SOLICITORS DISCIPLINARY TRIBUNAL. IN THE MATTER OF THE SOLICITORS ACT 1974 Case No and. Before:

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1 SOLICITORS DISCIPLINARY TRIBUNAL IN THE MATTER OF THE SOLICITORS ACT 1974 Case No BETWEEN: SOLICITORS REGULATION AUTHORITY Applicant and ANDREW PAUL CLINCH Respondent Before: Mr D. Green (in the chair) Mr J. Evans Mr M. R. Hallam Date of Hearing: 3-4 January 2018 Appearances Mr Jonathan Goodwin, solicitor advocate, of Jonathan Goodwin Solicitor Advocate Ltd, 69 Ridgewood Drive, Pensby, Wirral CH61 8RF for the Applicant. The Respondent, Mr Andrew Clinch, appeared and represented himself. JUDGMENT

2 2 Allegations 1. The allegations made against the Respondent, Mr Andrew Clinch, in a Rule 5 Statement dated 23 September 2016 were that: 1.1 he facilitated, permitted or acquiesced in personal injury claims being intimated and pursued in circumstances where the purported client(s): a) had not returned signed client retainers, signed conditional fee agreements ( CFAs ), or any other written confirmation of instructions stating they wished the firm to act on their behalf; and/or b) had notified the firm they did not wish to pursue a personal injury claim, and in so doing he breached Principles 2 and/or 6 of the SRA Principles 2011 ( the Principles ); 1.2 he made representations, in the alternative permitted, facilitated or acquiesced in representations being made, to Third Party Insurers ( TPI ) which were inaccurate and misleading, and in so doing he breached Principles 2 and/or 6 of the Principles; 1.3 he paid prohibited referral fees in a manner which contravened Section 56 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 ( LASPO ), and in so doing he breached Principles 2 and/or 6 of the Principles and failed to achieve Outcome 9.8 of the SRA Code of Conduct 2011 ( the Code ); 1.4 he failed to produce to the SRA upon request, records and management information to demonstrate that payments made to an introducer(s) were not prohibited referral fees and in so doing breached Principles 6 and/or 7 of the Principles; 1.5 he failed to ensure that agreements with introducers were in writing, and in so doing, breached Principle 6 of the Principles and failed to achieve Outcome 9.7 of the Code; 1.6 he failed to inform clients of any financial or other interest which an introducer(s) had in referring them to his firm and in so doing, breached any, or all, of Principles 2, 3, 4 and 6 of the Principles and failed to achieve Outcome 9.4 of the Code; 1.7 he failed to ensure adequately, or at all, that employees were properly supervised and trained and in so doing, he breached Principles 5 and/or 8 of the Principles and failed to achieve Outcomes 7.6 and/or 7.8 of the Code; 1.8 he paid money into client bank account which was not client money in breach of Rule 14.2 of the SRA Accounts Rules 2011 ( SAR 2011 ). 2. The further allegations made against the Respondent in a Rule 7 Statement dated 22 September 2017 were that:

3 he intimated a claim for costs to clients which he knew, or ought to have known, he could not justify, in the alternative he permitted, facilitated or acquiesced in such claims being intimated, and in so doing, breached Principles 2, 4, 5 and/or 6 of the Principles; 2.2. he failed adequately, or at all, to ensure that advice to clients was provided as to the risks and benefits involved in pursuing a claim(s) and/or their potential costs liability, and in so doing, breached Principles 2, 4, 5, and/or 6 of the Principles; 2.3. he failed and/or delayed in complying with a decision of the Legal Ombudsman dated 21 April 2016 that the firm should pay to a client of the firm, Mr DC, the sum of 8,202.70, and in so doing breached Principle 2, 4, 5, 6 and /or 7 of the Principles. Documents 3. The Tribunal reviewed all the documents submitted by the parties, which included: Applicant: - Application dated 23 September 2016 Rule 5/8 Statement and exhibit JRG1 dated 23 September 2016 Rule 7 Statement and exhibit JRG1 dated 22 September 2017 Statement of Lesley Horton dated 12 May 2017 Statement of costs for the hearing on 3 and 4 January 2017 Respondent: - Respondent s Answer to the Rule 5 Statement, dated 26 October 2016, with exhibits Respondent s mitigation statement, with exhibits AC1 to AC5 dated 25 April 2017 Respondent s to the Applicant and Tribunal dated 4 October 2017 Respondent s Admission and Response to Statement of Costs dated 22 December 2017, with exhibits Other: - Memorandum of Case Management Hearing 4 August 2017 Memorandum of CMH of 25 September 2017 Copy Newell-Austin v SRA [2017] EWHC 411 (Admin) ( Newell-Austin ) Preliminary Matter 4. The Tribunal noted that the proceedings began in September 2016, with allegations made against the Respondent and another, unadmitted person, in a Rule 5/Rule 8 Statement. That matter had been listed for hearing on 16 to 18 May The substantive hearing against this Respondent was adjourned as a second Forensic Investigation Report ( FIR 2 ) dated 25 April 2017, had indicated that further allegations may be brought against the Respondent; those allegations were then made

4 4 in the Rule 7 Statement dated 22 September The proceedings against the unadmitted person, Mr Davis, were concluded on 16 and 17 May 2017, when a s43 Order was made against him, and he was ordered to pay costs of 2,000. Factual Background 6. The Respondent was born in 1980 and was admitted to the Roll of Solicitors in His name remained on the Roll of Solicitors at the date of the hearing. 7. At all relevant times the Respondent carried on practice on his own account as Clinch Solicitors Ltd at Barnett House, 53 Fountain Street, Manchester M2 2AN ( the Firm ). The facts and matters relied upon in support of the allegations in the Rule 5 Statement 8. The Forensic Investigation Department ( FI ) of the Applicant carried out an inspection of the books of account and other documents of the Firm which commenced on 28 April 2014 and led to the production of a Forensic Investigation Report dated 27 November 2014 (the first FI Report ). 9. The Forensic Investigation Officer ( FI Officer ) reviewed 36 personal injury client matter files and noted that: in 22 of the client matters the Firm had failed to obtain signed client retainers, signed Conditional Fee Agreements ( CFAs ), or any other written confirmation of instructions from clients stating they wished the Firm to act on their behalf; in 22 of the client matters the client had notified the Firm that they did not wish the Firm to pursue a personal injury claim; in 2 matters, Mr R and Mrs A, the clients had informed the Firm that they had not given their instructions and did not wish the Firm to pursue personal injury ( PI ) claims on their behalf. Contrary to those instructions the firm pursued the claims and received damages on behalf of Mr GR and Mrs MA (who was incorrectly named in some of the Firm s documentation as Ms J) which were paid into client bank account. Given they were not clients of the firm, it was alleged that the damages recovered from the TPI were not client monies and should not have been paid into client bank account. 10. The FI Officer identified that the Firm completed claim notification forms ( CNF s ) on behalf of clients who had indicated they had not instructed the firm to pursue PI claims. 11. Sections L and N of the CNF s confirmed to TPI s that the client(s) had entered into CFAs and that the Firm was acting as the potential claimant s solicitor. It was alleged that such representations were inaccurate and misleading. 12. Further, it was noted that representations were made to TPIs indicating the clients would be attending medical examinations, with subsequent attempts to obtain premedical offers in circumstances where the client(s) had cancelled instructions to

5 5 the Firm and had no intention of attending a medical examination. It was alleged that these representations were inaccurate and misleading. 13. The Firm received work from one introducer, Access2Justice ( A2J ). Invoices raised by associated companies for costs incurred by A2J were settled by the Firm. Other than the narrative contained on the invoices sent to the Firm by the associated companies, the Respondent was unable, during the investigation, to specify the exact services provided to them or provided to A2J. 14. The FI Officer noted that in the period 30 August May 2014, the Firm settled invoices for services provided to and by A2J in the sum of 992, The Respondent was asked to produce records and management information to demonstrate the payments made to A2J and its associated companies were not prohibited referral fees, but failed to do so. It was further alleged that the Respondent failed to notify clients of the financial or other interest, of A2J or its associated companies in referring clients to the Firm. 16. Other than the matters particularised below there were no identified breaches of the SAR However, as indicated above, the FI Officer identified two matters where the firm had received cheques from TPIs and which were paid into client bank account when the named individuals had not provided instructions to the Firm to act on their behalf and who were not, therefore, clients of the firm. The two matters were Mrs MA and Mr GR. Mrs MA 17. The fee earner with conduct was the Mr Davis who was named as the Second Respondent in the Rule 5/Rule 8 Statement. As noted above, the Firm incorrectly named Mrs MA as Ms J in some documents. 18. On 1 July 2013 the Firm completed a telephone confirmation sheet recording the fee earner's discussion with Mrs MA. On 26 July 2013 the medical appointment agency, Speed Medical, wrote to the Firm indicating that they had received communication from your client that they no longer wish to pursue their personal injury claim. 19. By letter dated 9 August 2013 the TPI, Direct Line, wrote to the Firm acknowledging receipt of Mrs MA s CNF, admitted liability and released payment of Stage 1 costs in the sum of 240. Mr Davis failed to inform Direct Line that Mrs MA did not wish to pursue her claim, even though he and/or the Firm had knowledge of cancellation of instructions on 26 July By letter dated 9 August 2013 Mr Davis wrote to Mrs MA and said, amongst other things, Further to your previous instructions, we confirm that we previously closed off your file of papers. However, before doing so we had already submitted details of your claim to the Defendant insurers. We are legally obliged to inform you of any offers which we receive and confirm that we have today received an offer from the Defendant to settle your claim for personally (sic)

