The High Court has ordered a former partner to shoulder the £182,000 costs of the Solicitors Regulation Authority (SRA) shutting down his law firm.
It is believed to be the first time that the SRA has sought to use a power under the Legal Services Act 2007 to have a former partner pay intervention costs, which requires a High Court order.
Normally, the costs are automatically recoverable as a debt, in full without any order of the court, from the solicitor whose practice is intervened in, but that could not be done here.
John McLee Robinson was the sole equity owner of central London firm McLee Solicitors, but when the SRA shut it down in 2012, he was serving a one-year suspension from practice after accepting a number of charges, including failing to supervise an employee who had misappropriated client funds.
SRA rules meant Mr Robinson could not retain his ownership interest while suspended. Various other lawyers tried to regularise the firm’s position in his absence but their efforts did not succeed.
When Mr Robinson’s suspension ended in July 2012, he was granted a practising certificate subject to conditions that prevented him from acting as a sole practitioner, or manager or owner of a firm. He was permitted to practise only as an employee in employment approved by the SRA.
In Solicitors Regulation Authority v Robinson  EWHC 3223 (Ch), His Honour Judge David Cooke, sitting as a High Court judge, observed: “This would have been difficult to arrange at McLee, since there were by this time no persons designated as partners who could run the firm and no one who could employ Mr Robinson since he remained the sole owner of the firm.”
In August 2012, the SRA decided to intervene in the firm, with the fact that staff had been unsupervised for the previous four months one of the reasons.
The SRA submitted that, as the owner of the practice, Mr Robinson could and should have ensured that it ceased to practise after his suspension, but he made no attempt to do so. This led to the intervention.
It also argued that Mr Robinson “positively wished the practice to continue in operation, in order that he could return to it when, as he hoped, his suspension was lifted” and was still involved in running the firm while suspended.
Mr Robinson denied this and also accused the SRA of not telling him the firm should close, or even contacting him about the problem until July 2012.
However, the judge found “a considerable amount of evidence that he was in effect standing behind those who were ostensibly running the firm and making the arrangements under which they did so in order to keep the business going until he could resume participation…
“In the light of this evidence, and notwithstanding Mr Robinson’s denials, I am satisfied that he was in practice controlling the operation of the practice at all times, even if not becoming directly involved in client matters.
“It is all consistent with his own position that he remained the sole owner, and that all others named as partners were no more than employees. Although he sought to avoid admitting it, the only person who could be their employer was himself.”
Though HHJ Cooke was “minded to accept” that Mr Robinson was not initially aware that he could not retain his ownership interest after being suspended – and “certainly the SRA did nothing to bring that home to him” – he said the solicitor knew the firm needed to have either two partners or one registered sole practitioner to continue.
He should either have made these arrangements or closed the firm, the judge said.
HHJ Cooke concluded that Mr Robinson had “at least the prime responsibility for all the breaches of the regulations that took place after his suspension, and the sole responsibility for the fact those breaches were continuing and had become effectively incapable of remedy in the months leading up to the intervention”.
It was not only appropriate to make an order against Mr Robinson but that he pay 100% of the costs, he ruled.