SDT refuses to overturn ban on ex-law firm employee over missing cash

SDT: Order remains necessary

A man whose parents granted a charge over their house to repay the £90,000 misappropriated from his law firm employer has failed to overturn a ban on working in the profession.

The Solicitors Disciplinary Tribunal (SDT) decided that the Solicitors Regulation Authority (SRA) was entitled to impose the ban in 2016 and maintain it when Craig David Garrett sought to have it revoked last year.

The tribunal found no flaws in the decisions behind the order made under section 43 of the Solicitors Act 1974, as a result of which no law firm could employ him without SRA permission.

It heard that Mr Garrett commenced his employment at South Wales firm Louise Stephens & Co in 1999 and latterly had access to the firm’s finances and accounts.

In October 2013, the SDT recorded, Mr Garrett admitted to Ms Stephens that he had misappropriated what turned out to be £90,000 from the office account. A few weeks later, his parents signed a deed granting a charge to that value over their family home, to be enforced on their passing with an interest rate of 4.5% per annum.

He remained employed but, in March 2014, Ms Stephens alleged that Mr Garrett had fraudulently cashed two office account cheques worth £820, and had two further cheques in his possession for £810 made out to cash.

A week later, Mr Garrett signed a statement admitting “dishonestly retaining money from the office account of Louise Stephens and Co”.

However, Ms Stephens then discovered that Mr Garrett had been misappropriating money from client account too and dismissed him for gross misconduct, as well as reporting him to the SRA and Gwent police.

Following an investigation, Mr Garrett was sent a postal requisition detailing 29 offences under the Theft Act 1968 and the Fraud Act 2006.

In 2021, however, the Crown Prosecution Service offered no evidence in relation to all charges and formal not-guilty verdicts were recorded.

The reasons were recorded as relating to the conclusions of an expert and the discovery of further digital material located in Ms Stephens’ lock-up garages, “and the difficulty of the prosecution in being able to review and meet its disclosure duties in respect of the same”.

Mr Garrett initially sought to judicially review the order – and the Legal Aid Agency’s refusal to grant him legal aid – but the High Court rejected this.

Mr Garrett then applied to the SRA for revocation of the order, which an adjudicator refused in June 2023, finding that the acquittal did not mean the order was automatically unnecessary.

Rather, it remained necessary, with the adjudicator noting that the making of the order was not reliant on any criminal conviction.

An SRA adjudication panel then refused Mr Garrett’s application for review of the decision.

In his appeal to the SDT, he submitted that too little weight had been attached to his acquittal. Also, the SRA relied upon the “alleged” confession and the legal charge, the validity of which had never been tested.

It recorded him saying that the legality of the legal charge being challenged was possible and he was not prepared to ask his parents to give evidence as it may prejudice their position.

“As regards evidence of rehabilitation, Mr Garrett submitted that he had no intention of ever working in the legal profession again. He was seeking the quashing of the order for his own peace of mind. In any event, as he had not done anything wrong, Mr Garrett had nothing to prove.”

But the SDT found no flaws in the original decision, nor those of the adjudicator and the panel. Mr Garrett had submitted that Ms Stephens’ evidence could not be relied upon but had not provided evidence to support this, it said.

“Indeed, Mr Garrett had produced no evidence to date to support his assertion that Ms Stephens was responsible for taking those monies and that she had blackmailed him.” It questioned why she would have reported him to the police if this was so.

The SDT noted that the adjudicator had considered the forensic evidence that was available.

This included Mr Garrett being “well placed to manipulate the financial information”, a number of clients stating that they had given Mr Garrett cash which did not find its way into the firm’s accounts, and Mr Garrett’s lifestyle not matching his income, “meaning that he likely had access to funds above his salary”.

“Having seen no other evidence to rebut the above, the adjudicator dismissed Mr Garrett’s assertions about Ms Stephens’ involvement as not being credible,” the SDT said.

One error made by the adjudicator, on the matters being considered in the criminal investigation at the time the order was made, was incorrect but this did not amount to a procedural irregularity that rendered its imposition unfair or unjust.

The SDT concluded: “The tribunal noted that Mr Garrett had provided no evidence of rehabilitation. Accordingly, the tribunal, having found no reason to interfere with any of the decisions made… determined that the order was necessary when imposed and remained presently necessary.”

Mr Garrett was ordered to pay costs of £19,500.

Louise Stephens & Co closed in December 2014 and Ms Stephens herself was fined £5,000 by the SDT over the missing money, with £620,000 reportedly missing from client account, but most of the charges against her were dismissed.

Had she sacked Mr Garrett when she first found out about his actions, it said, “she may not have found herself in this situation and to that extent the respondent had responsibility for the circumstances giving rise to the misconduct”.

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