Solicitor faces £46k prosecution bill despite charges being found unproven

A solicitor cleared of three allegations related to borrowing from the Axiom legal fund has nevertheless been ordered to pay the costs of investigating him.

The Solicitors Disciplinary Tribunal found charges against Jason Libby could not be proved, after his firm had accepted £456,108 in funding from the ultimately doomed fund in 2012.

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But the tribunal said it had ‘some sympathy’ with the Solicitors Regulation Authority’s assertion that Libby, who ran Devon firm Drake Legal Limited, ‘had brought proceedings on himself’. 

It ordered him to pay both the investigation costs and half the costs of July’s four-day hearing – a total of £46,577. Libby had already spent £60,000 on defence costs since the SRA started investigating him four years ago.

‘Although the allegations had not been proved to the required standard that was not to say [his] conduct was entirely blameless,’ said the tribunal.

The regulator alleged it had been improper to take out the financing deal as Libby knew or was reckless to the fact his firm had not complied with the terms of a litigation funding agreement.

The SRA also alleged he had no intention to repay the money in time, misused funds, failed to do background checks on investment managers and placed his firm at risk.

The tribunal heard Libby, a solicitor for almost 15 years, ‘shut his eyes and ears to the obvious’ about how the fund, which attracted more than £100m from investors to finance legal cases and has led to a string of strike-offs for some of those solicitors involved, was being run.

Libby said he had sought finance to expand his practice, and at the time he was offered the terms he already had 100 cases in the pipeline.

The terms of the agreement restricted the use of money to disbursements in respect of a claim, and any advances were required to be repaid within 12 months. Drake ultimately borrowed £456,108 and was liable to repay £716,400 plus interest.

Libby admitted to the tribunal he was not a ‘textbook solicitor’ but insisted he had found no ‘red flags’ to suggest anything untoward with Axiom or its investment managers.

He regarded the funding arrangement as a viable proposition and was confident he could make a success of the arrangement.

Had he known the fund was going to crash, he added, he would not have signed the agreement. He confirmed to the tribunal he is in the process of repaying a total of £215,000, of which he had paid up to £140,000.

The tribunal found Libby could have taken greater care to ensure he was not in breach of the agreement, but that this carelessness was not deliberate. He had set a ‘realistic’ timeframe for repaying the loan and the tribunal was not satisfied he knew or was reckless to the fact the money was being used for other purposes than agreed.

‘[Libby] believed, albeit erroneously, that he was complying with the LFA,’ added the tribunal.

Libby was cleared of having known or been aware of any fraudulent activity, and it was accepted he would not have entered an agreement if he perceived there to be a risk of fraud.

‘While there had certainly been errors and examples of carelessness, the tribunal did not find that individually or cumulatively they amounted to a lack of integrity,’ the SDT judgment said.

The tribunal was not satisfied this was an ‘obviously dubious transaction’ or that Libby had ‘closed his eyes and ears’.

Two further allegations, relating to failing to pay money into a client account and failing to run his firm effectively, were also found not proved.

Libby’s lawyers said the second of these charges had the ‘unmistakable hallmark of a sweep-up, catch-all allegation in case the other allegations should fail’.

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Solicitor faces £46k prosecution bill despite charges being found unproven

‘Bureaucratic’ gateway barrier to discrimination help, solicitors warn

The process for obtaining state-funded legal help in discrimination cases is too bureaucratic, practitioners have told the Gazette, after MPs demanded urgent action to end a ‘shocking’ increase in workplace pregnancy discrimination.

In a report published this week, the Women and Equalities select committee said pregnant women and mothers were reporting more discrimination and poor treatment at work now than they did a decade ago, yet the number taking enforcement action is low. 

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‘The government must take urgent action to remove barriers to justice,’ the committee said, recommending a substantial reduction in the tribunal fee for such cases, and a review of the three-month time limit for bringing a tribunal claim.

While discrimination is one of the few civil law areas to remain within the scope of legal aid, solicitors say it has become difficult for people to seek advice.

Those needing help must go through the government’s civil legal advice mandatory gateway, delivered by the Civil Legal Advice helpline.

The gateway provides specialist legal advice primarily by telephone, online, and by post.

