APPLICATION FOR RESTORATION TO THE ROLL

Transcription

1 No IN THE MATTER OF MICHAEL COVENTRY, former solicitor - AND - IN THE MATTER OF THE SOLICITORS ACT 1974 Mr A G Ground (in the chair) Mr D J Leverton Mr D E Marlow Date of Hearing: 25th May 2006 APPLICATION FOR RESTORATION TO THE ROLL of the Solicitors Disciplinary Tribunal Constituted under the Solicitors Act 1974 By affidavit to which he attested on 29th September 2005 Michael Coventry of Lawson Road, Enfield, Middlesex, a former solicitor, made application to the Tribunal that his name be restored to the Roll of Solicitors. The application was heard at the Court Room, 3rd Floor, Gate House, 1 Farringdon Street, London, EC4M 7NS when Michael Coventry (Mr Coventry) was represented by Andrew Hopper of Queen s Counsel and the Law Society, the Respondent to the application, was represented by Gerald Malcolm Lynch, solicitor and consultant with Messrs Drysdale s Solicitors of Southend. The evidence before the Tribunal included the oral evidence of Mr Coventry, Mr Singleton, Ms Newman and Mr Purcell. On behalf of the Law Society a note of the position on the Law Society s Compensation Fund and a copy extract from Cordery on Solicitors were handed up. Mr Coventry s History 1. At a hearing on 25th April 1996 the following allegations were found by the Tribunal to have been substantiated against Mr Coventry. The allegations were that he had:-

2 2 (i) (ii) (iii) (iv) acted towards a client in circumstances where a conflict of interest might or did arise and failed to insist upon the clients obtaining independent advice in regard thereto; failed to honour the terms of undertakings giving by him to the said clients; failed to respond to correspondence and enquiry addressed to him by other solicitors and the Solicitors Complaints Bureau; by virtue of each and all of the aforementioned, has been guilty of conduct unbefitting a solicitor. Mr Coventry had not appeared and had not been represented. The Tribunal made an order striking Mr Coventry off the Roll of Solicitors. The Tribunal said:- It was a serious breach of the fiduciary relationship existing between a solicitor and his client if a solicitor sees fit to accept loans from a client without ensuring that that client has proper independent advice. The relevant principle is very clear. If the client refuses to take such advice then the solicitor must refuse to accept the loan. In this particular case the respondent gave undertakings to the client to repay of which he was in breach. The breach of a solicitor s undertaking was a most serious matter and would seriously undermine the good reputation of the solicitors profession. Claims had been made upon the Law Society s Compensation Fund. On the face of it, it appeared that those claims had been made in respect of matters other than the undischarged loans made by Mr and Mrs D. It was right that the respondent should be struck off the Roll of Solicitors and be ordered to pay the costs of the application and enquiry. 2. In its Findings dated 7th June 1996 the Tribunal referred to earlier Findings against Mr Coventry and said:- On the 19th July 1995 the Tribunal found the following allegations to have been substantiated against the respondent. The allegations were that the respondent had:- (i) (ii) dishonestly alternatively improperly utilised clients money for his own purposes; acted in breach of the Solicitors accounts Rules 1986 and 1991 in that he drew from client account moneys other than permitted by Rules 7 and 8 of the said Rules and utilised the same for his own alternatively for the benefit of clients not entailed thereto; (iii) contrary to the provisions of section 34 of the Solicitors Act 1974 failed to deliver Accountant s Reports as by the said Rule required;

