Solicitor “embarrassed by wasted costs order” faked invoice to cover up payment

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28 November 2016

Fees: firm's system picked up bogus payment to barrister

Fees: firm’s system picked up bogus payment to barrister

A solicitor who hid a wasted costs order against his firm by faking a fee invoice on another matter so as to create a surplus he used to pay it, has been struck off.

Luke Anthony Welsh, born in 1985 and qualified in 2010, was an assistant running Howells Legal’s employment department across five offices in South Wales, but mainly in Swansea.

The Solicitors Disciplinary Tribunal heard that Mr Welsh used a fake invoice to artificially create a surplus on one matter so as to pay a £1,500 wasted costs order on another which he had been too embarrassed to admit to the firm.

With the rest he attempted to make an improper withdrawal of £1,500 purportedly for counsel’s fees, asking for a cheque to be sent to ‘N Jones’, who was a barrister at a local chambers but who had not acted in the case. N Jones was also the name of a friend of Mr Welsh’s.

He was given a final written warning by the firm on the basis that it was a serious but one-off case of bad judgment.

However, when it was then discovered that on another case he had again created a surplus, and created a false fee note from counsel for the money, the firm started disciplinary proceedings, only for Mr Welsh to resign. He had again sought a cheque for N Jones, this time for £1,800.

The firm picked up the breaches because it had a policy that counsel’s full name must be provided when paying their fees, not just an initial. The cheques were cancelled before they were paid out.

Mr Welsh admitted all the breaches and that he had acted dishonestly. In relation to the cheques for N Jones, he said the intention was to ask his friend to bank the cheques so he had the money in order to pay counsel’s fee notes.

However, the Solicitors Regulation Authority said Mr Welsh had provided no explanation as to why he planned to pay outstanding counsel’s fees this way rather than simply making a direct payment out of the artificially created surplus on client account.

In mitigation, Mr Welsh said that as the only employment lawyer in the firm’s five offices, he had felt under pressure to bill significant sums during his two years with the firm and he had increasingly felt unable to cope.

Describing himself as a “reasonably junior” solicitor at five years’ PQE at the time of the misconduct, he also claimed that he was unsupervised on a day-to-day basis.

Mr Welsh told the tribunal that he deeply regretted his actions and was wracked with guilt.

Deciding to strike Mr Welsh off the roll, the tribunal said noted that his motivation had been to conceal his error and resulting wasted costs order.

“Whilst he had not personally gained financially from his misconduct, it was clearly motivated by self-interest in that he had avoided (for a period) any internal sanction by the firm for his error.

“His actions were clearly planned; it had taken some thought to create misleading bills, decide to draw cheques payable to ‘N Jones’ and then fabricate a fee note.”

At five years’ PQE, Mr Welsh “was not a junior employee”, the tribunal said. He bore “sole and heavy culpability for the misconduct”; even though no client had suffered, the firm’s reputation had been damaged.

The tribunal also put on record that it was “impressed” by the manner in which Howells Legal had dealt with Mr Welsh.

The tribunal heard that Mr Welsh was now self-employed and giving advice on employment matters, which is not a reserved activity and so is beyond regulation.

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