6 6 injuries in the sum of 1, After deducting 25% of your damages in respect of our costs plus in respect of the After The Event insurance policy, you will receive the net sum of By letter dated 21 August 2013 the Mr Davis wrote to Mrs MA indicating that in the event the cheque for was banked we presume the offer is accepted. 22. Within the matter file was an Authority to Settle Claim form, which was not signed or dated. 23. By letter dated 22 August 2016 the TPI sent a cheque to the firm in the sum of 1,000 payable to [Ms J] only. The cheque was endorsed a/c payee only. The client ledger recorded receipt of the damages cheque into client bank account on 29 August A file note on the client matter file recorded a telephone conversation that took place on 4 September 2013 with S Solicitors acting on behalf of Mrs MA. The note recorded, amongst other things, that, The client has said that she has never signed any paperwork or accepted any offers and therefore is unsure why she has received a payment. 25. By letter dated 11 September 2013 S Solicitors wrote to the Firm correcting her name and stating, amongst other things, We have been informed by our client that she did not instruct you to act on behalf of her in relation to the above accident and that she did not sign any agreement with your firm authorising you to act on her behalf or authorising you to accept the pre-medical offer. Mr GR 26. Mr Davis was the fee earner responsible for this matter. The first document held on the electronic file was an dated 5 August 2013 from an associate solicitor of the Firm to Mr Davis which said, Hi, this client has ed to cancel. He asked not to be contacted again. 27. A file note dated 6 August 2013 recorded, Client has cancelled, please cancel any arranged sign ups. Cheers, Mike. 28. However, Mr Davis continued to process the claim. On 12 September 2013 the TPI NIG, wrote to the firm indicating that the maximum pre-medical offer they could make was in the sum of 1, By letter dated 18 September 2013 Mr Davis wrote to Mr GR and said, amongst other things, Further to your previous instructions, we confirm that we previously closed off your file of papers. However, before doing so we had already submitted details of your claim to the Defendant insurers. We are legally obliged to inform you of any offers which we receive and confirm that we have today received an offer from the Defendant to settle your claim for personally (sic) injuries in the sum of 1, After deducting 25% of your damages in respect of our costs plus in respect of the After The Event insurance policy, you will receive the net sum of

7 7 30. On 10 October 2013 the Stage 2 Settlement Pack and Response form recorded acceptance of the offer and the statement of truth read, I am the claimant s legal representative. The claimant believes that the facts stated in this claim form are true. I am duly authorised by the claimant to sign this statement. 31. The matter file did not disclose any evidence that Mr GR was aware of, agreed to or authorised the Firm to accept the TPI offer. Furthermore, it was not apparent that Mr GR was aware of the facts stated in the settlement pack, or had authorised the Firm to sign the statement. On the same day the Firm wrote to Mr GR informing him he would receive a net payment of By letter dated 21 October 2013 NIG forwarded a cheque to the Firm in the sum of 1,250.00, the cheque being crossed and endorsed A/C payee and payable to [Mr GR]. The client ledger recorded receipt of the damages into client bank account on 25 October By letter dated 25 October 2013 Mr Davis wrote to Mr GR and said, amongst other things, We are pleased to enclose the cheque in settlement of your claim in the sum of We shall now close our file following the successful completion of your claim. 34. By letter dated 6 November 2013 Mr GR wrote to the Respondent and said, Firstly, I strongly object to your suggestion that you have settled my claim. I have NOT made any claim whatsoever. Secondly, you wrote to me a few weeks ago, requesting me to approve the said claim and enclose an authorisation form for me to sign, to agree to this. I tore this up and disposed of it as I did not agree or consent to any claim being made. I would be interested to see any documents and papers in a file you have, that suggest I DID indeed give you authority to act on my behalf. I wish to receive any documentation relating to this allege claim that you hold. Such as my objection to the action you have taken, solely to secure the from the other insurers that I have provided full details to the Solicitors Regulatory Authority and Legal Ombudsman. All your actions have succeeded in doing, is escalating everyone s insurance premiums and to boost your own profits into the bargain, all as a result of a very minor traffic accident, in which no injury was sustained by any party and no personal injury claim was ever made with anyone including yourself. I would be very interested to hear your explanation as to why you thought it appropriate to take the actions you have, as outlined by your most recent letter. 35. By letter dated 6 December 2013 the Firm (in a letter which bore the Respondent s initials) wrote to NIG returning the damages cheque indicating that this matter has been settled in error.

8 8 36. During interview with the FI Officer the Respondent was asked to explain how the cheques payable to Ms J and Mr GR were paid into client bank account when neither were clients of the Firm. The Respondent indicated that it was standard practice for cheques payable to the client to be paid into client bank account. 37. During interview on 23 June 2014 the FI Officer suggested to the Respondent that the TPI had been misled as to the true position in relation to Mr GR s claim. The FI Officer said, amongst other things, But somebody s advised the insurer that you ve got authority to accept it. So, the insurer at that point is being misled by this firm as to what the true position is. A colleague of the FI Officer then said, Do you accept that? The Respondent replied, Yeah. Completion of claim notification forms (CNFs) 38. The FI Officer noted from a review of client matter files that certain clients raised concerns that the Firm had acted without their authority. 39. The CNFs completed by the Firm, included the following sections: - Section L Funding The Claimant has entered into a conditional fee agreement in relation to this claim, which provides for a success fee.... Section N Statement of Truth. I am the Claimant s Solicitor The Claimant believes that the facts stated in this claim form are true. I am duly authorised by the Claimant to sign this statement. 40. The FI Officer noted that in 22 of the files reviewed, clients had not returned CFAs, signed authorities or signed retainers confirming instructions for the Firm to act. 41. New Claim Forms were completed and provided by the referrer or introducer to the Firm, an example of which was within the case papers. The form provided details of the potential claimant s name, address, date of birth, telephone number and a brief description of the accident. The information allowed the fee earner within the Firm to make telephone contact with the potential client and complete the initial questionnaire, an example of which was within the case papers. A note was then completed by the fee earner, the wording of which was the same or similar on all new matters as identified by the FI Officer and recorded, Taking initial instructions from the client. Considering the law and facts. Advising clients accordingly. One hour was recorded as being the time spent in respect of same. An example of such a note was within the case papers. 42. The FI Officer noted following her review of the client matter files and the electronic files provided to her, that no record of the details of the discussions between the fee earner and the client were retained. There were no records, either prior to, or at the time of submission of the CNF onto the Portal, of any advice given relating to the CFA, or any record of the clients consent to enter into such an agreement. 43. Following completion of the initial questionnaire the Firm would submit the CNF to the Portal. At the same time, the Firm would issue client care documentation to include confirmation of instructions, CFA, legal expense insurance information and

9 9 various other authorities to the client. The FI Officer noted that a copy of the CNF was not included in the initial documentation sent to the client and, as such, the client was not provided with an opportunity to review the statement of truth at Section N of the CNF. 44. During interview on 30 September 2014 the FI Officer discussed with the Respondent the completion of Section L of the CNF. 45. The Respondent suggested that information, including advice on funding and the procedure, was dealt with during the initial telephone conversation and was recorded on the initial questionnaire. The discussion that followed between the FI Officer and the Respondent was set out in the first FI Report. 46. On 8 October 2014 the IO sent to the Respondent a list of questions in relation to Section L and N of the CNF. The Respondent replied on 20 October In response to a query as to why the client matter file did not record the initial telephone discussion the Respondent said, The telephone calls are clearly documented contemporaneously. No copies of contemporaneous notes were provided with the response. The Respondent confirmed that the statement at Section L was correct and that in response to a suggestion that the firm had misled the TPI he said, Clinch Solicitors do not mislead third party insurers. 48. In relation to Section N Statement of Truth, the Respondent was asked to provide in relation to 16 named clients documentation to confirm they had been provided with the CNF form. The Respondent replied and said, amongst other things Clinch Solicitors have taken instructions and received signed retainers and initial documentation from over 8,000 clients. A small sample of which is attached. The sample did not contain any information relating to the 16 named clients as requested by the FI Officer. 49. In response to the FI Officer s question as to whether the Statement of Truth had misled TPIs, the Respondent replied No... Clinch Solicitors do not mislead third party insurers. 50. The FI Officer asked if copies of the CNF were provided to clients at any stage of their claim to allow them to confirm that the facts stated therein were true. The Respondent s reply dated 20 October 2014 did not deal with the question. 51. By dated 12 June 2014 the FI Officer asked the Respondent to provide copies of signed CFAs in relation to 28 named client matters. By dated 19 June 2014 the Respondent replied indicating he was only able to produce two signed CFAs and said, The other clients either did not proceed and did not sign a CFA or did not sign a CFA but proceeded with the claim. 52. The FI Officer noted that in 23 of the client matters reviewed, clients had not signed a CFA and had notified the Firm that they did not wish to pursue a personal injury claim, or did not communicate with, or respond to correspondence they received from the Firm.