3 3 (iv) by virtue of each and all of the aforementioned had been guilty of conduct unbefitting a solicitor. Although dishonesty had on that occasion been alleged against the respondent the Tribunal did not find that to have been substantiated. The report of the Investigation Accountant of the Law Society had been clarified by evidence that the shortages on client account were caused by non-delivery of bills of costs or written intimations thereof in circumstances where the client or beneficiaries concerned knew of and had not objected to the charges. The Tribunal considered that the respondent had been guilty of impropriety but not of dishonesty. The Tribunal imposed a fine of 500 and made a fixed order for costs to be taxed if not agreed. Mr Coventry s case for re-admission to the Roll 3. Mr Coventry was admitted as a solicitor in November He was at the date of his application for restoration 59 years of age. 4. Following admission in 1970 Mr Coventry worked for a number of firms in London, Guildford and Brighton. He was married on 30th August 1975, his son was born in 1976 and his wife left him a fortnight before Christmas of that year. 5. Mr Coventry started his own practice in October Until sufficient work was established Mr Coventry took a job as a night porter at the Moorfields Eye Hospital. 6. Initially he practised from home in Wood Green, concentrating mainly on agency probate. At the weekend, after the night shift, he drove to wherever his son happened to be living at the time, on occasion necessitating long journeys, and spent some time with him. Mr Coventry was the most stable influence in his son s life. 7. Mr Coventry s practice provided him with a modest, but reasonable living. He was not then hugely ambitious. 8. Mr Coventry acquired a small office in Palmers Green when his practice had been running for one or two years. In the early stages, he had the assistance of a part-time secretary. When the volume of work justified it, he engaged a part-time legal executive and a permanent full-time secretary. 9. In her petition for divorce, the mother of Mr Coventry s son promised to educate him in the independent sector. Mr Coventry had access to his son on terms imposed by his wife. Not long after the decree was made absolute, Mr Coventry believed that his former wife cashed in or otherwise disposed of the provision she had promised to make for the son. 10. In 1984 Mr Coventry s former wife and her new husband told him that if he did not take care of his then eight year old son they would hand responsibility for him to the local authority. Mr Coventry took over the care of the child thanks to help from his family.

4 4 11. Mr Coventry wished to provide as normal a life as possible for his son who at first attended a local state school and then went to preparatory school on a minor scholarship and subsequently went to public school as a boarder on an open exhibition which alleviated reliance on the not very secure prospect of Mr Coventry s future income. Mr Coventry s son enjoyed academic success and had qualified as a lighting technician. 12. Most of Mr Coventry s business was agency probate (principally the preparation of estate accounts and the winding up of old/difficult/intractable/badly handled cases). He also undertook general work, such as conveyancing, personal injury, occasional criminal cases in the lower courts, licensing applications, inquests, debt collection and routine small time litigation and settling disputes at local comprehensive schools. 13. Whilst in practice, Mr Coventry was the subject of three Law Society monitoring visits. There were a few complaints from clients, resulting in nothing worse than a written rebuke. Mr Coventry provided a high standard of work and high level of service to his clients. 14. In the early nineties, Mr Coventry found it increasingly difficult to manage financially. He took second and third mortgages in order to provide funds to run the practice, pay for school fees, taxes, general living expenses, a succession of old motor cars, and generally stay afloat. 15. In 1992, Mr Coventry was instructed by a firm in Ladbroke Grove to carry out a number of jobs. In one matter, Mr Coventry obtained a grant of representation in the matter of G deceased and administered the estate. He spent a lot of time reporting in person to the deceased s daughter, who was the client of those instructing him and this was done with their knowledge and consent. The visits were of a social as well as a professional nature. 16. Mr Coventry gave the matter careful thought before approaching this lady. She agreed to lend him money (to pay for school fees) and he gave her a written undertaking to pay the money on a specified date. Mr Coventry s ability to pay was based on his view of fee income from the small number of good quality cases he was handling and intended to attract. 17. Mr Coventry was well aware of the rules relating to borrowing money from clients so he told the lady to take advice from an independent solicitor. The solicitor was Mr JR Sorrell. Mr Sorrell had written to Mr Coventry s representatives saying that after thirteen years he did not have a clear recollection of the matter. He had acted for the lady in other matters and there was something at the back of his mind that led him to believe that what Mr Coventry had said was correct and that he had given independent advice to the lady from whom Mr Coventry had borrowed money. She had obtained advice and Mr Coventry verified this by seeing the letter that the solicitor had sent to her, confirming his advice. The money was lent. There were two further loans (from the same source) later that year and further undertakings were given. Mr Coventry did not tell the lady to take separate advice in connection with the two later loans. The agreed rate of interest to be paid by Mr Coventry was that prevailing for judgment debts. Interest was paid until either Midsummer or Michaelmas 1994, by which time the practice income was very poor. Mr Coventry could not afford to

