Non-solicitor shareholder of ABS banned and fined by SRA for lying to clients


SRA: Rare use of Legal Services Act power

A former manager of Cheshire firm Bott & Co’s flight delay team has been fined £4,000 by the Solicitor Regulation Authority (SRA) for lying to clients.

Kevin Clarke, a non-lawyer manager and shareholder of the alternative business structure (ABS) between 2011 and 2017, was also banned from owning or working in ABSs, in a rare use of the power in section 99 of the Legal Services Act 2007.

The SRA, which said Mr Clarke suffered from “a medical condition which impaired his judgment”, did not impose the usual order for non-solicitors that bans them from working at any solicitors’ firm.

Mr Clarke admitted telling clients in a group action in May 2017 that judgment had been entered against the defendant and enforcement action was being taken when neither statement was true.

In an agreement with the SRA, Mr Clarke also admitted misleading clients as to the likely value of the claims.

In the same month, he told one of his clients that the firm had received £5,000 in settlement of his claim.

“This was not true,” the agreement recorded. “The claim had in fact been struck out due to Mr Clarke’s error. Mr Clarke used his own funds to pay the £5,000 to his client to conceal the mistake.”

Mr Clarke told another of his clients, also in May 2017, that his claim had been relisted at court when it had not been.

He misled the client “on a number of occasions, suggesting that the delay in his matter was caused by the court. The delay was actually caused by Mr Clarke’s failure to progress the claim”.

The SRA went on: “The firm identified that Mr Clarke had misled a number of his clients. Mr Clarke admitted this. He sold his shareholding and left the firm in August 2017.

“The firm and its insurers have paid substantial amounts to clients to make good the losses caused by Mr Clarke’s conduct.”

David Bott, senior partner of Bott & Co, said in a statement: “When we discovered, following a thorough investigation, that there was an issue with some of Kevin Clarke’s work, we immediately self-reported the matter to the SRA and our insurers. We acted swiftly and transparently with our clients.

“There has been no criticism of Bott & Co by the SRA during their investigation and in their findings. All client issues were resolved immediately and clients were very satisfied with our honesty and quick resolution.

“Kevin Clarke is no longer an employee at Bott & Co and we are therefore unable to comment on the decisions taken by the SRA.”

The SRA said Mr Clarke admitted breaching the SRA Principles by misleading clients and accepted that his conduct was dishonest.

The SRA said it had taken into account the mitigation that Mr Clarke put forward – that he had co-operated with both the firm’s and the regulator’s investigations and that “during the relevant time, he was suffering from a medical condition which impaired his judgment”.

Mr Clarke was also rebuked and ordered to pay costs of £600.




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