10 The first FI Report exemplified four matters, namely: Mrs SS; Mr WR; Master JJ, Master IJ and Miss MJ; and Mr RS. The first FI Report also particularised extracts from the file reviews in relation to: Mrs VM and Mrs MA. Misleading TPIs 54. The FI Officer identified 5 cases where, after receiving notification that the client did not wish to pursue a personal injury claim, the Firm implied to the TPI that the claim was ongoing. The identified matters were: Miss MJ; Mr A; Mr GR; Mrs MA; and Mr P. 55. In respect of these matters the Firm was informed by Speed Medical Agency that the clients had cancelled their appointment and were not pursuing personal injury claims. Notwithstanding that notification the Firm continued to pursue the claims. 56. By way of example, Mr Davis wrote to NIG on 23 August 2013 in the matter of Mr GR and said, We anticipate receiving details of our client s medical appointment within the next few weeks. Before we proceed with this please confirm if you wish to put forward any pre-medical offers on this occasion. From our initial instructions we are advised that our client sustained a whiplash type injury to the neck and shoulders lasting approximately 4-6 months. However, Mr Davis was aware by 6 August 2013 that Mr GR did not wish to pursue a claim. 57. During interview on 30 September 2014 the Respondent indicated that he did not know why those letters were sent to the TPI. In response to one of the questions raised by the FI Officer and sent to the Respondent on 8 October 2014, as to why the firm had issued letters to the TPI in the knowledge that clients would not be attending medical appointments the Respondent said, We are under a duty to act in the best interests of each client. If the client does not wish to attend a specific appointment. then this is their wish. The Applicant s position was that this response failed to address the point. 58. The Respondent was also asked to explain why the firm pursued pre-medical offers without instruction or authority from the clients concerned. The Respondent said with respect to Mr GR, Mrs MA, Mr P and Mr A, The client has provided detailed/clear instructions. to pursue a claim for personal injury on their behalf. 59. The first FI Report indicated that, contrary the Respondent s suggestion, the position in relation to those individuals was as follows: Mr GR File notes dated 5 and 6 August 2013 stated: This client has ed to cancel. He asked not to be contacted again. client has cancelled. Please cancel any arranged sign ups. However, on 23 August 2013 Mr Davis notified the TPI that the Firm was anticipating receiving details of Mr GR s medical appointment and made enquiries as to a possible pre-medical offer. During interview on 23 June 2014 in

11 11 response to a query as to why such letter had been sent the Respondent said, It shouldn t go out, should it. that s an exception to the rule isn t it. Mrs MA Mrs MA had not instructed the Firm. By letter dated 11 September 2013, following receipt of the damages cheque, S Solicitors acting on behalf of Mrs MA, wrote to the Firm and said that their client had informed them, that she did not instruct you to act on behalf of her in relation to the above accident and that she did not sign any agreement with your firm authorising you to act on her behalf or authorising you to accept the pre-medical offer. By letter dated 25 September 2013 the Respondent replied to S Solicitors and said, amongst other things, It appears that there has been an administrative error in assuming that [Mrs MA] had accepted the pre-medical offer and therefore the claim was settled. I have carried out a full review of the file and am unable to find any information to suggest that [Mrs MA] had changed since her instructions on 1 July 13. However, the Firm had been informed by Speed Medical on 26 July 2013 that We have received communication from your client that they no longer wish to pursue their personal injury claim. Mr P A file note recorded that on 16 August 2013 Mr P telephoned the Firm and notified them that, He wanted to cancel claim and hasn t signed any papers. No particular reason given. On the same day, Speed Medical notified the Firm that Mr P was not pursuing a claim. Notwithstanding that information, by letter dated 22 August 2013 the Firm notified the TPI that they were anticipating receiving details of Mr P s medical appointment and enquired as to a possible pre-medical offer. Mr A A file note recorded that on 30 August 2013 Mr A telephoned the Firm and notified them that, As advised I will neither be pursuing this claim or attending the medical examination on 17 Sept 13. On the same day, Speed Medical notified the Firm that Mr A was not pursuing the claim. Notwithstanding that knowledge, on the 30 August 2013 the Firm notified the TPI that they were anticipating receiving details of Mr A s medical appointment and enquired as to a possible pre-medical offer. 60. The FI Officer asked the Respondent if the submission of letters to TPIs were incorrect. The Respondent said, amongst other things, It would appear on some of these matters the letters should not have gone out. 61. The FI Officer asked the Respondent whether the contents of the letters to the TPIs were misleading, to which he responded, It would appear on some of these matters the letters should not have gone out

12 12 Introducers 62. Since 1 April 2013 there has been a prohibition on the payment and receipt of referral fees in personal injury cases as a consequence of the implementation of Sections of LASPO. 63. The Respondent indicated to the FI Officer that following the ban on the payment of referral fees, the Firm had terminated all referral fee agreements that involved the payment of a referral fee by the firm to a claims management company ( CMC ). 64. Prior to the ban on the payment of referral fees becoming effective from 1 April 2013, the Firm paid referral fees for the introduction of work. 65. The Respondent dealt with one introducer, A2J, and estimated that the relationship with A2J commenced on or about 1 May No written agreement was in place. The Firm confirmed that the role of A2J was to source potential clients based on information provided to them by data brokers. 66. A2J introduced potential clients to the Firm through its marketing/operational arm, M Consultancy Ltd. 67. The Firm made regular payments to M Consultancy, albeit, the payee was recorded on the office bank statement as MC who was the sole director and shareholder of M Consultancy Ltd. The FI Officer noted that there were connections between A2J and other companies, namely: Blue Claims Ltd, The Land of Claims Ltd, and DF Consultants Ltd. 68. The Respondent explained that A2J was responsible for the introduction of PI claims to the Firm, the marketing arm of A2J was operated through M Consultancy Ltd, and a call centre service was operated through Blue Claims Ltd. 69. During interview on 4 June 2014 the Respondent confirmed that a written agreement was not in place with A2J. An extract of the interview on 4 June 2014 was set out in the first FI Report, which was within the case papers. 70. The FI Officer referred the Respondent to the requirement that the Firm s financial arrangement with an introducer should be in writing, to which the Respondent said, amongst other things, It was our understanding that following the ban of referral fees this was no longer a requirement and so an agreement was not entered into. 71. The first FI Report particularised the payments made to A2J and the companies providing services to A2J as follows:

13 13 Payments from office bank account DF Consultants Ltd 5 February to 30 May , Blue Claims Ltd 6 March to 16 May , M Consultancy Ltd (MC) 10 October 2013 to 26 February Invoices paid by the firm Access 2 Justice Marketing agreement February, March and May , ( per month) Land of Claims Ltd Marketing Services including Advertising, Consultancy fees Vetting clients, Administration, Reporting. Payments shown include VAT 2 June 2014 (Invoice No.1 ) 27, June 2014 (invoice No 2) 25, June 2013 (invoice No 3) 29, , DF Consultants Ltd Consultancy Services, Consultancy Solutions, Consultancy/sales/ Sales solutions/sales help Payments shown include VAT 5 March 2014 (Invoice No 56) 43, March 2014 (Invoice No 67) 54, April 2014 (Invoice No 69) 61, April 2013 (Invoice No 81) 54, May 2014 (Invoice no 86) 120, June 2014 (invoice no 87) , The Respondent explained that the payments were the Firm s contribution to services provided. When asked to specify the services provided the Respondent said, I guess you re sort of getting hung up on, we can either pay Access 2 Justice direct or pay

