PI solicitor “put relationship with CMCs ahead of clients”

SDT: Solicitor ignored concerns

A personal injury solicitor put his own interests ahead of his clients, turning a “Nelsonian blind eye” when concerns were raised so as to maintain the flow of referrals from claims companies, a tribunal has heard.

Farooq Rafiq was struck off for multiple breaches of the rules and also following three convictions for assault – one committed while he was on bail for the other two.

The Solicitors Disciplinary Tribunal (SDT) heard that Mr Rafiq, born in 1984, qualified in 2009 and from 2011 was a partner at Broadway Solicitors in Oldham before it incorporated as Broadway Legal in 2016 and he became the sole director. The Solicitors Regulation Authority (SRA) closed down the firm in November 2018.

We reported last year that, shortly before the intervention, he made 21 staff redundant by text message, in breach of employment law. The firm also outsourced work to Nottingham-based Alpha UK Business Services.

Several allegations were dropped ahead of the tribunal, leaving the rest agreed by the SRA and Mr Rafiq.

These included that Broadway “occasionally” sent claims notification forms in road traffic claims only for it to emerge later that the supposed client had never even heard of the firm.

Mr Rafiq then failed to take action when the Motor Insurers Bureau and third-party insurers raised concerns about the veracity of certain claims. This showed a lack of integrity.

He admitted that Broadway was “financially dependent” on receiving clients from claims management companies (CMCs) – who were responsible for 97% of the firm’s clients – and did not advise clients that paying fees to the CMCs may well not have been in their best interests.

“In contrast, it was in the firm’s interests that the client would pay a fee to the CMC, since the firm had a financial interest in maintaining its flow of clients from CMCs,” the tribunal was told.

The SRA accepted that this misconduct was the result of Mr Rafiq’s “mistaken but genuine belief that it would be improper for him to advise clients on the contracts they had entered into with the CMCs, given that he did business with those CMCs”, but it lacked integrity.

In a few cases, Broadway also procured second medical reports and medical treatments for its clients exclusively from CMCs on which the firm was financially dependent, and from a company which shared a director with Alpha. This too lacked integrity.

Mr Rafiq admitted as well he was not aware that Alpha was handling some of his work from Pakistan and so did not ensure that there was adequate protection of client confidentiality. He did not act on a compliance adviser’s recommendation to end the relationship.

Further, there was a £57,000 cash shortage on client account, a £92,000 credit on office account, and the firm held residual balances on 800 client matters totalling £242,000.

Mr Rafiq accepted that he had failed to carry out his role as both COLP and COFA appropriately.

Last September, Mr Rafiq was convicted of three offences of assault by beating, having pleaded not guilty. He was sentenced to a rehabilitation activity requirement, an unpaid work requirement and a restraining order.

It was accepted that the assaults were at the “lower end of the scale”, albeit in a domestic setting with vulnerable victims, but the third one was “particularly serious” as it had been committed while Mr Rafiq was on bail for the first two.

In mitigation, after outlining health issues not detailed in the ruling, the solicitor said he had not planned to run the firm alone, but could not find a partner given the upheaval in the personal injury market in recent years.

“He considered that he had made a positive contribution to the community. He had represented a significant number of clients. He had trained a number of solicitors, some of whom now ran their own firms.

“He had offered pro-bono clinics, and had made a number of charitable donations. He apologised to the profession and was ashamed and embarrassed at his appearance before the tribunal.”

His advocate told the tribunal that Mr Rafiq was a “broken man” as a result of what had happened, and had lost his family.

The SDT said Mr Rafiq’s priority had been ensuring that he did not jeopardise the relationship with the CMCs, although it accepted there was no evidence of individual loss to any client.

“The tribunal considered that [Mr Rafiq’s] motivation for his misconduct as regards the firm was financial. He wanted to continue running his practice which, on his own account, was generating significant turnover given the size of the firm.

“When issues were brought to his attention, he did very little to remedy or rectify those issues. He had repeatedly and consistently subordinated the interests of his clients for his own interests and that of the firm…

“He had turned a ‘Nelsonian blind eye’ to significant and serious issues raised by third parties so as to protect his source of work and, ultimately, the fees this generated…

“The tribunal considered that the totality of the respondent’s conduct was such that allowing the respondent’s name to remain on the roll would have an adverse effect on public confidence in the reputation of the profession.”

Mr Rafiq was also ordered to pay agreed costs of £55,000.

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