Saturday, January 21, 2006

IBTL - Scales of Justice



This picture sums up our work perfectly. The scales should be balanced but with so much wrong doing in the courts the scales are not balanced. Achieving a balance again with the scales is our target.

Thursday, January 12, 2006

Crooked lawyers ordered to pay up

A SOLICITOR and his law firm must pay £360,000 to 63 investors involved in a boiler room scam the Court of Appeal ruled today.

John Martin and Adrian Sam & Co ("ASC"), the former London-based law firm at which Martin was a partner, were found guilty in December 2004 of being involved in an illegal overseas investment firm's 'boiler room' activities in the UK.
At the time, the judge ruled they should to repay money to investors. Martin and ASC appealed against that ruling. They did not challenge the finding that they were knowingly concerned.
Today, Margaret Cole, director of enforcement at the FSA said Martin and his firm 'were no more than a seemingly respectable front for a boiler room and these investors believed that by paying money to a UK solicitor, their investment was safe.'
The FSA said it will now begin the process of enforcing the payments, including establishing what assets are available. But it added: 'A full recovery of all the victims' losses cannot be guaranteed.'
The case related to a period between August 2000 and October 2001 when Steven Wilkinson, trading as Apex Equities and then as Great British Investors, operated a boiler room in Spain. Wilkinson and the boiler room operated illegally by carrying on investment business in the UK without authorisation.
The boiler room operated by making unsolicited phone calls to UK residents during which Wilkinson and his cronies recommended certain shares that were offered at inflated prices. They claimed the shares were going leap in price; and that the boiler room would only receive payment if the shares they recommended increased in value. Investors paid more than £825,000 directly to ASC's client account. This process was designed to imply to investors that their money was safe in the hands of UK solicitors.
Martin, on behalf of Wilkinson, used the investors' money to acquire the shares for the investors at a price of between £2 and £5 less than the investor had agreed to pay for the shares. Martin also arranged for the delivery of share certificates to the investors. ASC charged Wilkinson £60,500 for its work. The High Court found that Martin knew Wilkinson was acting without authorisation.
At the time the boiler room ceased trading, investors fell into two categories - those who received a share certificate from Martin after paying him money, and those who paid their money but received no share certificate. Following earlier court proceedings, ASC refunded 67p in the pound to those investors who had not received a share certificate.
In December 2004. the High Court ordered that those investors with no certificates should receive the balance of their investment back in full from Martin and ASC and that investors in possession of a share certificate should receive the difference between what they paid per share and what it was actually worth at the time ASC acquired the shares
Today the FSA said in a statement that because the boiler room was not authorised by the FSA, investors do not have access to the Financial Services Ombudsman or the Financial Services Compensation Scheme.
Margaret Cole added: "Investors who do not look into the true nature of the deal they are getting into can suffer substantial harm, as can professionals who act as fronts for boiler room operations. Although the FSA can seek to recover victims' losses through the courts, we can rarely get investors all their money back."

Crooked lawyers who keep working

A damning report on the discipline of dishonest and criminal practitioners broadcast on Channel 4's Dispatches earlier this month has led to a great deal of confusion.
No one at the Solicitors Disciplinary Tribunal (SDT) will comment on the programme's claim that more than half of all solicitors found guilty of misusing clients' money have been allowed to continue practising. Barrie Marsh, the SDT president, speaking on the film, also seemed out of line with his own organisation when he said he was "amazed" that solicitors were not struck off for criminal offences of dishonesty.
Despite the peculiar silence of the SDT, the Law Society is surprisingly forthright. With both solicitors and lay people on its panel, the tribunal is independent of the Law Society, which, together with the Office for the Supervision of Solicitors, brings about 200 cases a year against offending practitioners. In 1997, out of 182 cases, 58 solicitors were struck off. David McNeill, the Law Society spokesman, says: "Our view is clear. Any solicitor who is guilty of dishonesty or a serious criminal offence should be struck off. We have been shocked by many of the findings of the SDT."
Dispatches looked at a sample of 200 solicitors most recently brought before the tribunal, of which 78 were found to have mishandled clients' money. Most remained on the roll of solicitors. Four cases were highlighted in the programme. One examined the tribunal that suspended Terence Mitchell from practising for 12 months after he was imprisoned for a £250,000 mortgage fraud. The Law Society then successfully appealed that the penalty was too lenient and though Mitchell was then struck off, he continues to work as a clerk. He was secretly filmed advising reporters who posed as clients without telling them that he was not a solicitor. "A solicitor who has been struck off is barred by the regulations from seeing clients and in the light of the programme we will be looking at all the issues raised," says Mr McNeill, who is, however, critical of the programme for blurring the boundaries between the Law Society and the SDT. He claims that Dispatches unfairly attacked the society for decisions that are in the tribunal's domain and cites the successful appeal to the High Court in the Mitchell case as proof of this, as well as creating a precedent that the SDT will have to follow.
He adds: "If one solicitor is continuing to practise who should have been struck off, that is a worry.
"Our regulations are very tough, but we do not make the final decisions. We are the prosecuting authority."
In another case the tribunal fined Tony Darnell who was was convicted of forgery in the Crown Court. The tribunal still did not strike him off the roll when he appeared before it, having disregarded a ruling that prevented his appearing as a solicitor in court. He then became a leading criminal practitioner in Stockport, but was eventually struck off after being convicted of drug-dealing and sentenced to 11 years in jail.
Further damaging the public image of solicitors, already tarnished by criticism of fees and the standard of service offered to clients, the affair is clearly creating animosity between the Law Society and the SDT. One society insider would like to see the tribunal thrown out of the society's premises so that the public gets the message that the two organisations are run separately.
In financial terms, though, the Solicitors' Indemnity Fund (SIF), an insurer for solicitors for client compensation claims, has more to lose than most through crooked practitioners. Sharon Bolton, the spokeswoman, says: "It is in everyone's interest that there is no dishonesty in the profession. To the extent that the numbers of claims against solicitors are high, we have an interest in reducing them."
She points out, however, that "the number of claims arising from dishonesty is not huge".
Between 1994 and 1998 only 6 per cent of claims by value against the fund involved the dishonesty of a partner in a practice. A further 1 per cent involved the dishonesty of an employed solicitor. The rest are to do with malpractice, such as negligence.
Despite these limited numbers, the SIF will, when it receives a claim, report any reasonable doubts about honesty to the Office for the Supervision of Solicitors. "Last year," Ms Bolton says, "we reported 93 claims to the OSS because we had a suspicion of dishonesty."
Most practitioners have an interest in seeing tough penalties meted out to crooks, who undermine public confidence. Indeed, it is solicitors who are being asked to pay ever greater amounts in indemnity premiums to cover claims by clients.
The Law Society is unequivocal. Mr McNeill says: "We would not want any rotten solicitor to have the impression that he or she can get away with it."
But so long as the SDT stays silent, there will be disquiet as practitioner and public confidence in the regulation of solicitors is weakened.

You can search for struck off solicitors here

Where to discover solicitors' credentials

Telephone the Law Society on:0870 606 6575 or 0845 608 6565. and ask whether that solicitor has any conditions imposed on their practicing certificate. You could also check that they are a legitimate solicitor using the Law Society's search service.