14 14 M Consultancy. It is really more a commercial thing, than, you know, it s not like, we ve done this bit, can you pay for this. it s more the service offered, and he ll explain how he wants to be paid. It wouldn t be really. What have they done for that because it would be we ve had the claims, these are the costs. It s more what the payment is rather than, you know, who Access2Justice are invoicing through. The service offered through Access2Justice because they re regulated to operate. You can t operate in this field without the regulation but they might invoice us through a different arm. 73. The Respondent's father, Mr JC, indicated the Firm was contributing to the running costs of A2J. He confirmed that the Firm had no financial interest in A2J and nobody associated with the Firm had any financial interest in A2J or the associated companies. 74. Mr JC said, as to why payments were made, amongst other things, because that is the arrangement that we ve got with Access2Justice to actually make, make those payments. The reason we pay is because we get claims and that s, that s the ultimate. the business won t survive unless we get claims. Clinch Solicitors will not survive you know if we don t get any claims. So what, what the arrangement we had with Access2Justice is that they would send claims to Clinch Solicitors. 75. The FI Officer asked the Firm to provide details of records and management information they retained in connection with its relationship with A2J, and the associated companies, to demonstrate compliance with Outcome The Respondent responded on 20 October 2014, Outcome (9.8) states you do not pay a prohibited referral fee. Clinch Solicitors confirmed they comply with Outcome The Respondent did not provide the requested records and management information. 78. A review by the FI Officer of client care letters to potential clients showed that the Firm did not make any reference to the fact that A2J had any financial or other interest in referring clients to the Firm. 79. On 8 October 2014, the FI Officer asked the Respondent to confirm whether he had drawn to the attention of clients the financial arrangements between the Firm and A2J. The Respondent replied on 20 October 2014, and said, As advised in the interview it was our understanding that following the ban of referral fees this was no longer a requirement and so our initial letter of instruction was amended at the time of the referral fee ban. We have also now amended our initial instruction taking sheet. Allegation The Respondent intimated and pursued PI claims in circumstances where the purported clients had not returned signed documentation confirming that they wished the Firm to act on their behalf, and/or where purported clients had notified the Firm that they did not wish to pursue a PI claim. 81. The FI Report noted that individuals had raised complaints directly with the Firm and the Applicant that the Firm had acted without their authorisation.

15 In 22 of the client matter files reviewed by the FI Officer clients had not returned signed CFAs, signed authorities or signed retainers confirming instructions for the Firm to act. 83. On 12 June 2014 the FI Officer asked the Respondent to provide copies of signed CFAs in relation to 28 named client matters. On 19 June 2014 the Respondent sent an to the FI Officer indicating he was only able to produce two and stating, The other clients either did not proceed and did not sign a CFA or did not sign a CFA but proceeded with the claim. 84. The FI Officer noted from a review of 23 matter files that in those cases where the clients had not signed a CFA, they had notified the Firm that they did not wish to pursue a PI claim or did not communicate with, or respond to any communication they received from the Firm during the progression of the purported claims. 85. The first FI Report exemplified certain matters: a) Mrs MA. As set out at paragraphs 9, 16, 17 to 25 and 59 above. b) Mr GR As set out at paragraphs 9, 16, 26 to 37 and 56 to 59 above. c) Mrs SS This matter was dealt with by a fee earner other than Mr Davis. On 13 May 2013 a client questionnaire was completed by the fee earner. The CNF completed by the Firm, on behalf of Mrs SS, recorded that she had entered into a CFA on 15 May On 28 May 2013 the Firm received notification from the medical agency, Speed Medical, that Mrs SS did not wish to pursue a claim. The Firm had on 15 May 2013 sent a number of documents to Mrs SS, copies of which were within the case papers. By Memorandum dated 1 July 2013 from the fee earner to the Respondent s father it was confirmed that Mrs SS did not wish to pursue a claim and, she has not signed any paperwork. TPI have concerns regarding the case and have put further questions to our client, therefore no pre-med offers are to be made. By letter dated 1 July 2013 the Firm wrote to Mrs SS indicating that as she did not wish to pursue a claim she was liable for the Firm's costs claimed in the sum of 1, Mrs SS provided a witness statement dated 28 August 2014, which was within the case papers. Mrs SS recalled receiving a telephone call on 15 May 2013 from a person she believed to be the Respondent. (As noted below, the Respondent s position was that this call was not made by him, but by someone

16 16 with the same first name). Mrs SS stated that on the evening of 15 May 2015 a courier delivered documents to her house. She did not sign any of the paperwork and informed the courier she did not wish to pursue a claim. Mrs SS also referred to her letter of complaint to the Firm dated 4 July 2013 in which she confirmed, amongst other things, that she had not given the Firm instructions to act on her behalf. Mrs SS concluded her statement by stating: I did not sign any paperwork received from the firm either by post or any produced to me, in my home by the courier. I did not enter into a conditional fee agreement with the firm. I did not instruct the firm to complete a claims notification form to forward the same to the defendant insurance company on my behalf. I have not seen a claims notification form. I did not instruct the firm to make a claim for personal injury on my behalf. d) Mr WR Mr Davis was the fee earner with conduct of the matter. A CNF completed by the Firm on behalf of Mr WR recorded at Section L that he had entered into a CFA on 20 October Following the Firm's letter to Mr WR dated 22 October 2013, Mr WR ed the Firm on 18 November 2013 informing it, that amongst other things, I wish to make an absolutely clear that I have not and do not have anything to do with this fraudulent claim!!. Whilst ethics do not pay the bills, I expect Solicitors to act ethically. In my opinion, your action is no more than having a punt at a claim!! I have no reason to claim anything. On 18 November 2013 Mr Davis spoke to Mr WR and sent him an in which he suggested that the case was opened in error. However, at the date of Mr Davis reply to Mr WR on 18 November 2013, the client matter had been in progress for a period of approximately 1 month. The file closure form completed by Mr Davis said, Client has never instructed us to make a claim and has reported us to the SRA. I think we set this one up as a punt. Mr Richmond provided a witness statement dated 3 October 2014, in which he said, amongst other things: I confirm that I have never instructed the firm to represent me in a personal injury claim or given them details of my road traffic accident either by letter, telephone, , text or fax.

17 17 I can confirm that I did not, at any time, sign any documentation instructing the firm to act on my behalf in any personal injury claim. I can confirm that I did not at any time enter into or sign a Conditional Fee Agreement with the firm. I never agreed to the firm completing a claims notification form to send to the relevant defendant insurance company on my behalf. I do not know how or when the firm became aware of my road traffic accident or how they obtained my personal details. I have registered a complaint with the firm with respect to their attempt to pursue a personal injury claim on my behalf without my knowledge or consent. e) J Children Mr Davis was the fee earner with conduct of the matters relating to the minor children of Mrs RJ. The client questionnaire was completed on 9 July The Firm completed CNFs on behalf of each child and recorded at Section L that a CFA had been entered into on 11 July On 15 July 2013 the TPI admitted liability. On 16 July 2013 the medical agency, Speed Medical, informed the Firm that Mrs RJ did not wish to pursue a claim on behalf of her daughter, Miss MJ. Mr Davis did inform the TPI but rather wrote to the TPI in relation to Miss MJ and said, We anticipate receiving details of our client s medical appointment within the next few weeks. Before we proceed with this, please confirm if you wish to put forward any pre-medical offers on this occasion. As at the date of that letter, Mr Davis was aware that Mrs RJ did not wish to pursue a claim on behalf of her daughter. By letter dated 31 July 2013 Mr Davis wrote to Speed Medical cancelling instructions in the matter and the appointment arranged in respect of the children. However, on the same day Mr Davis wrote to the TPI making enquiries regarding pre-medical offers in precisely the same terms as those set out for Miss MJ above. Mr Davis was aware that Mrs RJ was not pursuing a PI claim on behalf of her sons J and I when he wrote the letters dated 31 July 2013 intimating and pursing claims. Mrs RJ provided a witness statement dated 17 September 2014 in which she said, amongst other things,

18 18 Allegation 1.2 I did not sign any paperwork received from the firm either by post or . I did not enter into conditional fee agreements on behalf of my children with the firm. I did not instruct the firm to complete claims notification forms to forward the same to the defendant insurance company on behalf of my children. I have not seen the claims notification forms. I did not instruct the firm to make claims for personal injury on behalf of my children. The Respondent was provided with a copy of Mrs RJ s statement and said, amongst other things, It is clear that in these circumstances that the client is seeking to make a fraudulent claim. This behaviour is clearly fundamentally dishonest. Clinch Solicitors are currently taking advice as to whether to pass this information on to the Insurance Fraud Enforcement Department. It may well be that proceedings are brought against this client for contempt of court or a criminal prosecution regarding the same behaviour. f) Mr RS This matter was particularised in the first FI Report and is not set out here. g) Mrs VM This matter was particularised in the first FI Report and is not set out here. Contained within the file was a memorandum dated 25 January 2013 from the fee earner to John which read, Hi John, this cl already has HH (other solicitors) acting and so I am closing the file. The cl wasn t going to claim but we submitted it for a pre-med to give it a go. 86. It was the Applicant s case that by intimating and pursuing claims in circumstances where the Firm knew, or ought to have known, that the purported client(s) did not wish to pursue a claim(s) the Respondent misled the TPI that the claim was ongoing. 87. In the matters particularised in the first FI Report the Respondent s Firm was notified by Speed Medical agency that the purported clients had cancelled their appointments and were not pursuing claims. However, following receipt of that notification information was forwarded by the firm to relevant TPIs intimating a claim. An example of such a letter is in the matter of Mr GR. By letter dated 23 August 2013 Mr Davis wrote to the TPI and said We anticipate receiving details of our client s medical appointment within the next few weeks. Before we proceed with this, please confirm if you wish to put forward any pre-medical offers on this occasion. From our

