“Fundamentally decent” partner broke rules to keep firm afloat while waiting for legal aid payments

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26 August 2015

credit card

Mr Barker admitted that he was “living off his credit cards”

A former president of Bolton Law Society, described by the Solicitors Disciplinary Tribunal (SDT) as a “fundamentally decent man”, made 61 improper transfers from client account and used a personal credit card to keep his firm afloat.

The SDT said Jeremy Barker’s motive for the transfers was to avoid breaching his office account overdraft limit. His motive for “introducing his own money via a credit card into client account” and then moving it to office was to sustain the firm while waiting for legal aid payments.

“The tribunal considered that overall he presented as fundamentally
decent man who as his character witnesses said had acted stupidly,” it said.

The tribunal suspended Mr Barker from practice for two years. However, thanks to an act of kindness by Joe Egan, another past president of Bolton Law Society and now the deputy vice president of the national Law Society, he is still working in the law.

When Barkers Solicitors closed last year, Mr Egan’s firm, Joe Egan Solicitors, took over the practice and Mr Barker became a consultant.

After his suspension by the SDT in May, Mr Egan secured permission from the Solicitors Regulation Authority for Mr Barker to work as a paralegal in his firm’s family department, under section 41 of the Solicitors Act.

Mr Egan told Legal Futures: “He’s a man with a lot of experience and ability. I’ve known him for over 30 years, often as an opponent.

“I’m completely nonplussed as to why he did it. I can see the pressure he was under. You can end up waiting months and months for legal aid payments.

“There have to be strong rules about this kind of thing because it can become a slippery slope and before you know it, clients can lose out – though that is not what happened in this case.”

Mr Egan said he did consider, as deputy vice-president of the Law Society, whether he should employ Mr Barker. “He’s someone I know who needs a job. He is very able and there was no hint of dishonesty, so I took the view that it was not incompatible with my position.”

The tribunal described Mr Barker as an “experienced solicitor” who was “in control of the firm and his actions were planned”. Although there was “no adverse impact on the public” because Mr Barker paid the money back within a short period, “potentially the harm could have been significant and he placed client money at risk”.

The tribunal noted that a figure of over £114,000 was quoted in the first Solicitors Regulation Authority (SRA) forensic investigation report on Barkers, but this was “a total of all amounts ever taken from client account and was never all outstanding at any one time”.

The SDT said Mr Barker knew that he would recover the “money which he was misusing” from the legal aid work already carried out, since its value was “at all times significantly higher” than the amounts he had transferred.

“The investigation had been triggered by a qualified accountant’s report. Before notice of the investigation was given, all the monies had been repaid. However the tribunal considered that there must be harm to the reputation of the profession from someone who dealt with his client account in this way.”

The SDT heard in SRA v Barker and Newton (case no. 11327-2015) that Mr Barker was a 50% partner with Michelle Newton at Barkers Solicitors.

Mr Barker and Miss Newton, now retired, were both accused by the SRA of breaking the Solicitors Accounts Rules and related SRA Principles.

Mr Barker admitted these breaches and two further accounts rules breaches, and failing to comply with his regulatory obligations as compliance officer for legal practice and compliance officer for finance and administration.

However, he was also charged with dishonesty or alternatively gross recklessness in relation to his regulatory obligations, which he denied.

Counsel for Mr Barker drew attention to character evidence put to the SDT both Mr Egan and John Birtwell, senior partner of Fieldings Porter, which showed that their colleague was “held in the highest regard and it had never crossed the witnesses’ minds that he had behaved dishonestly”.

Counsel also referred to written testimonials provided by “three members of the judiciary”, but said it was not appropriate to call them as witnesses.

Mr Barker admitted that he was “living off his credit cards” at the time that he used his card to pay into the firm, and his personal expenditure was “not being covered” by amounts he could draw from the firm.

However, the SDT found that dishonesty was only alleged in respect of three payments made into client account using his credit card, which were “almost instantaneously” transferred to office account.

The tribunal held that it had not been proved beyond reasonable doubt that reasonable and honest people would consider this behaviour dishonest or grossly reckless. During its first dealings with the firm, the SRA had not initially raised concerns over using his credit card to make capital contributions to the firm, and the tribunal found that he did not consider that there was anything wrong with doing so. Mr Barker admitted that his conduct in the accounts rules “lacked integrity”, however.

He was suspended from practice as a solicitor for two years and ordered to pay costs of £11,250.

Ms Newton, who does not hold a current PC, admitted the alleged breaches of the accounts rules. She was suspended from practice for six months and ordered to pay costs of £3,750.

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