Applicants will initially communicate with operators trained to assess whether the user’s problem is within the scope of legal aid, in one of the areas covered by the advice line, and whether they qualify financially.

However, solicitor Habtom Tesfay, an employment specialist at Islington Law Centre in London, said applicants need legal advice just to make the initial phone call.

He said: ‘If you don’t explain your case properly, you might be told it is not within scope and that there is no legal help for it. What we try to do is effectively give people key words they need to say.’

Audrey Ludwig, director of legal services at Ipswich and Suffolk Council for Racial Equality (ISCRE), which runs a Tackling Discrimination in the East (TDE) legal service, said she had seen a 55% increase in the number of pregnancy- or maternity-related discrimination cases between 2014-15.

Last month TDE successfully secured £350,000 from the Big Lottery Fund to continue providing free legal advice for another three years. ISCRE estimates that it will be able to help 700 people.

Ludwig said the government’s gateway system was ‘front-loaded with bureaucracy’, noting that most people will initially want face-to-face advice and may have difficulties using a phone system. Nearly half of ISCRE’s clients have a disability.

Of the 700 people ISCRE predicts it will be able to help, Ludwig estimated that 50 will be pregnancy- or maternity-related discrimination cases.

Nimrod Ben-Cnaan, head of policy at the Law Centres Network, said making and evidencing a case was complex.

‘Employment tribunal fees are high, especially when your income has dropped during maternity leave,’ he added. ‘Yet employers increasingly wait until employees pay the tribunal fee before treating their claims seriously and considering settlement.’

The committee has urged the government to monitor access to free, good-quality one-to-one advice on pregnancy and maternity discrimination issues, and assess whether additional resources are required.

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‘Bureaucratic’ gateway barrier to discrimination help, solicitors warn

Herbert Smith Freehills opens China hub

International firm Herbert Smith Freehills has opened what is believed to be the first alternative legal services hub of its kind in China.

A 13-strong team of lawyers and legal analysts bilingual in Mandarin and English has been set up in the firm’s Shanghai office, it was announced today.

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The centre will use technology and processes used at its existing hubs in Belfast and Perth to process high-volume or document-intensive work.

Libby Jackson (pictured), global head of alternative legal services, said: ‘A complex transaction or dispute can involve the review of millions of Chinese-language documents that often must remain in China.

‘By equipping this new team with the technology and processes proven at our existing legal hubs in Belfast and Perth, we can offer clients a cost-effective way of tackling the document-intensive elements of these projects on the ground in China.’ 

Herbert Smith Freehills first opened an alternative legal services office in Belfast in April 2011, specialising in document management and review, principally for major contentious cases.

It now has centres in Brisbane, London, Melbourne, Perth and Sydney.

Other services provided by the 350-strong team - which also consists of legal assistants and technologists - include transaction support including due diligence, claims assessment, commercial contracts, and asset management for real estate clients.

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Herbert Smith Freehills opens China hub

Judge caught watching porn at work is rebuked by SRA

A judge removed from office for watching porn at work has received a further reprimand from the Solicitors Regulation Authority.

Warren Lewis Grant, who was admitted as a solicitor in 1989, was removed in March 2015 following 13 years as an immigration judge.

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The Judicial Conduct Investigations Office (JCIO) took action following the allegation Grant watched pornographic material on judicial IT equipment in his office.

The lord chancellor and lord chief justice were said to be satisfied the material was not illegal, but described it as an ‘inexcusable misuse of his judicial IT account and wholly unacceptable conduct’ for a judicial office holder.

In a regulatory settlement agreement published today by the SRA, Grant accepted that by using computer facilities to access inappropriate material in judicial time, he had failed to act with integrity and failed to behave in a way that maintains the trust of the public.

These amounted to two breaches of SRA principles.

The SRA said it accepted that at the time Grant was suffering from severe reactive depression, and that it was appropriate to issue a written rebuke.

The agreement added: ‘The SRA considers this to be a proportionate outcome in the public interest because Mr Grant’s conduct was deliberate or reckless and was neither trivial nor justifiably inadvertent.

‘The SRA has taken account of the action already taken by the JCIO, subsequent media coverage and the impact of that on Mr Grant when reaching this decision.’

Grant agreed to pay a contribution of £600 to cover investigation costs.