19 19 initial instructions we are advised our client sustained a whiplash type injury to the neck and shoulders lasting approximately 4 or 6 months. 88. The Applicant s case was that the letter was inaccurate and misleading because Mr Davis of the Firm knew as early as 5 or 6 August 2013 that the client did not wish to pursue a claim. 89. On 30 September 2014 the Respondent indicated he did not know why such letters would be sent to the TPI. In relation specifically to the matter of Mr GR the Respondent indicated during interview on 23 June 2014 that, It shouldn t go out should it. that s an exception to the rule isn t it. 90. In addition, the matters of Mr P and Mr A were relied upon on by the Applicant, as set out in the first FI Report see paragraph 59 above. 91. The Respondent said, It would appear on some of these matters the letters should not have gone out. 92. The CNF forms completed by the Firm included the following statements: Section L Funding The claimant has entered into a conditional fee agreement in relation to this claim, which provides for a success fee... Section N Statement of Truth I am the claimant s solicitor The claimant believes that the facts stated in this claim form are true. I am duly authorised by the claimant to sign this statement. 93. In 22 of the matters reviewed the FI Officer noted that clients had not returned any signed documentation, to include CFAs or retainers confirming instructions to act. Consequently, the Applicant s case was that representations made by the Respondent/his Firm and/or Mr Davis that the claimant had entered into a CFA, and that they were authorised by the claimant to sign the statement, were inaccurate and misleading. 94. Further, no copy of the CNF was included in the initial documentation sent to the purported client(s), with the result that the purported client(s) was/were not provided with an opportunity to review the statement of truth within the CNF. This was discussed between the FI Officer and the Respondent on 30 September 2014; the record of that interview was included in the case papers. 95. The FI Officer raised questions with the Respondent on 8 October 2014 to which the First Respondent replied on 20 October The Applicant submitted that the Respondent failed to deal adequately, or at all, with the questions raised by the FI Officer in relation to the completion of Section L and N on the CNF. Allegation Since 1 April 2013 there has been a prohibition on the payment and receipt of referral fees in PI cases. Prior to the prohibition coming into force on 1 April 2013 the Respondent paid referral fees for the introduction of work. It was the Applicant s

20 20 position that the Respondent continued to pay prohibited referral fees in a manner which contravened Section 56 of LASPO after 1 April The definition of a referral is set out in the Appendix to this Judgment. The Applicant s position was that the communication of an individual s name and contact details to or by a regulated person would amount to a referral, because that information would enable the recipient to make an offer to the individual to provide relevant services. It was the Applicant s case that the procedure implemented by the Firm in obtaining the details of prospective clients from information obtained by and communicated to the Firm by the sole introducer, through its associated companies with the use of the New Claim Forms, as set out below, met the definition of a referral in S56 (5) of LASPO. Consequently, the First Respondent paid prohibited referral fees. 97. The Firm operated with only one introducer, A2J. Save for the narrative contained on the invoices submitted to the firm by A2J and its associated companies, the Respondent was unable to specify the exact services provided to the Firm by A2J. 98. In the period 30 August 2013 to 16 May 2014 the Respondent paid invoices for services provided to and by A2J in the sum of 992, The Respondent conceded that there was no written agreement between his firm and A2J. 99. A marketing agreement was in place between the Firm and M Consultancy. This recorded, amongst other matters: The introducer will introduce clients to the Solicitors in accordance with the provisions of this agreement. The Solicitors will make a contribution to the introducer for marketing, running a call centre, vetting administration and reporting It was the Applicant s position that, notwithstanding the description applied to the purported services offered by M Consultancy, the Respondent was unable to specify exactly what services were provided. The Applicant submitted that the reality of the position was given away by Mr JC, the Respondents father, when he said, The reason we pay it is because we get claims and that s, that s the ultimate. the business won t survive unless we get claims. Clinch Solicitors will not survive you know if we don t get any claims. So what, what the arrangement we have with Access2Justice is that they would send claims to Clinch Solicitors Examples of invoices within the case papers included: one from A2J which referred to Marketing agreement ; one from Land of Claims Ltd dated 16 June 2014 in the sum of 29, with the description marketing services including - advertising, consultancy fees, vetting clients, administration, reporting ; one from DF Consultants Ltd dated 6 June 2014 with the description being Consultancy services in the sum of 100, plus VAT The FI Officer noted from a review of client matter files that the Firm received initial client details from the introducer, contained in a document headed New Claim Form examples of which were within the case papers.

21 During interview on 30 September 2014 the FI Officer discussed the New Claim Forms with the Respondent. He confirmed that the information contained on the New Claim Forms allowed the Firm to contact the prospective client and subsequently to complete the Firm s initial questionnaire. Allegations 1.4, 1.5 and On 8 October 2014 the FI Officer asked the Respondent to provide details of records and management information he retained with respect to his relationship with A2J and the associated companies, to demonstrate that he had not paid prohibited referral fees. The Respondent replied and said Clinch Solicitors confirm they comply with Outcome As at the date of the first FI Report the Respondent had failed to provide the requested records or management information. Further, the Respondent accepted that he failed to ensure that any agreement(s) with an introducer(s) was in writing The FI Officer noted that the Firm did not make any reference to the fact that A2J had any financial or other interest in referring clients to the Firm. In his response dated 20 October 2014 the Respondent said, As advised in the interview it was our understanding that following the ban of referral fees this was no longer a requirement and so our initial letter of instruction was amended at the time of the referral fee ban. Allegation The Applicant submitted that as a consequence of the matters particularised in the first FI Report, the Respondent failed to ensure adequately, or at all, that employees were properly supervised and trained. Weightmans Solicitors were instructed to respond to the allegations on behalf of the Respondent and did so by letter dated 25 June Their letter said, amongst other things: In respect of the conduct of the personal injury claims as set out in the report prepared by Ms Young, our client accepts that he failed to properly supervise fee earners and did not put in place the appropriate policies and procedures, to ensure that matters were conducted in the appropriate manner. Our client admits that he has previously failed to supervise his firm and staff in the appropriate manner. The inadequacies in his supervision of the firm were brought to his attention during the course of Ms Young s investigation. Our client fully accepts that he ought to have taken steps to ensure that the firm was being properly supervised, absent any enquiry from the SRA. However, once these deficiencies were brought to his attention, he did immediately take steps to remedy the situation... Our client does accept that there was a limited failure of governance and risk management in respect of a small number of matters, he does not accept that this was significant enough to constitute a breach of Principle The Respondent was required to ensure that individuals working within his Firm were adequately trained to maintain a level of competence appropriate to their work and level of responsibility. Further, he was required to ensure that he operated a system

22 22 for supervising clients matters, to include the regular checking of the quality of the work by suitably competent and experienced people. It was the Applicant s case that he failed to fulfil that obligation, and failed adequately, or at all, to ensure that employees were properly supervised and trained. Allegation In the matters of Mrs MA and Mr GR the Respondent s Firm received damages cheques payable to those named individuals and which were paid into client bank account in circumstances where Mrs MA and Mr GR were not clients of the Firm and had not provided authorisation to the firm to endorse cheques. It was the Applicant s submission that the cheques received from the TPI were not client monies yet were paid into client bank account in breach of the SAR The SRA s Investigation 110. The Applicant took the following steps to investigate the allegations which it made against the Respondent (and Mr Davis) By letter dated 21 May 2015 the Applicant wrote to the Respondent enclosing a copy of the first FI Report and seeking his explanation By letter dated 25 June 2015 Weightmans Solicitors replied on behalf of the Respondent, with attached statements from the Respondent and Mr JC Weightmans said on behalf of the Respondent, amongst other things, Our client accepts that there were failings in relation to the inception of claims but these failings were as a result of mistakes made by fee earners and our client accepts that he must take responsibility for those mistakes. There was never any intention to mislead... Our client does admit that he has breached Principle 6 of the SRA Code of Conduct He acknowledges that in relation to the 22 matters reported by Ms Young, his actions had fallen short of the required standard of a professional solicitor and to this end he accepts that he has failed to act in a way that maintains the trust the public places in him and the provision of legal services. For the avoidance of doubt, this admission is strictly limited to the period of time during which Mr Clinch failed to ensure that client matter files were properly incepted The Respondent denied that he paid prohibited referral fees. However, it was said on his behalf that, Our client does acknowledge that he failed to record and retain sufficient information in accordance with Indicative Behaviours 9.8 and 9.9 to allow him to readily identify the services for which he made payment. Our client made payments in relation to the running costs of Access2Justice and his view was always that Access2Justice was acting as the marketing arm of Clinch Solicitors Ltd... For this reason, our client took the view that he was paying for marking services... There was never any intention by our client to pay a prohibited referral fee, but he does now accept that he ought to have

