SDT: Firm was in financial straits
A veteran solicitor who used client money to alleviate his firm’s financial problems and also misled his insurer that he was authorised to practise when he no longer was, has been struck off.
Richard Charles Boyd eventually returned the money a year later but the Solicitors Disciplinary Tribunal (SDT) said protection of the public and of the reputation of the profession “demanded nothing less” than his removal from the roll.
He told the tribunal that, at the age of 71, he had been “ruined” by what had happened.
Mr Boyd qualified in 1980. He had been a partner in North Yorkshire Law (NYL) from when it was formed in 2000, and before then a partner in another firm which had merged with others to form it. He was either the majority or sole owner of NYL at all material times.
In early 2020, at a time of financial difficulties for the firm, Mr Boyd arranged transfers of nearly £38,000 from the client accounts of seven estates to office account without notifying the clients in advance or preparing a bill. All the money was returned by February 2021.
Mr Boyd submitted that he had always acted with integrity and honesty. He admitted breaches of the accounts rules but said these were errors rather than “conscious or deliberate actions on his part”.
He said no amount of financial pressures would have encouraged him to knowingly breach the rules.
Mr Boyd added that the SRA had full access to all of the firm’s information, including over 1,000 active matters, and there was no evidence of any other improper transfers.
The SDT noted that all the transactions took place on the same day and were, by his own admission, authorised by Mr Boyd.
The financial position of the firm was “difficult” and he “had not ascertained that the invoices drawn up and the transfers made bore any relation to fees and costs actually incurred”, as shown by the fact that the wording on all the bills was the same. He was not the fee-earner on any of them.
“Mr Boyd also knew that neither he nor anyone at the firm had contacted the clients to explain that fees and costs had risen unexpectedly – in many cases very substantially – before issuing the invoices and making the transfers.”
The tribunal said it recognised that Mr Boyd had “an unblemished career and was held in high regard by those who had provided character references”, but concluded that his actions were dishonest.
“The tribunal found that the public would be incandescent to discover that monies belonging to estates had been improperly transferred for the benefit of the firm.
“The trusted position that solicitors held, particularly when dealing with probate matters, meant that such a fundamental breach of obligations had a significant impact on the trust the public would place in the profession.”
He was found also to have told one of the executor clients that it was “perfectly normal to raise a bill and take costs and then discuss with the client”, knowing this was not the case.
The second set of allegations related to the resignation in March 2020 of the other partner in the firm. Mr Boyd continued to practise as a sole practitioner under the NYL name.
At the point the partnership dissolved, NYL was no longer authorised by the SRA and Mr Boyd should either have stopped practising or applied for temporary emergency authorisation within seven days.
He finally applied for authorisation as a sole practitioner two months later but the SRA did not grant it while investigating what had been happening at the firm.
Nonetheless, Mr Boyd continued to practise and, in applying to renew his professional indemnity insurance, failed to tell the insurer that he was not authorised to do so, despite the SRA having made it clear repeatedly.
In February 2021, the insurer told the SRA that it had voided the policy as NYL had not been a properly authorised body. The regulator intervened in his practice the same month.
Mr Boyd said he had not appreciated the significance of a change from a partnership in which he owned 75% to a 100% sole practice.
He also claimed a senior official at the SRA had told him he could continue to practise under NYL’s old authorisation while the application was being processed. The tribunal heard from the official, who denied this, and preferred her account.
The SDT found that Mr Boyd “knew he was not authorised, knew that he ought to have disclosed it to his insurers and knowingly chose not to do so”. This was dishonest.
It noted that the SRA website had shown incorrect information concerning Mr Boyd’s authorisation for several months.
“That was regrettable, but information on a website could not and would not have taken precedence over the contents of a clear email sent to Mr Boyd personally.”
In mitigation, Mr Boyd said no client had lost any monies and that, as a result of the investigation and closure of firm being fully publicised, “he had effectively been removed from the roll”.
The SDT found that Mr Boyd’s motivation in relation to the transfers was “the significant financial straits in which he found himself”. Further, “Mr Boyd knew he needed insurance and was prepared to mislead insurers to obtain and retain it”.
The estate representatives had been caused “significant distress” in the three examples given in evidence, with Mr Boyd trying to “browbeat” one of them into agreeing to a transfer which had already taken place.
The misconduct was mitigated “to some extent” by the fact that the monies were eventually returned but the SDT did not find that Mr Boyd had significant insight into his misconduct.
The tribunal said it took account of Mr Boyd’s age and “the fact that he had been through a lot as a result of the intervention and investigation”, and health evidence he had provided.
But this and the character references did not amount to exceptional circumstance such that he should not be struck off.
The SRA claimed costs of £41,750, which the tribunal reduced by almost £10,000 and then decided not to order Mr Boyd to pay anyway because he had no assets and had only recently been discharged from bankruptcy.
“The reality was that he was in no position to pay a costs order now or at any time in the foreseeable future.”
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