Insurance: Solicitor stuck his head in the sand
A sole practitioner who practised for over a year without professional indemnity insurance (PII) has been struck off by the Solicitors Disciplinary Tribunal (SDT).
Andrew Lee admitted his actions but denied dishonesty, saying his failures arose because he continued, “however unrealistically”, to focus on saving his law firm.
The firm’s PII expired at the end of March 2022 but Mr Lee continued to act for clients until the Solicitors Regulation Authority (SRA) shut down Prometheus Law in July 2023. He continued to act for clients “privately” after that.
The tribunal accepted that Mr Lee had worked hard to restore the firm’s PII arrangements and that “he was trying to save a firm he had built over many years”.
But he showed “a marked tendency to avoid confronting the consequences of the firm’s regulatory position” – any belief that he was entitled to continue practising “would have been manifestly unreasonable” and “no such belief was genuinely held”.
By the end of June 2022 “at the latest”, Mr Lee “knew three things: the firm had no qualifying insurance, the cessation period had expired, and the firm was required to cease practice”.
The SDT went on: “He nevertheless continued to accept instructions and to do legal work. Putting his head in the sand did not negate that knowledge.
“He described some of the people he acted for as friends and relied on blurred personal and professional boundaries. That did not change the character of the communications, which were in substance, and often in form, correspondence between solicitor and client.
“Continuing to practise in those circumstances was dishonest by the standards of ordinary decent people.”
The tribunal heard that Mr Lee, who qualified in 2011, was ran the North London firm from 2017.
His broker “told him clearly” that Prometheus Law would have to cease practice by June 2022, the end of the PII ‘cessation period’, unless replacement cover was obtained.
Nevertheless, in April 2023, the solicitor sent a client an engagement letter, enclosing the firm’s terms of business.
“The terms stated twice that the firm held professional indemnity insurance, once under a heading about insurance.”
Mr Lee said the wording came “from an outdated template that he had not reviewed”, an explanation rejected by the SDT as “implausible, particularly given his close attention to detail and what he knew about the firm’s position”.
The SDT said: “By the standards of ordinary decent people, knowingly telling a new client that a firm holds professional indemnity insurance when it does not is dishonest. This was not a mere oversight.”
In reply to an SRA production notice, Mr Lee described his dealings with another client, ‘Client J’, as “informal help between friends, with nothing close to an engagement letter or an invoice”.
The paperwork, however, showed that “in stark contrast to this explanation”, Mr Lee had “given formal legal advice, requested and received money on account, issued an invoice, asked for identification for anti-money laundering checks and lodged a caveat preventing issue of a grant of probate in the particular matter concerned.
“He had also recorded in writing that he had forgotten to send an engagement letter.”
The tribunal found that Mr Lee knew that Client J was his client, and that his account to the SRA was “knowingly misleading”.
Mr Lee admitted that, having failed to tell the SRA that Prometheus Law had entered the extended policy and cessation periods, he “left SRA enquiries unanswered from November 2022 and did not co-operate with the intervention”.
The tribunal said the SRA had to obtain a High Court order in December 2023 to get access to the documents.
Mr Lee was found to have acted dishonestly by continuing to act without PII, by failing to inform clients of the “true and accurate position about the firm’s PII position” and providing the SRA with misleading information regarding Client J.
He was also found to have failed to co-operate with the SRA more generally and failed to ensure his accounts complied with the SRA accounts rules.
He sought to argue that his case fell into the small category of cases where a finding of dishonesty should not lead to a strike-off, pointing out that his actions had not related to client money.
The SDT disagreed. There was a “significant risk of harm to clients”. It continued: “The dishonesty was not momentary: it arose in three separate contexts and extended over a substantial period.
“[Mr Lee] received payment for work he knew he was not entitled to do. His clients were deprived of the protection of insurance, and the SRA was misled.”
He was struck off and ordered to pay £45,100 in costs.