23 23 taken further steps at the time of entering into the Agreement with Access2Justice to establish exactly the nature of all payments being made and the services received in respect of those payments. Our client appreciated that he could no longer pay a referral fee, but he still needed to acquire work for his practice. Therefore, our client looked at putting in place an arrangement which would allow him to continue to acquire work for his growing firm. At the time our client was of the view that as he was not making a specific set payment in relation to the introduction of a specific case he did not need to obtain further details in relation to his arrangement with Access2Justice. However, with the benefit of hindsight our client now accepts that he ought to have conducted a greater degree of due diligence and kept more comprehensive records in respect of his arrangement with Access2Justice. Our client admits that he has previously failed to supervise his firm and staff in the appropriate manner. The inadequacies in his supervision of the firm were brought to his attention during the course of Ms Young s investigation. Our client fully accepts that he ought to have taken steps to ensure that the firm was being properly supervised, absent any enquiry from the SRA... Our client does accept that there was a limited failure of governance and risk management in respect of a small number of matters, he does not accept that this was significant enough to constitute a breach of Principle In relation to the payment of the two cheques relating to Mrs MA and Mr GR into client bank account, Weightmans Solicitors said, on behalf of the Respondent: The alleged breach occurred as a result of a failure to obtain appropriate client instructions in respect of the 22 matters detailed in Ms Young s report. It is our view, and that of our client, that these alleged breaches flow directly from the failure to adequately incept the case, and admissions have already been made in respect of those facts. We would therefore invite the SRA to withdraw this allegation on the basis that it would be disproportionate to pursue this allegation when more serious allegations/facts have been admitted in relation to the matters included in this report The letter went on to particularise matters advanced in mitigation and in conclusion stated: He (the Respondent) is very mindful of his past failings in regards to supervision of the practice and a lack of due diligence around the agreement with Access2Justice. He deeply regrets his past failings but is fully committed to ensuring that going forward Clinch Solicitors Ltd remains in compliance. It is for this reason that he has put in place the new procedures detailed above and has instructed Weightmans LLP to advise him in respect of both the acquisition of work and the general compliance relating to the day to day running of his practice The Applicant also wrote to Mr Davis and received a response, in which various allegations were denied. His letter of 20 December 2015 stated, amongst other matters:

24 24 I accept that although it is not a requirement it would have been prudent to wait for a signed Conditional Fee Agreements to be received from clients... Due to the volume of personal injury claims there were oversights and this resulted in the delay in closing down files. I accept that on occasion clients should not have been contacted and files closed sooner in accordance with the client s instructions. These oversights resulted on occasion in further action being taken on files when they should have been closed down. There are various departments at Clinch Solicitors and I am not responsible for closing files Due to the passage of time it is difficult to remember exactly what happened on certain claims. However, I would not knowingly mislead third party insurers or clients. Moreover, although it is accepted that files should have been closed down faster and further action should not have been carried out on files it was done in error and not an attempt to mislead. Furthermore, the errors may have been caused by other fee earners who took the initial instructions from clients or the administrative team who set up the files By letter dated 14 March 2016 the Respondent provided further representations to the Applicant, together with documentation and by letter dated 3 March 2016 Mr Davis provided documentation requested by the Applicant. The facts and matters relied upon in support of the allegations in the Rule 7 Statement. Background 111. The Forensic Investigation Department of the Applicant carried out a further inspection of the books of account and other documents of the Firm, which commenced on 2 August 2016 and culminated in a Forensic Investigation Report dated 25 April 2017 ( the second FI Report ) The Respondent was interviewed by the FI Officer on 7 April The interview was digitally recorded, although due to problems with the digital recorder only part was later transcribed. A copy of the transcript of the recorded interview and the FI Officer s hand-written notes were within the case papers The second FI Report indicated that the Firm failed to act in its clients best interests. In particular, the Firm failed to provide adequate advice on the clients costs liabilities and failed to advise adequately on the risks and benefits of proceeding with a claim(s). It further indicated that the Firm pursued costs in circumstances where clients had been assured that they would not have to pay any costs. It was also reported that the Firm charged success fees that were not permitted by their CFAs. In one particular case, being the matter of Mr DC, the Firm failed to pay an award directed by the Legal Ombudsman ( LeO ) until a Court ordered payment. Summary of Relevant Facts 114. Five client files were reviewed and exemplified within the second FI Report and which were said to show the following characteristics:

25 25 clients were provided with inadequate advice; the Firm claimed success fees from clients in circumstances in which they were not entitled; clients authorities were not sought prior to the issue of proceedings, and the basis for the Firm s claim for costs was unclear All the exemplified matters were relied upon by the Applicant. Full details of the matters set out in the second FI Report, were those of Mr RL, Mr DG, Mr DC, Mrs MW and Mr AB. Allegations 2.1 and The Firm pursued costs in circumstances where clients had been assured that they would not have to pay any costs, and/or the Firm charged success fees that were not permitted pursuant to the CFA One example was the matter of Mr RL. Mr RL was involved in a road traffic accident on 28 March On 6 August 2013 Mr RL signed a CFA with the Respondent s Firm, instructing it to pursue a PI claim on his behalf The CFA indicated that if Mr RL ended the agreement, he would be liable to pay the Firm s basic charges and disbursements, and that in those circumstances, he would not have to pay the Firm s success fee, unless he won his case Mr RL was sent various documents by the Firm, including a letter dated 12 August 2013 which said, amongst other things: You will not have to pay any costs under any circumstances Whilst the Respondent indicated during interview on 7 April 2017 that that letter was not sent to Mr RL, the FI Officer noted that the letter referred to a Demands and Needs statement as being enclosed and asked Mr RL to sign and return it to the Firm. The client file included a Demands and Needs statement, such being signed by Mr RL on 6 August For the reasons noted in the second FI Report, it was not clear what documents were sent to Mr RL either prior to 6 August 2013, (except for those that he returned to the Firm), or on 12 August 2013 (which is when a series of letters on the client file were dated). Whilst the Respondent indicated that Mr RL would not have received the letter enclosing the Demands and Needs statement, it was unclear how Mr RL would have received that statement, as no other letter appeared to represent the covering letter for that document Mr RL provided a witness statement to the FI Officer Furthermore, Mr RL produced a copy of a document that he said he had received at the outset of the claim and which indicated that, Your Claim has excellent Prospects of success and said, amongst other things, FOR THE SAKE OF CLARITY SHOULD YOUR CLAIM NOT BE SUCCESSFUL YOU WILL NOT HAVE TO PAY ANYTHING UNDER ANY CIRCUMSTANCES (capitals as in the original).

26 26 The client matter file did not contain a copy of that document. The Respondent indicated during interview on 7 April 2017 that the document had not been sent by the Firm, and explained that such documents had been provided to the CMC, but that he had decided that they should not be used On 21 November 2013 the fee earner dealing with the matter at the Respondent s Firm, Ms L, contacted Mr RL and sought authority to issue proceedings. A copy of the telephone attendance note said, amongst other things: He stated that he does not wish to issue legal proceedings and if that is the only way forward then he does not wish to proceed with the file, asked if he was sure and confirmed he wished for us to close the file The telephone note did not record whether or not any advice was given to Mr RL regarding the consequences of the Firm closing its file at that point On 17 January 2014 the Firm sent a letter to Mr RL enclosing a cost summary totalling 1, The cost summary included a charge for a letter to the introducer and a success fee of It was unclear as to why the Firm considered it was entitled to a success fee The cost summary referred to 21 letters to Mr RL, for which the Firm raised a charge. However, a review of the client matter file as provided by the Firm to the FI Officer identified only 12 letters had been sent to Mr RL between 12 August 2013 and 17 January During interview on 7 April 2017 the Respondent explained that the cost summary was automatically generated Mr RL responded to the Firm s demand for payment by letter dated 24 January 2014, indicating he had referred the matter to his own insurer By letter dated 31 January 2014 the Firm wrote to Mr RL but made no further reference to the Firm s demand for payment and referred to, amongst other things, In accordance with our Conditional Fee Agreement, we will raise no charges in this case. If any disbursements have been incurred on your behalf, we will also discharge these The Respondent explained that that letter had not been sent, and when asked how he knew that was the case, the Respondent referred to Mr RL s letter of complaint dated 12 February 2016, in which he said he did not receive a letter from the Firm after the letter dated 17 January The file was archived on 4 February However, on 19 January 2016 the file was restored to the Firm s case management system By letter dated 19 January 2016, Mr H of the Firm wrote to Mr RL and said, amongst other things, that Mr RL had breached his CFA and that the bill of costs now stood at 2, It also indicated that unless payment was received within 28 days the Firm would instruct solicitors to commence court proceedings against him.