5 5 advertise in the Law Society s Gazette, which provided the source of most of his work. 18. At this time Mr Coventry was very tired. He did not believe that he was ill: he did not seek advice. 19. Mr Coventry had not been paid for a substantial piece of work begun in His Accountant s Report was, as a result of his financial difficulties, overdue. That and a monitoring visit by the Law Society triggered the intervention into his practice on 16th February Mr Coventry was unaware of his right to challenge the decision to intervene. He had neither the emotional or financial resources to do so. 20. When serious allegations against Mr Coventry were first brought before the Tribunal, he defended them and had the support of written testimonials and a reputable witness. The Tribunal found that he had not been dishonest and imposed a modest fine. 21. Because of the intervention, Mr Coventry lost the four files on which he had been working, as well as the right to recover 30,000 of outstanding fees. There were claims on the Compensation Fund, one of which verged on the fraudulent. Mr Coventry had not been able to afford to make any repayment to the Compensation Fund as he did not have the money. Should his application to restore prove successful Mr Coventry would repay the monies paid out by the Compensation Fund. He believed his earning capacity would be increased if he were again to be a solicitor. 22. In November 1995 Mr Coventry was adjudged bankrupt. There was no hope of his repaying the client loan. He lost his home to secured creditors. Currently Mr Coventry lived in a council flat in Enfield and had recently exercised his right to buy it. Apart from this and a few personal items of little value, Mr Coventry had no assets. 23. On 25th April 1996, the second hearing before the Tribunal took place as a result of which Mr Coventry s name was struck off the Roll. Mr Coventry did not attend: he learned of the matter in a discarded newspaper. Had Mr Coventry been aware of the proceedings, he would have defended them. The proceedings and all the preceding correspondence had been sent to Mr Coventry s former home and former practice address, from which he had been evicted. The Law Society would have known by reason of their intervention that he was not practising. 24. For a time subsequent to the intervention Mr Coventry had been in correspondence with the Law Society, seeking to have his name removed from the Roll voluntarily. He did not anticipate disciplinary proceedings. He did not consider appealing the Tribunal s decision. The intervention and his bankruptcy had left Mr Coventry feeling low and exhausted. 25. Mr Coventry had taken on any paid work that was available, much of it soul destroying, and also undertook voluntary work. At the same time he circulated firms of solicitors to try to find probate work, but without success. Mr Coventry had been unemployed for the whole of 1997 and the first eight months of 1998 and the last quarter of 2000.

6 6 26. In 2001 Mr Coventry had prepared estate accounts for S Newman & Co Solicitors. Ms Newman had obtained permission for this from the Law Society. Mr Coventry was not remunerated for this work which he undertook in conjunction with other paid work in the building industry. 27. In May 2002 Mr Coventry was laid off in the building industry job. In December he went to New Zealand to help on his brother-in-law s sheep farm. 28. On 14th February 2003 Mr Coventry attended a job interview with solicitors to do wills, probate and trust work. He did not get the job because of his history. Shortly after that he did another job for Newman & Co, again on an unpaid basis, where he developed a new method of work which made savings in time and cost. 29. Michael Singleton, a solicitor known to Mr Coventry for about twenty years and for whose firm he had done agency probate work in the old days, approached Mr Coventry. Mr Singleton was aware that Mr Coventry had been struck off the Roll and of the section 41 applications and permissions to work for Newman & Co. He offered work to Mr Coventry. 30. Mr Singleton was granted permission by the Law Society to employ Mr Coventry. He started work at Singletons office on 9th June 2003 on a part-time basis. His work had been both satisfactory and cost effective. 31. Mr Coventry liked working within the legal profession: the discipline and service ethos appealed to him. 32. Hardly a day passed without the striking off and what led to it impinging on his conscience. He was, and continued to be, painfully aware of the damage done both to the immediate sufferers, Mr Coventry s own family, and the legal profession at large. 33. With regard to the claims on the Law Society s Compensation Fund there had been five payments in connection with a single estate. One such payment related to Inheritance Tax and interest thereon. That claim should never have been made. It was wholly unjustified as there had been a deed of family arrangement which significantly reduced the estate s tax burden. 34. One payment had been made in respect of sums transferred in respect of costs where no bills had been delivered. Mr Coventry had not been able to deliver a bill because of the Law Society s intervention into his practice. The reality was that Mr Coventry had undertaken a great deal of work in the estate for which he had not been paid. The fourth Compensation Fund payment was in respect of interest on that payment relating to sums transferred in respect of costs where no bills had been delivered. The final payment from the Compensation Fund related to the costs of solicitors acting for the beneficiaries in the estate and was a relatively modest sum. 35. Mr Coventry was a man who worked hard and had the desire to be useful to others. 36. Mr Coventry was a man of extraordinary natural humility who had an innate decency. He had demonstrated dedication and perseverance. His problems stemmed from the fact that he worked himself into the deck. He did not reserve sufficient energy for

