A partner who misled personal injury (PI) clients and his firm to show the department “in the best possible financial light” has been fined by the Solicitors Disciplinary Tribunal (SDT).
Musharaf Asharaf, a former partner of Beers LLP in Devon, admitted “making payments from cash-rich to cash-poor cases in order to disguise the true financial position on those files”.
The tribunal said that Mr Asharaf, head of the firm’s PI department, used “for his own ends” costs recovered on behalf of some clients for other clients.
“The fact that these ends did not involve personal financial gain and no client or the firm lost money did not alter that intent.
“The respondent sought to portray the department he led in the best possible financial light by applying funds from cash-rich cases to long-running cases with significant disbursements so as to avoid scrutiny from partners in the firm who the respondent considered to be antipathetic to personal injury work.
“He also made three interim payments to Client X to avoid losing this client, because he was scared of him and because he was confident that the ultimate settlement would comfortably cover these payments.
“The tribunal considered it was for the firm to decide whether to make such interim payments.”
The SDT said that by making interim payments to a client with no entitlement to them, Mr Asharaf lacked integrity.
The solicitor, born in 1965, was admitted in 1994 and from 2007 to 2016 practised at Beers, where he was the compliance officer for finance and administration (COFA).
The law firm reported suspected breaches of the accounts rules to the Solicitors Regulation Authority (SRA) in June 2016. Mr Asharaf resigned and “self-reported to the SRA”.
He admitted breaking the accounts rules and failing to maintain public trust, but denied a lack of integrity.
The SRA alleged that on two occasions the solicitor sent invoices to clients “for lower sums than had been agreed with the other side”. In one, where costs were agreed at £75,000, Mr Asharaf sent an invoice showing costs as £52,345. In the other, costs were agreed at £41,150, but an invoice was sent for £31,150.
The SRA said that in both cases, which were run under conditional fee agreements, Mr Asharaf made it clear that the clients were not liable for the costs.
The tribunal also found that by using costs recovered on behalf of some clients for the benefit of other clients, Mr Asharaf “misled his firm as to the true financial position of his case-holding”.
The SDT said it accepted the argument put forward by counsel for the SRA that “it was an ethical standard of the legal profession that practitioners should not mislead their practice or firm on issues relevant to the management of the practice”.
The tribunal went on: “Whilst noting that the actions were not concealed from the firm’s accounts team, the tribunal found that the respondent’s actions created a misleading impression of the financial position of individual files and some of the descriptions used to record the sources of payments were inaccurate.”
Although he may not have intended to break the rules, the SDT found that, as an “experienced solicitor”, Mr Musharaf had acted with a lack of integrity.
He was fined £5,000 and ordered to pay a total of £17,200 in costs. He was also made subject to conditions preventing him from practising as a sole practitioner, partner or member of an LLP, COLP or COFA.