Partner struck off after settling PI claim for £5,000 then paying client £60,000 in fictitious damages

SDT: striking off proper penalty

A partner has been struck off for dishonestly settling a personal injury claim for £5,000 without instructions, telling the client it had settled for over £60,000, and then paying out the fictitious damages from unrelated client accounts.

She explained the misconduct as an attempt to satisfy clients and her firm.

In an agreed outcome – approved by the Solicitors Disciplinary Tribunal earlier this month – Lynne Muscroft, who headed the PI department at Cheshire practice Slater Heelis LLP and was a partner and member of the firm for 10 years until she left in 2014, admitted numerous breaches of professional rules.

In a statement of agreed facts and outcome, the solicitor, who was born in 1964 and qualified in 1990, admitted that between February and November 2013 she had misled her client, JW, and others involved in a dental negligence claim.

She accepted an offer of £5,000 to settle the matter, misleading the defendant insurer’s solicitors that she had received instructions to settle, but later admitted JW was not aware of the offer.

As far as JW was concerned, her matter had settled out of court for £60,500, which was subsequently paid to her.

The respondent later admitted there had never been an agreement reached between the parties in relation to the £60,500.

Ms Muscroft deposited the money to cover the fictitious settlement sum into the JW matter client ledger in six separate payments from unrelated client accounts. In addition, monies received on an unrelated matter were wrongly paid out to JW.

In the statement she admitted that she knew she was acting improperly and had misled her client, the firm, the defendant insurer’s solicitors, and the defendant insurer.

In mitigation, the solicitor said she did not gain from her actions and they had been “a misguided attempt to conclude cases to the satisfaction of clients and the firm”.

But she did not seek to “contend that her circumstances affected her decision making to the extent that she did not appreciate that her actions were dishonest”.

The misconduct came to the Solicitors Regulation Authority’s attention when the firm’s managing partner and compliance officer for legal practice reported concerns about negligence and other rule breaches.

Ms Muscroft admitted that she had misused client funds over a period of more than 10 years.

The statement said the respondent “was a partner and then a member of the firm and chose to deliberately mislead her client JW and the defendant insurer’s solicitors and make improper payments and withdrawals into and from client account… [that] demonstrated a lack of integrity… and undermined the trust and confidence the public placed in her.”

The seriousness of the misconduct was aggravated: by the dishonesty; because the accounts rules breach was “deliberate and repeated”; and “the misconduct involved the concealment of wrongdoing”.

However, mitigating the seriousness, the respondent had made “open and frank admissions at an early stage”, had shown insight, and had an otherwise clean disciplinary record.

But “the seriousness of the misconduct is at the highest level”, such that striking off the roll was the proper penalty, the agreement stated.

Ms Muscroft was ordered to pay £17,438 in costs.


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