Dishonest ABS owner who ignored costs ruling is struck off

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1 February 2017


Probate: solicitor overcharged as executor

A solicitor who lied to clients and ignored a High Court costs ruling has been struck off by the Solicitors Disciplinary Tribunal (SDT) and ordered to pay costs of nearly £100,000.

Michael John Elsdon’s alternative business structure (ABS), Sai-Donne Ltd, was shut down by the Solicitors Regulation Authority (SRA) in 2014 – the first ABS to be closed by the SRA on the grounds of a manager’s suspected dishonesty.

Mr Elsdon did not attend his tribunal, was not represented and failed to file an answer to any of the 15 allegations made against him. The SDT upheld 10 of the allegations in full and one in part, and found he acted dishonesty in relation to six of them.

The SDT said Mr Elsdon’s motivation seemed to be “personal financial gain with an undercurrent of greed” for most of his misconduct. “The misconduct was deliberate, calculated and repeated, and continued over a period of time.”

Among the allegations upheld by the SDT was that Mr Elsdon failed to repay £39,960 in fees he had charged as co-executor of an estate after a costs assessment by Master Gordon-Saker, now the Senior Costs Judge, that he could only charge £7,920.

He was also found to have charged the estate for his own costs of his defence at the assessment, and by doing so acted where there was a conflict of interest and without integrity.

Master Gordon-Saker said the work carried out by Mr Elsdon “involved no real complexities”, and reduced his hourly rate from £250 or £275 to £175.

Mr Elsdon was born in 1947, and worked as a sole practitioner between 1989 and February 2013. From March 2013, he practised both through Woolacott & Co, a firm he bought, and Sai-Donne, an ABS he set up.

The tribunal said the allegations related to Mr Elsdon’s conduct while practising under his own name and as Sai-Donne.

He was found to have transferred £1,960 from client to office account to pay for a medical report, failed to pay it but told the clients it had been paid.

He “improperly withheld” the net proceeds of sale of the freehold of a commercial properly, just under £10,200, until his client stopped disputing his invoice for over £2,600.

Mr Elsdon failed to pay interest on a six-figure sum held in client account when it was “fair and reasonable” to do so and the client had requested it.

The solicitor also tried to stop his accountants reporting an “irregularity” to the SRA. He emailed the accountants to say: “I do not want a report criticising me sent to the SRA, but simply the completed form as have [sic] been submitted in the past 25 years.”

The SRA intervened into Mr Elsdon’s practices in December 2014. It emerged that, earlier that year, the regulator had been forced to go to the High Court to get an order for disclosure of documents it had requested from him.

His application to set aside the intervention was rejected at the High Court by Mr Justice Newey in May 2015, who agreed with counsel for the SRA that there was reason to think Mr Elsdon had “lost his ethical compass”.

Lord Justice Patten rejected his application for permission to appeal in November 2015, and Lord Justice Kitchin confirmed this at a hearing in February last year.

Mr Elsdon also challenged his referral to the SDT by launching a judicial review. Mr Justice Pickin rejected this on the basis that it was “totally without merit”, but the tribunal said a decision was “awaited” on the solicitor’s appeal.

The SDT accepted arguments put by the SRA’s counsel that there was no reason to delay the tribunal hearing, since it was “hard to see” how the Administrative Court could find that the decision to refer the matter to the tribunal was unreasonable.

On sanction, the tribunal said the seriousness of the misconduct was “very high”, there had been six findings of dishonesty and there were no exceptional circumstances.

Mr Elsdon was struck off the roll, and ordered to pay costs of £96,916, with the tribunal noting that he had increased the costs incurred “by the way in which he had conducted himself”.



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