7 7 the administrative and business aspects of practice. He did not take timely steps to collect costs or to obtain money on account of costs. Financial problems inevitably ensued. 37. Mr Coventry was supported by Ms Newman and Mr Singleton, the two solicitors for whom Mr Coventry had undertaken work entirely satisfactorily. They spoke highly of him both as a person and with regard to his capabilities in the field of probate work. Mr Purcell, a master at the school formerly attended by Mr Coventry s son, spoke highly of his ability to give sound legal advice and his dedication, decency, and good character. 38. The test to be applied by the Tribunal reflected what a member of the public would think. A well informed member of the public would conclude that if the Tribunal had known the full circumstances it might not have considered imposition of the ultimate sanction. Also that in all the circumstances, including the work done for Newman & Co and Mr Coventry s continuing, two years employment within the legal profession, restoration of his name to the Roll would be entirely appropriate. The Submissions of the Law Society 39. The Tribunal was reminded of the decision in Bolton -v- The Law Society WLR 512 in which the Court of Appeal held:- only infrequently, particularly in recent years, has [the Tribunal] been willing to order the restoration to the Roll of a solicitor against whom serious dishonesty had been established, even after a passage of years, and even where the solicitor had made every effort to re-establish himself and redeem his reputation. and also The second purpose [of the Tribunal s Orders] is the most fundamental of all: to maintain the reputation of the solicitors profession as one in which every member of whatever standing may be trusted to the ends of the earth. To maintain this reputation and sustain public confidence in the integrity of the professional it is often necessary that those guilty of serious lapses are not only expelled but denied readmission. A profession s most valuable asset is its collective reputation and the confidence which it inspires. Because Orders made by the Tribunal are not primarily punitive, it follows that the considerations which would ordinarily weigh in mitigation of punishment have less effect on the exercise of this jurisdiction than on the ordinary run of sentences imposed in criminal cases. It often happens that a solicitor appearing before the Tribunal can adduce a wealth of glowing tributes from his professional brethren. He can often show that for him and his family the consequences of striking off or suspension would be little short of tragic. Often he will say, convincingly, that he has learned his lesson and will not offend again. On applying for restoration after striking off, all these points may be made, and the former solicitor may also be able to point to real efforts made to re-establish himself and redeem his reputation. All these matters are relevant and should be considered. But none of them touches the essential issue which is the need to maintain among members of the public a well-founded confidence that any solicitor whom they instruct will be a person of unquestionable integrity, probity and trustworthiness. The reputation of

8 8 the profession is more important than the fortunes of any individual member. Membership of a profession brings many benefits, but that is part of the price. 40. The Tribunal was also reminded of the additional principles which emerged from decisions of the Tribunal and successive Masters of the Rolls, namely that an application for restoration was not to be regarded as an appeal against the decision to strike off. 41. The successful Applicant must satisfy the Tribunal not only that he is personally fit to be admitted but more importantly he must demonstrate apparent fitness, that is that he is fit in the eyes of the public to be readmitted as a solicitor. 42. The Applicant must satisfy the Tribunal that the public would consider that any profession would be proud to have the Applicant as a member and that public confidence in the profession as a whole would not be damaged by his successful application. 43. Restoration to the Roll is an exceptional course and it was necessary to demonstrate that the original offences occurred in exceptional circumstances. That was not to be confused with exceptional personal rehabilitation. 44. The Tribunal would take account of any continuing loss to the profession either to the Compensation Fund or the Indemnity Fund by reason of the Applicant s defaults and the extent to which the Applicant had repaid those debts. 45. The former Master of the Rolls, Lord Donaldson of Lymington, said in one case:- The problem is, quite simply, one which I have met before and on which I have expressed a view before, namely that however sympathetic one may be towards an individual member of either branch of the legal profession if you fall very seriously below the standards of that profession and are expelled from it there is a public interest and an interest in the profession itself in hardening its heart if any question arises of your rejoining it. 46. Cordery pointed out that there were two hurdles which an applicant for restoration must surmount. First, the former solicitor must demonstrate his complete rehabilitation to the point where, had he not been guilty of his original fault, there were would be no question about his being suitable to be admitted as a member of the profession and the second and much more difficult hurdle to clear was the objective test, namely the need to demonstrate that to restore the former solicitor to the Roll would not in all the circumstances of the case involve any damage to the reputation of the profession. The Tribunal was encouraged by Lord Donaldson, then Master of the Rolls, to ask:- If this was the sort of case where, even if the back history was known (that is whatever explanation and mitigation was available to explain why the solicitor committed the original offence) and without the explanation as to what had happened subsequently, the members of the public would say That does not shake my faith in solicitors as a whole, the danger being that it would be

