Third time unlucky before the SDT as criminal law solicitor is suspended

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28 September 2016

Cash: not paid in promptly

Cash: not paid in promptly

An experienced criminal lawyer has been suspended for five years by the Solicitors Disciplinary Tribunal (SDT) after twice being fined for previous accounts rule breaches.

Michael Schwartz, who was born in 1954, was also ordered to pay costs of £17,300. However, the tribunal decided to suspend his suspension for five years, enabling the solicitor to continue to practise under strict conditions.

The SDT found in its latest ruling that Mr Schwartz had breached the Solicitors Accounts Rules by failing to pay money into client account and had practised without authorisation by claiming to be a sole practitioner.

“There was no clear motive for the misconduct,” the SDT said. “It had arisen due to the respondent placing his head in the sand and due to his ineptitude and unacceptable practice.

“The misconduct did not appear to be planned or spontaneous. It was a consequence of the respondent’s failure to act, it was his inaction that had resulted in the misconduct.”

The tribunal said Mr Schwartz had not concealed what he had done and, when challenged, had paid in the money received from clients.

“The tribunal’s starting point, had it not been for the respondent’s previous matters, would have been a fine.

“However, this was the respondent’s third appearance before the tribunal. He had been fined on the two previous occasions but this had been insufficient to ensure that the respondent adhered to his professional requirements in respect of client money. The protection of the public required a greater sanction.”

The tribunal heard that, at the time of his latest misconduct, Mr Schwartz worked as a consultant, under a practising certificate (PC) which was already subject to conditions. Among them were conditions preventing him from acting as a sole practitioner or holding client money.

The SDT said Mr Schwartz wrote to the National Taxing Team in 2012, enclosing his file relating to a matter, and in that letter “referred to himself as a sole practitioner”, despite the absence of sole practitioner status.

The following year Mr Schwartz was visited by a client, Mr N, in relation to a driving offence.

“At that time, Mr N asked about the sum of £300 which he had previously paid to the respondent. The respondent informed the firm’s accounts department that he had the money at home and subsequently brought it into the office and it was paid in.”

The same year another client, Mr AB, who Mr Schwartz was representing in relation to an “assault matter”, reported to one of the solicitor’s colleagues that he had paid Mr Schwartz £250, but “despite numerous requests had not received a receipt for the monies paid”.

The SDT said Mr Schwartz accepted he had taken the cash from client without invoicing him or banking it, and later banked the money.

The solicitor admitted breaching the accounts rules in relation to Mr N and Mr AB. The tribunal found that he had also breached the SRA Principles 2011, but rejected allegations involving two other clients. Mr Schwartz also admitted practising without authorisation.

However, he rejected the SRA’s allegation that he had acted dishonestly and made “a conscious decision to deliberately retain client monies for his own financial gain”.

Instead, Mr Schwartz argued that he was “a victim of his own poor office administration in the case of Mr N, which was coupled with a holiday period in the case of Mr AB”.

The SDT ruled that the SRA’s allegation of dishonesty could not be proved beyond reasonable doubt.

The tribunal heard that in 1992 Mr Schwartz had been fined £2,500 for taking money out of client account in breach of the rules, failing to maintain books of account and failing to deliver accountant’s reports.

In 2001 he was fined £1,000 for “conduct unbefitting a solicitor” after a cheque was paid into his personal bank account.

Counsel for Mr Schwartz argued that the existing conditions on Mr Schwartz’s PC were enough to “fully protect the public” and the appropriate sanction was a fine.

The SDT concluded that he had a “high level of culpability”, and his misconduct justified suspension for five years. However, the tribunal also imposed a restriction order, suspending its effect for five years subject to compliance with the existing conditions on the solicitor’s PC, which the tribunal renewed for the five-year period.

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