“Disgraceful” solicitor who used client account cash to keep firm afloat struck off

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19 August 2015

SRA: investigation officer found multiple payments

SRA: investigation officer found multiple payments

A solicitor who withdrew money more than 150 times from client accounts so as to keep his firm afloat has been struck off for his “disgraceful” behaviour.

The Compensation Fund has paid out more than £1.25m due to the actions of Richard Arnold Wilkes, who is 69 and was sole principal of Devon firm Hansell Wilkes, the Solicitors Disciplinary Tribunal (SDT) was told.

In a recently published ruling, the tribunal heard that at least 167 instances of Mr Wilkes transferring money from client to office account without the raised bill being sent to the client had been identified by the investigation officer sent into the firm by the Solicitors Regulation Authority (SRA).

Among them were some probate cases where the amounts billed were far in excess of the value of work undertaken – in one, the firm had raised 17 bills worth £97,000 when the actual work had been worth £5,000.

Mr Wilkes regularly transferred money back to client accounts to rectify the position – between 1 February and 31 March 2013, there were 131 such back transfers totalling over £1m. He told the SRA that the transfers from client account had been made to deal with cash flow problems and to keep the firm within its £30,000 overdraft limit.

The SDT said that in mitigation, Mr Wilkes’s advocate said that the solicitor had “treated his practice as his family”.

The ruling recorded: “He had been in practice for over 30 years when the recession had come and he had wanted to survive and protect his employees, his clients and himself. There was not excuse for using client money to allow the firm to survive, but this background would give the tribunal some context to the respondent’s actions.

“It was not the case that the respondent did not intend to pay back the shortfall and he had usually done so. At intervention there was a shortage of some £300,000 but the respondent said that this had crystallised because of the intervention as he had had a real hope of refinancing.”

Mr Wilkes admitted all the allegations laid against him, including that he had acted dishonestly. He also admitted to a charge that he provided banking facilities to a client who had wanted to keep money out of her own bank account. He told the tribunal that he was ashamed, embarrassed and humiliated by what had happened.

“He accepted that his actions had not been correct and that they were reckless but he had no intention permanently to deprive and a real intention to recapitalise.”

The tribunal ruled that Mr Wilkes’s conduct was “disgraceful” and that he should be struck off.

He was also ordered to pay £12,250 in costs but in light of his impecuniosity – he received the state pension, had no equity in his home and was made bankrupt last year – the order could not be enforced without leave of the tribunal.

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