Damages: Director paid one client out of his own pocket
A law firm boss who told three personal injury clients their cases had succeeded when actually they had not, and even paid them damages, has been struck off.
In each case, the matter had not proceeded because of the negligence of David William McDermott, who was a director and the compliance officer for legal practice at Lancashire firm Michael W Halsall Solicitors (since bought by Express Solicitors).
Mr McDermott qualified in 1994 and worked almost his whole career at the firm before resigning in September 2021, a day after being suspended. He then self-reported to the Solicitors Regulation Authority (SRA).
Before the Solicitors Disciplinary Tribunal, he admitted misleading the three clients on the progress of their claims.
The first matter, relating to an accident in 2012, failed due to defective service of court documents in 2015. Mr McDermott continued to communicate with the client as if the claim was ongoing and successful, and in 2020 paid them £25,000 from the firm’s office account.
Protective proceedings were issued in the second matter in 2016, but no further action was taken on the file, meaning the case would have failed for want of prosecution.
Again, Mr McDermott corresponded with the client as if the claim was proceeding and in 2018 paid them £3,800 in supposed damages.
In the third matter, proceedings were issued in 2017 but the claim struck out 15 months later due to a failure to book representation for the case management conference. Communications with the client continued and they eventually received £12,500.
In October 2021, the firm informed the clients what had happened and that – in relation to the first and third matters – Mr McDermott should have given them the opportunity of taking legal advice in respect of his negligence.
But the firm thought the settlement on the second was “in the brackets of what you would have been awarded by the court” and so could not say if the client had been undercompensated as a result of the negligence.
In his admissions to the SRA, Mr McDermott said “no meaningful explanation is offered” as to why he acted as he did.
The SRA also accused him of paying the money in two of the cases “without proper valuation”, an allegation the tribunal dismissed because of errors in the way the SRA pleaded it.
Mr McDermott told the SDT he had accepted some years ago that he would be struck off.
He argued that he had “great experience” in quantifying personal injury claims and no client out of the many thousands he had assisted, including these three, had suffered financial loss – indeed, he said the three had been paid at “the higher end” of what they would have received at court. He had actually used his own funds to pay one client.
He apologised to the tribunal, the profession and the clients. His counsel said: “This had been a sad fall from grace for a talented and experienced solicitor who had represented many people in the appropriate way and within the rules over many years.”
Given the admitted dishonesty and the absence of any exceptional circumstances, the SDT said nothing less than a strike-off would restore the public’s confidence in the profession.
It also ordered Mr McDermott to pay costs of £5,715.
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