Tribunal: solicitor’s misconduct calculated
A solicitor with nearly 25 years’ experience has been struck off for dishonestly using client funds to prop up his business and failing to pass on to an RTA client the £73,500 due to her, after a “perfect storm” of circumstances put his firm in difficulties.
At the hearing last month, Nicholas Charles Stansfield Goddard, told the Solicitors Disciplinary Tribunal (SDT) that problems at the time included that the firm had lost its biggest client, and that he himself was ill and suffering from anxiety and depression.
Mr Goddard, who was born in 1965, was admitted in 1991 and practised at Manchester-based Total Law for seven years, admitted all the charges against him.
The Solicitors Regulation Authority (SRA) alleged he transferred improperly at least £77,387 from the client account.
Mr Goddard was declared bankrupt in May 2016 and one of the allegations against him was that he had not notified the SRA of the fact. He had also failed to keep proper accounts for some nine months.
He admitted to the SRA’s investigator that he “had been transferring client monies from client to office bank account in round sum amounts of, for example, £1,000, £2,000 or £5,000 to put office bank in funds to enable him to pay staff salaries … [and he] continued to do this until there was no money left in client bank account”.
In relation to one of three clients, Ms AK, for which the solicitor held – and failed to pass on – funds, he eventually paid her £5,000 and £10,000 respectively in February and April 2016. He had received damages due to her in December 2015, but did not pay out the outstanding balance of £73,500.
In June 2016 Ms AK wrote to the SRA, pointing out that since her accident “life has been a great challenge” and that by failing to pay up, Mr Goddard had “abused the trust of a sick individual, and has caused me considerable upset and emotional distress as a result of his actions”. He had “considerably increased the pain that I suffer,” she added.
Ms AK said she first learned the monies had been transferred to the firm in February 2016 when she spoke direct to the defendant’s insurers in her case. Until then, Mr Goddard had not acknowledged the funds had been paid and, further, “he has avoided me, lied to me and manipulated me in order to not discuss this issue”.
The tribunal recorded that in a statement to the SRA, Ms AK described Mr Goddard’s conduct as “a disgrace to the legal profession”. She reported it had caused a property transaction to fall through and had made her medical condition worse, such that she had been “unable to ‘move on’ with her life”.
The tribunal ruled that Mr Goddard had been “fully aware of his duties and obligations in relation to client monies, and knew that in improperly transferring client monies and failing to give clients monies which were due to them that he had acted dishonestly”.
In mitigation, Mr Goddard said that at the time there had been “a catastrophic series of events”: he was going through an acrimonious divorce; his new partner was seriously ill and could have died; the firm had lost a client that provided 70% if its income; and he had himself been diagnosed with “chronic adjustment disorder with both anxiety and depression”.
A medical report said the condition affected his ability “to make the right decision at the time”.
The “perfect storm” of circumstances, was “wholly exceptional” and the tribunal should take these into account and not strike the respondent off the roll, Mr Goddard submitted. A number of testimonials from “eminent legal professionals” demonstrated that his conduct had been out of character, it was argued.
However, the tribunal concluded that Mr Goddard’s misconduct was “deliberate, calculated and had continued over a period of time”. It had been “aggravated by his proven and admitted dishonesty”.
The tribunal noted Mr Goddard’s previously unblemished career and “genuine insight and remorse”. But it found his dishonesty had been “extensive” and had “continued over eight months and involved 35 separate transactions”. Its impact on Ms AK and the profession as a whole was “significant”.
Despite recognising that Mr Goddard “would have been under significant pressure and stress”, it found there were no exceptional circumstances and that the sanction of strike-off was “appropriate and proportionate”.
Mr Goddard was also ordered to pay £5,000 costs.