Solicitor suspended after struck-off brother takes blame


SDT: SRA dropped charges

A solicitor who overcharged two estates by £275,000 has been struck off, but his partner – and younger brother – has avoided the same sanction after saying he was “too trusting”.

Petros Petrou accepted he should be struck off and agreed never to apply for reinstatement to the roll; Stylianos Petrou has been suspended for a year after all but one of the allegations against him were dropped.

This was mainly because the Solicitors Regulation Authority (SRA) was unable to disprove his assertions that he did not know what his brother was doing – even though, in relation to a loan out of an estate to pay a tax bill, it found this “extremely difficult to believe”.

Petros took responsibility for what happened. “This is not a case where the respondents have advanced ‘cut-throat’ defences which could only be resolved at a trial,” according to a regulatory settlement agreement approved by the Solicitors Disciplinary Tribunal.

The pair had practised since 2002 as partners at North London firm Petrou Law Partnership. Petros qualified in 1990 and was the firm’s COFA, while Stylianos – five years younger – was admitted in 1997 and the COLP. The firm closed in November 2019.

Petros admitted that, during 2016/17, he overcharged an estate of which he was an executor by up to £238,000 – and by addressing 27 bills to himself and his brother as co-executor, he failed to disclose these charges to the sole residuary beneficiary, ‘Mr C’. The estate was worth just over £1m.

Though a residuary beneficiary is not technically a client, it was agreed that, where there were no lay co-executors, beneficiaries should be informed of the basis of charging and all likely disbursements in advance.

The SRA noted that most of the transfers were made at a time when the firm was nearing its overdraft limit.

Expert evidence from a costs lawyer indicated that the firm should have charged no more than £16,000 – rather than the £270,000 it did.

In November 2016, Petros also borrowed £100,000 from Mr C without ensuring he had obtained independent legal advice or recording the loan agreement in writing.

Mr C recounted: “I met Petros Petrou for a coffee… He looked visibly stressed and dishevelled. I asked him what the issue was and he told me that PLP had gotten into some trouble.

“I asked him to elaborate and told me that they had a £100,000 tax bill that they could not afford to pay. As he was a friend I offered to help. I did not want a friend of mine to be in financial difficulties if could help them.”

Petros paid the money out of the estate to Mr C, who sent it back. It was paid on to HM Revenue & Customs.

Then, between August 2018 and February 2019, Petros made payments of £230,000 to Mr C out of funds belonging to other clients, because there was no longer enough money in the estate.

Around the same time, Petros overcharged another estate by £36,000 and failed to inform the executors of the charges. Again the transfers to office account usually happened when the firm was up against its overdraft limit.

Together with dozens of other payments made out of client accounts where there was insufficient money, this all meant that, as at 31 January 2019, there was a £490,000 cash shortage on the firm’s client account.

Over the next few weeks, the solicitors transferred money from office account to cover this and other potential shortages.

Petros denied dishonesty but admitted a host of rule breaches, including acting without integrity and that he had acted recklessly. The SRA said that, as he was willing to be struck off, there was “little public interest” in pursuing a full hearing on dishonesty.

Six charges were dropped against Stylianos. That left the allegation relating to the shortage on client account. He admitted this and a lack of integrity but not that he had been reckless. The SRA said pursuing this to a hearing was unlikely to lead to a more severe sanction.

In mitigation, Petros said he had handled the majority of the firm’s clients while also running the business. Stylianos “took minimal interest in the business side and provided little support to [Petros], who became overwhelmed with all the workload”. Petros said the pressure led him to make “poor decisions”.

He said he recognised that the business side of the practice “was not his forte and it is clear that as a result of the disorganisation and chaos that ensued the practice failed”.

The agreement went on: “[Petros] has built up a loyal and large clientele within the local, mostly Greek community, over the past 20 years. He is well respected and has many return clients. It was never his intention to cause any client loss or distress.”

Stylianos accepted and recognised that he “failed to act as a responsible partner”.

His mitigation pointed to the family dynamics: “[Stylianos] always looked up to him both professionally and personally. Whilst they were equal partners in terms of ownership of the firm, Peter was the dominant party when it came to matters of administration of the firm.

“He was also someone who he held in high esteem for his competence and honesty. He trusted him completely. With the benefit of hindsight, [Stylianos] can see that these features of the relationship contributed to him being too trusting and less assertive (he accepts mistakenly) than he should have been.”

He said also that he had incurred nearly £250,000 in debt to help fill the client account shortage.

The SRA described Stylianos’s inattention to the accounts as “endemic and cavalier”, making him culpable, noting also that he had appeared before the tribunal just last year.

He was fined £50,000 for using interim payments of a client’s damages to pay the firm’s profit costs and professional disbursements without the approval of the court, and for failing to provide a litigation friend with any or adequate information about costs.

However, given the SRA’s readiness to accept that he did not know what his brother had done, “neither the protection of the public nor the protection of the reputation of the legal profession justifies striking off the roll”.

After the suspension expires, Stylianos will be subject indefinitely to conditions that will prevent him from being involved in the running of a law firm. He will have to apply to the tribunal to have the conditions removed.

The brothers agreed to pay the SRA costs of £20,000 each, representing just over 60% of the regulator’s total costs.




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