9 9 irreparably damaging to the profession if members of the public had to enquire or even consider the possibility of enquiring as to whether a solicitor was grade A, a solicitor who had never been guilty of any serious misconduct or grade B, a rehabilitated offender. 47. The Tribunal was invited to take into account the fact that the Respondent, who did not attend the disciplinary hearing at which the striking off order was made, made no application for a rehearing under Rule 25 of the Solicitors Disciplinary Proceedings Rules 1994 and he did not appeal against the Tribunal s decision. The Tribunal should ask itself why Mr Coventry did not seek assistance at that time. The Tribunal s Decision and its Reasons 48. The Tribunal accepts that Mr Coventry has achieved a high level of personal rehabilitation. Members of the solicitors profession and lay persons have spoken highly of Mr Coventry s decency and good character. The members of the profession speak also of his high level of competence in probate work. 49. The Tribunal has given Mr Coventry credit for the fact that he has suffered personal and financial difficulties and has come through them. 50. The Tribunal has also taken into account the fact that despite two sets of disciplinary proceedings where allegations against Mr Coventry had been substantiated, there had been no finding that he had been dishonest. 51. It was clear in the earlier Findings of the Tribunal that the Respondent s alleged improper utilisation of clients money had come about where he had been entitled to the money but had not delivered bills of costs to the clients concerned. Those clients knew of and had not objected to his charges. 52. On the second occasion the Tribunal took the view that it was a serious breach of the fiduciary relationship existing between the solicitor and his or her client if a solicitor sees fit to accept loans from a client without ensuring that the client had proper independent advice. Whilst it was not open to Mr Coventry to appeal against the decision of the Tribunal made at the second hearing of allegations against him, it was noted that Mr Coventry had not been aware of the second disciplinary proceedings and he had provided a plausible explanation for this. Further, Mr Coventry explained that had he been aware of the second set of allegations he would have been in a position to defend them. Because of the passage of time Mr Coventry has not provided conclusive evidence that the lady from whom he borrowed money obtained independent advice. The Tribunal considers it very likely that she did so having accepted Mr Coventry s recollection of what occurred which was supported by the solicitor who acted for the lady at the time in other matters, and who believes that he did give her such advice. Mr Coventry has further explained that the lady in question was not a direct client of his but the client of another firm of solicitors on whose behalf he was undertaking agency probate work. In the light of these explanations the Tribunal has concluded that there were exceptional circumstances surrounding the offences in respect of which the Tribunal had made a striking off order.

10 The Tribunal was concerned that Mr Coventry has not made any repayment of monies paid out by the Compensation Fund. The Tribunal does however recognise that the Respondent had over a period of time been in dire financial straits and even though he had been working for a firm of solicitors for the past two years such work had been on a part-time basis only and his income from that employment was at a modest level. The Tribunal accepted Mr Coventry s assurance that should he be restored to the Roll and his earning capacity thereby increased he would set aside a proportion of his income on a monthly basis to discharge indebtedness to the Compensation Fund. 54. In all of the circumstances of this case, members of the public knowing the whole of the facts would not consider that it was inappropriate to restore Mr Coventry to the Roll of Solicitors. 55. Mr Coventry had agreed to meet the costs incurred by the Law Society in connection with its response to this application, which were put at 1, The Tribunal trusts that Mr Coventry has learned a hard lesson about the problems and difficulties surrounding a solicitor who seeks to practise as a sole principal. 57. The Tribunal made the following Order:- The Tribunal Orders that the application of Michael Coventry of Lawson Road, Enfield, Middlesex, for restoration to the Roll of Solicitors be GRANTED and the Tribunal further Orders that he do pay the costs of the response of the Law Society to this application fixed in the sum of 1,618. Dated this 27 th day of July 2006 On behalf of the Tribunal A G Ground Chairman