27 The client matter file showed that all that had happened since the last cost summary had been prepared was that the file had been closed and then reopened. The Respondent was unable to explain why the case was reopened after approximately two years, but agreed that a two-year delay was unacceptable The January 2016 costs summary included additional time for preparation, together with a charge for an ATE premium of which had not been included in the January 2014 bill. On 11 April 2016 Mr H explained that the additional costs were in respect of reviewing the file and updating the cost schedule Mr RL raised a formal complaint with the Firm by dated 1 February He wrote a letter of complaint dated 9 February 2016 in which he referred to the no win no fee guarantee he had received and that he had been cold called and encouraged to make a claim when he had not been injured By letter dated 22 February 2016 Mr H of the Firm wrote to Mr RL and said, amongst other things, We advise that we consider you have only now bought up the cold calling/scam at this stage in an attempt to avoid paying our costs. If you were so concerned, why did you not bring this up earlier. The fact remains that you have breached the CFA And therefore we now intend instructing Solicitors to issue proceedings against you. We confirm that this is our final response to your complaint The Applicant s position was that this letter indicated that Mr H gave no consideration to the fact that the Firm had broken its own guarantee to Mr RL that he would not have to pay, in any circumstances On 24 February 2017 Mr RL sent the Firm a cheque for 2,753.75, explaining he was sending the payment on the advice of the LeO and on the basis that he did not wish to incur further amounts By dated 25 February 2016 Mr H attached a copy of Mr RL s letter to an to the Respondent which read, Hi, some more good news!! In response, Mr JC, the Respondent s father, replied and said Hi [Mr H]. Good result. We have overcharged the client for vat on dibs should be Suggest we repay as he has already complained. There was no comment on the fact that Mr RL had been charged a success fee when the case was not successful, as defined in the Firm s CFA On 12 May 2016 the LeO contacted the Firm and directed a refund of 210 to Mr RL to resolve the complaint, the refund relating to the charge for the success fee. Allegation Mr DC was involved in a car accident on 12 February He provided a letter to the FI Officer dated 6 December 2016 setting out the background. Full information about the Firm s involvement with Mr DC was set out in the second FI Report Mr DC s claim arising from the accident was struck out on 28 February 2014.

28 By letter dated 26 January 2015 Mr H of the Firm wrote to Mr DC, informing him that the defendant s bill of costs was 9, and that the Firm was no longer acting for him By letter dated 3 February 2015 Mr DC wrote to the Firm indicating he had been very worried about the claim for costs, he had not slept or eaten and had been arguing with his wife In due course, the Firm produced a bill in the sum of 5,808.00, which did not make allowance for the fact that they had already received a contribution to their costs for from the TPI Mr DC contacted the Firm indicating he had made complaint to the LeO, to which the Firm replied by letter dated 21 July 2015 indicating they required payment of their bill of costs, notwithstanding the complaint to the LeO Mr DC sent a cheque in the sum of 5, to the Firm on 26 July 2015, with a copy of the cheque being sent to the Respondent by Mr H under cover of an dated 28 July 2015 which said, Hi, I am usually the bearer of bad tidings, BUT client has paid our costs of 5, today :) 149. On 21 April 2016 the LeO issued its decision indicating the Firm had provided poor service to Mr DC and directing the Firm to pay the sum of 8, to him. The Firm was required to comply with the decision by 26 May As at 1 August 2016 the Respondent had not complied with the decision and wrote challenging same by letter dated 1 August On 17 August 2016 the County Court at Manchester ordered that the Firm pay the LeO s award. The Firm paid the amount on 23 August The Respondent conceded that the LeO s award should have been paid by 26 May Further particulars of allegation The second FI Report set out exemplified transactions, in particular the matter of Mr AB, on which the Applicant also relied in relation to allegation Mr AB provided a witness statement setting out his dealing with the Respondent s Firm. Mr AB explained that the accident was a minor shunt and that there were no injuries. The Firm progressed the claim, including arranging a medical examination for Mr AB By letter dated 14 January 2016 the fee earner at the Firm wrote to Mr AB, explaining that if he did not attend the medical examination the Firm would issue a bill for the work done so far on the claim stating that, There is really nothing to lose by continuing your claim and seeing it through to its natural conclusion.

29 In his witness statement, Mr AB indicated that he did not see how the Firm could make any claim for costs because, as far as he was aware, he had not instructed the Firm to do any work on his behalf By letter dated 2 February 2016 the Firm wrote to Mr AB, intimating a claim for costs in the sum of which included a success fee of plus VAT HJ on behalf of Mr AB, wrote to the firm explaining that Mr AB had not instructed the Firm and, therefore, did not owe the Firm any money Mr AB subsequently instructed M Solicitors, who wrote to the Respondent by letter dated 2 March 2016, indicating that Mr AB had not signed any documents with the Respondent s Firm and invited the Firm to withdraw its demand for payment In due course, Mr AB paid the Firm s bill, as he had been advised it would cost more in legal fees to defend the claim. Mr AB complained to the Applicant regarding the Respondent s Firm. In his witness statement Mr AB said, amongst other things: I feel very strongly that I was duped. I have lost sleep over this issue. Clinch appear to want to pursue you to the ends of the earth for money. They use you as a pawn to make money illegitimately from insurance companies. It seems corrupt The FI Officer noted that Mr AB paid the sum of for a claim in which he said, he did not instruct the Firm, and which followed an accident in which he said he was not injured. Further particulars of allegation In relation to allegation 1.7, that is to say, that the Respondent failed to ensure adequately, or at all, that employees were properly supervised and trained, reliance was placed by the Applicant on matters exemplified matters within the second FI Report as well as those matters in the first FI Report. Witnesses 163. No witnesses were heard, and the case proceeded on the papers and on the Respondent s admissions to all of the allegations. Findings of Fact and Law 164. The Applicant was required to prove the allegations beyond reasonable doubt. The Tribunal had due regard to the Respondent s rights to a fair trial and to respect for his private and family life under Articles 6 and 8 of the European Convention for the Protection of Human Rights and Fundamental Freedoms.

30 Allegation He facilitated, permitted or acquiesced in personal injury claims being intimated and pursued in circumstances where the purported client(s): a) had not returned signed client retainers, signed conditional fee agreements ( CFA s ), or any other written confirmation of instructions stating they wished the firm to act on their behalf; and/or b) had notified the firm they did not wish to pursue a personal injury claim, and in so doing he breached Principles 2 and/or 6 of the SRA Principles 2011 ( the Principles ); Allegation He made representations, in the alternative permitted, facilitated or acquiesced in representations being made, to Third Party Insurers ( TPI ) which were inaccurate and misleading, and in so doing he breached Principles 2 and/or 6 of the Principles The factual background to these allegations, which the Respondent admitted, is set out at paragraphs 80 to 95 and 153 to 161 above The Applicant submitted that by intimating and pursuing PI claim(s) in circumstances where the purported client(s) had not returned relevant documentation confirming they wished the firm to act on their behalf, and/or, having been notified that the purported client(s) did not wish to pursue a claim, the Respondent failed to act with integrity in breach of Principle 2 and failed to behave in a way that maintains the trust the public places in them and in the provision of legal services in breach of Principle 6 of the Principles The Tribunal noted that the first FI Report had exemplified and referred to six different client matters, within the period 2013 to 2014, with a further matter, that of Mr AB set out in the second FI Report. That matter had extended into 2016 and involved a matter where, according to Mr AB, he had not actually been injured and yet the Firm had started to progress a claim in his name. The Tribunal noted that Mr GR, and others, had expressed serious concerns about the Firm s conduct. The reputation of the Firm and the profession had clearly been damaged in the eyes of the individuals mentioned These were very serious matters, which the Tribunal accepted would undermine the faith the public would place in the provision of legal services. Persuading someone to initiate a claim for injury in full knowledge that the person had not actually been injured, and purporting to bring such a claim to the notice of the TPIs clearly lacked integrity. The public would be very concerned about this behaviour, which would serve to reinforce the unfortunate impression of the profession which had arisen from reports about ambulance chasers and the compensation culture. Whilst there was no evidence that the Respondent was personally involved in any of the exemplified matters, he had to be responsible for what happened in his Firm. It was particularly concerning that this misconduct had continued after the Firm had received complaints from clients (in 2013 and 2014). Even after the first inspection the Respondent had failed to ensure that there would be no further misconduct with regard to taking instructions and pursuing claims.

