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Partnership Act 1890 & the Solicitor’s Regulation Authority

Comment 24th July 2010

1. The Partnership Act 1890 should be amended to remove the liability of individuals for the professional discisplinary act(s) of other partners in their firm, unless that individual consented to the act(s), authorised the act(s) or should reasonably have known of the act(s) and failed to take reasonable steps to prevent the act(s) occurring.

2. The Solicitor's Regulation Authority and the Legal Complaints Service should merge.

3. The Solicitor's Regulation Authority should moderate it's regulation of the legal profession.

Why does this matter?

On 01/06/06, I commenced employment at a firm of Solicitor’s called Capstone. I know now that the firm was owned and controlled by Samuel Okoronkwo (“SO”), who is a qualified Barrister. However, at all material times, SO  withheld his ownership and control from me.

On 03/11/06, I became a salaried partner at Capstone, after being offered the position by SO . However, my position and authority did not change at all. As a result, I resigned my position as a salaried partner on 25 April 2007 and I left Capstone altogether on 28 July 2007.

Prior to this, on 13/03/07, the Solicitor’s Regulation Authority (“SRA”) had begun investigating Capstone, as a result of SO’s involvement there. Again, unknown to me, SO had set up 2 previous firms of Solicitors from the same offices as Capstone, which had been shut down by the SRA. Due to his involvement in these firms, SO had been made subject of an Order preventing him being employed by a Solicitor’s firm without the SRA’s approval. Approval had not been granted for SO to be employed at Capstone, prompting the SRA’s investigation.

At the end of their investigation, the SRA held that Capstone was not being run properly and that SO had been working at Capstone without their permission. The SRA shut Capstone down in August 2008.

Despite my departure from the firm prior to it being shut down, my total lack of knowledge or involvement in the running of the firm, the fact that I was only a salaried partner for a very short period of time, there were no problems with my personal conduct and the firm being owned and run by SO, the SRA prosecuted me for acts of the firm, as I was a partner at the time of those acts. Specifically, the allegations against me were that:

  1. That the books of account of Capstone had not been properly written up.
  2. That charges had been made to conveyancing Clients as disbursements, when they should not have been.
  3. That there had been unreasonable delay in conveyancing matters.
  4. That I permitted SO (the owner and controller of Capstone) to have undue influence and control over Capstone.
  5. That I asked the SRA for permission to employ SO at Capstone.

At the Solicitor’s Disciplinary Tribunal (“SDT”) it was my assertion that I had personally done nothing wrong, nor did I have any knowledge of any wrongdoings. Indeed, the SRA specifically admitted that I had done nothing wrong. However, the SDT upheld the allegations against me and I was fined £5,000.00 and held liable for the SRA’s costs of £17,115.82. Further, my legal career has now been ended as nobody will employ a Solicitor who has been prosecuted by the SDT.

I trust you will see that the SRA’s case against me was wholly unfair. I had been misled and taken advantage of by SO and held out by him to deal with the liabilities of his firm.

It is my submission that the sheer unfairness of the situation is sufficient to consider amending the rules which govern the SRA and the Partnership Act 1890.

Further reasons are:

Costs of prosecutions

The SRA’s costs of their investigation were £8,000.00 and the costs of the prosecution were £21,859.70. I was only able to pay a fraction of these costs and the other partner at Capstone could not pay anything as he was bankrupt. As such, the SRA recovered a small amount of £29,859.70.

In many other cases, the SRA make a small or no cost recovery as the Solicitor(s) are bankrupt or of substantially reduced means, as a result of the SRA proceedings against them.

This is a huge costs bill for the SRA and should make them reconsider their prosecution policy.

Feeling within the legal profession that the SRA has gone too far

I have a many pieces of correspondence from members of the legal profession, with whom I have discussed my situation. Each person feels that I have been treated totally unfairly but that simply, there is nothing I can do about it.

Most Solicitors feel that the SRA have overstepped their role. However, as Solicitors are governed by the SRA, they are reluctant to stand up to the SRA or to highlight the awful treatment they have received.