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Judge caught watching porn at work is rebuked by SRA

Firm boasts of 146 fundamental dishonesty wins in a year

A defendant firm has boasted it is the most prolific in the country for defeating claims using the fundamental dishonesty defence.

National firm Horwich Farrelly claims to have secured a ‘market-leading’ 146 findings of fundamental dishonesty since new legislation was introduced last year.

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Courts are now able to throw out personal injury cases where the claimant has been found to be ‘fundamentally dishonest’ during the course of proceedings.

Horwich Farrelly says its peak for successful defences in one day is eight – and the firm believes this track record proves naysayers wrong about the need for the law change.

Mark Hudson (pictured), counter-fraud partner at Horwich Farrelly, said: ‘When the concept of fundamental dishonesty was introduced, some commentators were quick to suggest that the sanction was of limited application in the fight against fraud.

‘With these results, which are almost certainly the most findings of fundamental dishonesty ever secured in a single day, we have shown this is demonstrably not the case.’

Although defendant firms have been quick to talk about their successful use of fundamental dishonesty, the courts have shown on different occasions they are prepared to favour claimants accused of fabricating elements of their case.

Horwich Farrelly’s recent roll call includes four victims submitting claims worth around £11,500 following an alleged shunt in the car park of Legoland in Windsor.

But Wandsworth County Court ruled all four claims to be fundamentally dishonest, including two discontinued prior to trial, and awarded indemnity costs of £10,000.

On another occasion, a claimant seeking damages for whiplash after a collision in Dewsbury raised suspicions having made claims relating to nine other alleged accidents.

The judge at Leeds County Court found the claimant to be creating evidence without proper thought and ruled the claim as being fundamentally dishonest.

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Firm boasts of 146 fundamental dishonesty wins in a year

Law Society urges profession to give views on ‘dramatic’ changes

The Solicitors Regulation Authority’s proposed reforms to the SRA handbook and accounts rules risk ‘weakening client protection’ and ‘damaging the reputation of the solicitor profession both at home and abroad’, the Law Society has warned.

The Society has urged solicitors to give feedback on the changes, and has released guidance, case studies and a template submission to help solicitors.

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An SRA consultation on new separate codes of conduct for solicitors and firms, which will give more freedom for solicitors to deliver legal services outside regulated firms, and a separate consultation aimed at simplifying the accounts rules will both close on 21 September.

‘The changes proposed by the SRA have huge implications for the solicitor profession and for clients. It is vital the profession has its say on these proposals,’ said Law Society chief executive Catherine Dixon.

‘Our template is designed to make that process easier, and maximise the number of solicitors contributing to this important consultation,’ she added.

‘We know solicitors from all over the country are gravely concerned about the SRA proposals as they fear that the reputation and standing of solicitors will be tarnished if these changes go ahead, resulting in two tiers of solicitors and vital client protections lost depending on where the solicitor is working.

‘Each solicitor will have their own experiences and draw their own conclusions on these proposals. A comprehensive response from the profession can only help improve the final decision.’

Designed to be easily tailored to reflect individual views, the template provides solicitors with a framework to make their views on the SRA’s proposed changes known. The Society is also running a survey of solicitors, roundtable discussions, and roadshows to inform its own full and evidence-based response to the consultation.

Dixon said the most effective driver of quality, innovative and sustainable legal services is the market itself.

She said: ‘The legal services market is continuously evolving to meet the needs of clients ever more effectively.

‘It is disappointing that nearly a decade on from the Legal Services Act, when the SRA became operationally independent, it is still critiquing the regulatory framework set out by parliament and overseen by the Legal Services Board.

‘Reforms currently proposed by the SRA on changing the SRA handbook and accounts rules, far from strengthening the market, risk weakening client protection and damaging the reputation of the solicitor profession both at home and abroad.’

Dixon continued:  ‘The solicitors’ regulatory and professional bodies are operationally independent and there is no call from the professions or consumers to change this.

‘The Law Society undertakes the vital role of representing, promoting and supporting the solicitor profession, with additional responsibilities to protect the public interest, support access to justice, individual rights and freedoms, and to uphold the rule of law.

‘This role is considered to be so important that it is enshrined in legislation.

