Bankruptcy: Solicitor continued to practise despite automatic suspension
A veteran solicitor who used the existence of his first bankruptcy in 1993 to “camouflage the existence, and therefore, the need to report” his second in 2014 has been struck off.
The Solicitors Disciplinary Tribunal (SDT) said the case of Stephen Brian Simmons, aged 75, “could be justly characterised as having a tragic dimension” in that he had “in all other respects had been a highly capable, diligent and competent solicitor”.
“His decision to conceal those problems instead of making frank disclosures to his firm and regulator was an error of judgment.
“Whilst not a given, had he taken the appropriate action, as he had been obliged to do, he may have been allowed to continue practising as a solicitor albeit with safeguards in place.”
The SDT rejected his argument that he did not inform his law firm or the Solicitors Regulation Authority (SRA) about the 2014 bankruptcy proceedings or order because he believed it was “an entirely personal matter and a personal problem”.
Mr Simmons contrasted this with the 1993 bankruptcy, which arose from the firm where he had been a partner itself going bankrupt due to its senior partner absconding with client money. There was no wrongdoing on Mr Simmons’ part.
The SDT said: “Given the implications of bankruptcy, including the impact on insurance, borrowing, trust, credit rating, and many other significant factors, the tribunal did not find this argument credible.
“The tribunal found that the respondent, an experienced solicitor, generally, and one with specific and personal knowledge of bankruptcy would have been well aware of the significance of bankruptcy for a solicitor, including the suspension of his practicing certificate and the duty to disclose.
“This experience negated any plausible claim of ignorance regarding disclosure obligations.”
The SDT “considered that the public would be shocked to think that a solicitor would not report such events to the professional regulator”.
It was “more likely than not” that Mr Simmons “had utilised the existence of the earlier 1993 bankruptcy to camouflage the existence, and therefore, the need to report the proceedings relating to the 2014 bankruptcy”.
The tribunal heard that Mr Simmons, admitted in 1980, joined Hertfordshire firm Brightstone Law in 2008, initially as a member and from 2013 as a consultant, until June 2020.
At the time of his tribunal hearing last month, he was working for central London firm CVS Law.
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The solicitor told the tribunal that Brightstone’s “unilateral decision” to remove personal injury work from him led to a “dramatic reduction in earnings, the “prime reason” for his financial problems.
He entered into an individual voluntary arrangement in 2009 but was “unable to comply” and it was terminated in 2012. A bankruptcy order was made against him in 2014, due to a debt owed to HM Revenue & Customs.
Mr Simmons said he had “acted on the advice of his accountant” in not disclosing the bankruptcy.
“This advice had not been confirmed in writing, and he had no way of substantiating the advice as his accountant was now dead,” the SDT noted.
He failed to disclose the bankruptcy to Brightstone, including in three compliance declaration forms, and to the SRA. He also failed to disclose a bankruptcy restrictions undertaking he had given in 2015.
As bankruptcy automatically suspended a solicitor’s practising certificate, he had operated without one.
“The tribunal found his explanation of seeking advice from his accountant and his steadfast reliance upon such unrecorded advice from a non-specialist and in relation to such a significant issue to be entirely unconvincing.”
The SDT said the solicitor’s motivation had been “to conceal his bankruptcy and to keep working”.
A solicitor “of any level of experience would know they had a duty to report serious financial difficulty, particularly bankruptcy, to their regulator and firm”.
The tribunal said it treated Mr Simmons as a person of ‘good character’, despite a previous tribunal finding against him in 1996, when he was fined £5,000 for breaches of the accounts rules and non-payment of counsel’s fees.
Mr Simmons was now 75 and had experienced serious health issues in the recent past, but there was “limited evidence of any genuine insight”.
He was struck off. The SRA claimed almost £40,300 in costs. However, given the solicitor’s “limited means and earning potential, his age and health”, the tribunal made no order for costs.
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