Wastage in having 2 bodies governing the legal profession

The Legal Complaints Service (“LCS”) deal with complaints made regarding the service received from Solicitors. The SRA deal with disciplinary issues, in light of the Solicitor’s Code of Conduct.

I have correspondence from the Legal Complaints Service (“LCS”) regarding complaints made against Capstone where the LCS took the view that, despite the fact that I was a salaried partner at Capstone, I should not be held liable for these complaints as they did not concern my conduct at all.

I cannot see why the SRA did not take a similar approach when considering whether to prosecute me.

The SRA has lost track of all reality

The SRA’s prosecution policy is target led. Essentially, they set a minimum number of prosecutions each year. Thisis a ludi crous policy. The SRA, or any prosecuting body, must only be allowed to prosecute worthwhile cases that are in the interest of the public and the legal profession.

I believe that the prosecution policy is the reason why I was prosecuted. Under strict partnership rules, I was liable for the acts of Capstone. In reality I had carried out none of the acts and was merely held out as a partner of Capstone by SO. In effect I was a “sitting duck”.

I draw your attention to a similar case involving an ex-employer, Mary Knowlson. Her firm had carried out minor breaches of the Solicitor’s Code of Conduct in that they had not advised Clients how their case had been referred to them. At the time, the issue of client referrals was a very new issue and many firms were equally guilty, albeit unknowingly. Despite this and the fact that Mary admitted the breaches immediately, the SRA prosecuted Mary and she was found guilty, held liable for the SRA’s costs and incurred her own fees in excess of £20,000.00.

At every stage of the prosecution, Mary was living with breast cancer, to which she has subsequently succumbed.

Even writing this now, I am filled with anger at the SRA for prosecuting Mary at all, in light of her firm’s miniscule breaches. However, to prosecute her whilst she was suffering with cancer as well is shameful and in my opinion, could only have been done to meet the SRA’s prosecution target.

Had the public been made aware of this case, my case, countless other cases and the SRA’s prosecution policy, I trust that you will appreciate the scope for severe negative publicity against the SRA, Law Society and the government 

SUGGESTED AMENDMENTS

The SRA, or any governing body, should not discipline an individual purely because they are a partner in a firm where wrongdoing may have occurred. In order to achieve this, I suggest that both the Partnership Act 1890 and the rules governing the SRA are amended.

Partnership Act 1890

Life has changed immensely since 1890. In particular, professional discipline now represents a substantial area of law, with the last 5-10 years seeing a huge increase in legislation and regulations relating to professional discipline. As a direct result, I have witnessed the marked rise in the number of Solicitors firms and Barristers chambers dealing exclusively in professional discipline.

It is my firm submission to you that the Partnership Act 1890, which is now 120 years old, does not reflect this huge change.

I suggest that a section is inserted into the Partnership Act, stating that the Act does not apply to professional, disciplinary matters. Rather, a partner can only be liable, in a disciplinary arena, for the acts of his firm if he: 

  1. has consented to those acts;
  2. authorised those acts;
  3. should reasonably have known of those acts and failed to take reasonable steps to prevent them; 

It was my submission to the SRA and SDT that whilst the provisions of the Partnership Act 1890 undoubtedly relate to a firm’s commercial activities, it should not apply to personal, professional, disciplinary issues. Instead, equity must dictate that an individual must only be liable, in a disciplinary forum, for his own acts or, where he is a partner of a firm, acts of the firm where he has knowledge of those acts and he has authorised or failed to prevent those acts. This submission wasy ignored.

SRA

The SRA & LCS should merge. The single body which would be created would undoubtedly save costs and provide a co-ordinated service. In this regard, I draw your attention to the coalition government’s decision to close the General Teaching Council and to replace it with a more efficient and effective body.

In creating a new governing body for the legal profession, the professional Code of Conduct for Solicitors as well as the procedures of the new governing body must be reviewed. The current Code of Conduct and procedures have developed over a long period of time are, in the main, fit for purpose. However, there are many issues that need addressing, particularly the SRA’s veracity with which they prosecute Solicitors.


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