‘The Competition and Markets Authority (CMA), in its drive to safeguard a well-functioning legal services market, is not planning to recommend a formal market investigation into the legal sector, nor does it in its interim report recommend regulatory reform, as the CMA shares our concern about the “risks with a wholesale change to a regulatory framework”.’

Stressing the importance of the legal sector to the economy, Dixon added: ‘Stability and certainty of regulation is vital to the healthy and continuous functioning of the legal services markets. The legal sector contributes £25.7bn to the UK economy, including £3.6bn in exports.

‘During a period of unprecedented change for Britain, it is vital that we maintain confidence in all our markets and especially the legal market given its significance to the economy and jobs.

‘As in any complex ecosystem, the balance can be easily disrupted. Where possible, solutions driven by the market are preferable to those imposed by regulation that may have unintended adverse consequences.

‘Well-functioning legal markets are in the best interests of clients and promote a strong and vibrant legal sector – they also underpin fair competition and access to legal services.

‘Any structural changes should only be imposed if market solutions have been exhausted, and the costs and benefits of proposals on consumers and the profession must be fully and transparently assessed.’

On the issue of pricing information, the Law Society chief executive added: ‘We support the objective of providing ever more useful information for clients on price and quality of legal services.

‘However, we would stress that such information does have to be helpful in enabling clients to make informed choices about the services they buy.

‘Legal services can vary widely, and can often be complex. Providing information such as average price will not enable clients to make meaningful choices.

‘We are therefore working together with the profession to support best practice and we will continue to support innovation that will help clients make informed choices about the legal services they buy, and also support a strong and vibrant legal profession.’

The SRA consultations can be found here. The regulator has said its reforms will make a significant contribution to helping with access to justice, and will assist people to access quality services from a solicitor.

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Law Society urges profession to give views on ‘dramatic’ changes

Victims should be given right to restorative justice, MPs assert

The Ministry of Justice should lay the groundwork for a legislative right for victims to access restorative justice services, an influential group of MPs said today.

Reporting on the effectiveness of restorative justice provision across the criminal justice system, the House of Commons justice select committee said it is too soon to introduce a legislative right now due to capacity issues, but that such a goal is ‘laudable and should be actively worked towards’.

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The committee recommends that changes should be brought in by the Ministry of Justice only once a minister has demonstrated to parliament that the criminal justice system has enough capacity to provide restorative justice services to all victims.

MPs also advise the ministry to produce an information-sharing template to overcome the ‘persistent obstacle’ presented by data sharing in delivering restorative justice.

The committee stops short of recommending legislation to require data sharing, but suggests it could be an option ‘which should not be excluded if non-legislative measures do not prove effective’.

Restorative justice is defined in the report as the process that brings those harmed by crime, and those responsible for the harm, into communication, enabling everyone affected by a particular incident to play a part in repairing the harm and finding a positive way forward.

Restorative justice is delivered mainly in five ways:

• Victim-offender conferencing: bringing the victim and offender, and their supporters together in a meeting;
• Community conference: bringing together members of a community affected by a particular crime and some or all of the offenders;
• ‘Shuttle RJ’: a trained restorative justice facilitator passes messages back and forth between the victim and offender, who do not meet;
• Neighbourhood justice panels: trained volunteers from a local community facilitate meetings between victims and offenders for low-level crime and antisocial behaviour; and
• ‘Street RJ’: usually facilitated by police officers between offenders, victims and other stakeholders in attendance at the time of the incident.

The committee concludes that restorative justice, particularly victim-offender conferencing, has the potential to offer ‘clear and measurable’ benefits to the criminal justice system and wider society.

However, undue reliance should not be placed on a claim made in a 2008 report that £8 is saved for every £1 spent, it warns.

‘This is because [the claim] arose due to a high-performing site within the Home Office trial, applies only to victim-offender conferencing and does not take account of differing levels of cost and effectiveness across different types of offences,’ the report states.

The committee found that restorative justice is currently subject to a ‘postcode lottery’. It expressed considerable concern that restorative justice is being used by police forces in cases of domestic abuse, which risks bringing it into disrepute.

The committee says it is ‘crucial’ that frontline police officers ’are fully informed of the risks for vulnerable victims’ in such cases.

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Victims should be given right to restorative justice, MPs assert