Solicitor who used office account “as personal account” is struck off

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21 July 2017

Criminal law: solicitor had been waiting for legal aid contract to start

A sole practitioner who did not have a client account and admitted using his office account “at times as a personal account” has been struck off by the Solicitors Disciplinary Tribunal (SDT).

The tribunal heard that Michael Healey, based in Liverpool, misappropriated over £31,000 of client money before going bankrupt in May 2016.

Mr Healey was born in 1962 and admitted in 2002, and his firm was based in Stockbridge Village, Liverpool.

The SDT said Mr Healey’s firm had been awarded a criminal legal aid contract, due to start in July 2015. However, this was postponed by the Legal Aid Agency, first to October 2015 and then to January 2016, because of a dispute between the agency and the legal profession.

Mr Healey said the delay had a “big effect” on the business, although the SDT observed that he had already been in financial trouble for several months before the original start-date.

In the meantime, he handled personal injury and flight delay compensation claims, but admitted delaying payment of compensation to clients, and lying to them about the progress of their cases. He was later unable to pay what was due because of financial problems.

He acknowledged that this work was not enough to sustain the business in any case.

The Solicitors Regulation Authority (SRA) told the tribunal that a review of office account bank statement for Michael Healey Solicitors revealed details of personal expenditure.

“In addition to a number of regular online transfer to the respondent’s personal account, there had been cash withdrawals from ATMs and post offices.

“There were also debit card payments made to supermarkets, restaurants, a mobile phone provider and retail shops. Payments had been made to a holiday park in Wales in the total sum of £3,690 between March and July 2015.”

The SRA said there were also cash withdrawals made in Europe, and 27 online payments totalling over £1,300 to a gambling website. Mr Healey said he had been trying to generate funds through high-odds bets.

The SRA said that from the time Michael Healey Solicitors was authorised in September 2014 to Mr Healey’s bankruptcy in April 2016, the law firm “did not have a client account” and that in its application for recognition Mr Healey said it did not intend to hold client money as the plan was to do criminal law work.

Mr Healey admitted to an investigating officer that he had used his office account “at times as a personal account”. He said he did not know what the firm’s fee income was, but the bank statements showed he was making withdrawals “in excess of £3,000” most months.

In mitigation, Mr Healey accepted that he should have wound the firm down when the contract was first postponed, but “this was his dream and neither common sense nor stark reality was hitting home”.

While other criminal law firms could practice under old legal contracts, Mr Healey could not practice until the new contract began, and “by that time, he had amassed considerable personal and professional debt”.

The solicitor acknowledged that he had been “dishonest with clients, some of whom he had known for many years”, and was “deeply sorry”.

He admitted all the allegations made against him by the SRA, including misappropriating client money, providing misleading information to clients and to the SRA – specifying on his annual practising certificate and registration forms that he had “never held client money”.

He admitted receiving client money without having a client account to pay it into and failing to maintain proper accounting systems or keep proper records.

He also admitted failing to notify the SRA that the firm was in financial difficulty, unable to pay debts to HMRC or its landlords, and he admitted dishonesty.

The SDT concluded: “There was obvious harm caused by the respondent’s misconduct. A number of clients had been directly affected, in that they had not received their compensation promptly and some had not received payments at all.”

Mr Healey was struck off and ordered to pay costs of £12,160.

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