutcher LLP, and in the course of acting in litigation before the High Court on behalf of client A, the respondent had sworn an affidavit in support of client A’s application to the High Court for a freezing injunction and other orders, which was misleading as to matters of fact known to the respondent, and known by him to be material to the application, thereby allowing the court to be misled, and breaching principles 1, 2 and 6 of the SRA Principles 2011 and outcomes 5.1 and 5.2 of the SRA Code of Conduct 2011. He had acted dishonestly.
During the hearing of the application before the High Court, he had allowed submissions to be made to the court by leading counsel acting for client A which were known by the respondent to be misleading, thereby breaching principles 1, 2 and 6 and outcomes 5.1 and 5.2 of the SRA Code of Conduct 2011. He had acted dishonestly.
He had sent, or caused or allowed to be sent, written correspondence to Byrne and Partners that he knew to be misleading, thereby breaching principles 2 and 6 of the SRA Principles 2011. He had acted dishonestly.
He had sworn an affidavit in litigation before the High Court which was known by the respondent to be misleading, and in doing so had breached principles 1, 2 and 6 and outcome 5.1. He had acted dishonestly.
The respondent had deliberately deployed a misleading strategy in litigation which had resulted in the High Court and others being misled as to evidence relied upon to obtain a global freezing injunction. The misconduct found was of the utmost seriousness in that it breached the fundamental duty incumbent on him as a solicitor of the Supreme Court to conduct litigation fairly and not to mislead. Culpability for that conduct rested solely with the respondent.
Given the seriousness of that misconduct, the only appropriate sanction was to strike the respondent from the roll. There were no exceptional circumstances such that that would not be an appropriate sanction.
The respondent was ordered to pay costs of £42,525.