31 The Tribunal was satisfied to the required standard that these allegations had been proved Allegation He paid prohibited referral fees in a manner which contravened Section 56 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 ( LASPO ), and in so doing he breached Principles 2 and/or 6 of the Principles and failed to achieve Outcome 9.8 of the SRA Code of Conduct 2011 ( the Code ) The factual background to this allegation, which was admitted by the Respondent, is set out at paragraphs 96 to 103 above The Tribunal noted that the Respondent had paid very large sums to A2J and its associated companies without, apparently, having any explanation about the services which those businesses were supposedly providing. It was clear that in practice A2J and others were providing referrals, whatever was said about marketing services. The changes to the referral fee regime had been brought into force at least in part to protect the public from practices such as cold calling about potential claims The Tribunal noted that whilst the Respondent admitted the allegation he submitted that he had made a genuine, honest mistake after taking legal advice on compliance with the new regime. He had realised that the arrangement was not compliant when discussed with the FI Officer during the first investigation Notwithstanding that submission, the Tribunal noted that the Firm was paying a very substantial part of its turnover to the marketing companies. To do so without any grasp of what was really happening showed a very significant failure by the Respondent to take his professional responsibilities seriously. It should have been clear on any enquiry that rather than marketing services, A2J and its associated companies were directly contacting people who had had road traffic accidents and then directing them to the Firm and being paid for passing on that information The Tribunal was satisfied that this conduct showed a lack of integrity and would clearly damage rather than maintain the trust the public would place in the Respondent and in the provision of legal services and the allegation was therefore proved to the required standard Allegation He failed to produce to the SRA upon request, records and management information to demonstrate that payments made to an introducer(s) were not prohibited referral fees and in so doing breached Principles 6 and/or 7 of the Principles; Allegation He failed to ensure that agreements with introducers were in writing, and in so doing, breached Principle 6 of the Principles and failed to achieve Outcome 9.7 of the Code; Allegation He failed to inform clients of any financial or other interest which an introducer(s) had in referring them to his firm and in so doing, breached any, or all, of Principles 2, 3, 4 and 6 of the Principles and failed to achieve Outcome 9.4 of the Code.

32 The factual background to these allegations, which were admitted by the Respondent, is set out at paragraphs 104 to 106 above The Tribunal reviewed the evidence, noting in particular that the Respondent had not produced information which had been requested since there were, in fact, no records to show that the dealings with A2J and others did not involve paying prohibited referral fees. All of these allegations involved sins of omission rather than commission, but were very serious as the requirements referred to in the Outcomes and under LASPO were intended to protect the public and ensure that solicitors were transparent about how their work was generated. The Tribunal was satisfied to the required standard that these allegations, including all of the alleged breaches of Principles, had been proved Allegation He failed to ensure adequately, or at all, that employees were properly supervised and trained and in so doing, he breached Principles 5 and/or 8 of the Principles and failed to achieve Outcomes 7.6 and/or 7.8 of the Code The factual background to this allegation, which was admitted by the Respondent, is set out at paragraphs 107 and 108 above It was clear from all that had happened within the Firm that there had been a clear failure to supervise and/or train staff properly. As the sole principal of the Firm, it was the Respondent s responsibility to ensure that those who worked for him carried out their duties properly and in accordance with the requirements of the solicitors profession. Mistakes could happen in even the best regulated and managed firms, but the number of recurrent problems in dealing with clients or prospective clients and various TPIs showed that there had been a significant failure to train and supervise staff. The Tribunal noted that the Respondent s then solicitors had written on 25 June 2015 and through that letter the Respondent had accepted that he had not supervised properly and had indicated that, now that the failure had been drawn to his attention, he was taking steps to remedy the problem. The Tribunal accepted the Applicant s submission that the Respondent should have been aware of what was happening in his Firm and it should not have taken an inspection by the Applicant to draw this to his attention The Tribunal was satisfied to the required standard that this failure meant that clients did not receive a proper standard of service and illustrated that the Firm had not been properly managed. This allegation was proved Allegation He paid money into client bank account which was not client money in breach of Rule 14.2 of the SRA Accounts Rules 2011 ( SAR 2011 ) The factual background to this allegation, which was admitted by the Respondent, is set out at paragraph 109 above The Tribunal noted that in the matters of Mrs MA and Mr GR the Firm had paid the damages cheques for these individuals, who were not actually clients of the Firm. This was a clear breach of the relevant Accounts Rules, but was less serious than the other allegations in the Rule 5 Statement as it did not involve the breach of any of the

33 33 Principles. The Tribunal was satisfied to the required standard that this allegation had been proved Allegation He intimated a claim for costs to clients which he knew, or ought to have known, he could not justify, in the alternative he permitted, facilitated or acquiesced in such claims being intimated, and in so doing, breached Principles 2, 4, 5 and/or 6 of the Principles; Allegation He failed adequately, or at all, to ensure that advice to clients was provided as to the risks and benefits involved in pursuing a claim(s) and/or their potential costs liability, and in so doing, breached Principles 2, 4, 5, and/or 6 of the Principles The factual background to these allegations, which were admitted by the Respondent, is set out at paragraphs 116 to 141 above The Tribunal noted the matters of Mr RL and others as set out above. It also noted the other matters set out in the second FI Report, on which submissions were heard in the course of the hearing In the matter of Mr RL, a client had been asked for costs in January 2014, having instructed the Firm which had given a clear guarantee in writing that he would not be liable for costs in any circumstances. This was a matter in which Mr RL had not been injured. It was deeply concerning, therefore, that the Firm had intimated any PI claim to the TPI. When Mr RL s claim was challenged by the TPI, he had decided not to pursue it. Without giving any warning that the Firm would seek its costs from him, the Firm asked Mr RL for costs of just under 1,800. It had then closed its file. Without explanation, some two years later the Firm had sought costs of 2, Not only was there no reason for the amount of costs claimed to have been increased, there was no possible basis for including a success fee in the amount claimed, as the claim had clearly not been successful. Indeed, Mr RL should not have been charged anything at all. Mr RL had complained to the Firm and to the LeO, but had paid the costs sought. This case was very damaging for the reputation of the profession The matter of Mr DG was also concerning. Again, this was a case in which Mr DG had instructed the Firm that he had not been injured in a car accident. The Firm had issued proceedings on behalf of Mr DG without explaining to him the risks of making such a claim. The case had proceeded to a trial, where the claim had to be dropped in the course of the hearing. Mr DG s statement indicated that he had been asked for costs of 7, by the Firm although that claim for costs had been withdrawn after Mr DG had raised the matter with the LeO In common with a number of the other clients, Mr DC referred in his witness statement to being pestered by telephone calls about a road traffic accident in which he had been involved. It appeared from Mr DC s witness statement that proceedings had been issued on his behalf without his authority to do so and that the Firm did not advise him about an offer made by the TPI and the consequences of rejecting it. The Firm had not advised Mr DC about the directions timetable; as a result of not filing his witness statement in the proceedings in time, the claim was struck out. The Firm had then sought its own costs of 5,808; Mr DC was liable in addition for the costs of

34 34 the defendant in the court proceedings, put at almost 10,000. There was no evidence that any proper advice had been given to Mr DC about the risks of taking court proceedings. As noted below, Mr DC had made a complaint to LeO, which resulted in an award to him of 8, which was due to be paid by 26 May The Tribunal noted the matter of Mrs MW, an elderly lady of limited financial means who was involved in a road traffic accident in June 2012 and was signed up as a client of the Firm in July This was another matter in which court proceedings were issued without the authority of the client and without giving any proper advice about the risks of starting proceedings. There was no evidence to suggest that the Firm had taken instructions on a proposal by the defendant s insurers which, in effect, meant that if the claim were withdrawn at that stage they would not seek costs, but they would seek costs on the indemnity basis if the claim were pursued. In or about June 2014 Mrs MW indicated that she wanted to withdraw the claim, at which point a fee earner at the Firm indicated that in that case Mrs MW would be responsible for the Firm s costs which were stated to be in the (rather wide) range of 6-10,000. It appeared that the claim was struck out in or about August 2014, but Mrs MW was not immediately informed of this. The Firm made an application to reinstate the case, in about November 2014; again, there was no evidence that Mrs MW had been told or asked about this either then or when the application was resubmitted in January The claim was discontinued in May The defendant did not pursue a claim for costs against Mrs MW. The file was archived on the Firm s systems on 26 October 2015, but no closing letter was sent to Mrs MW by the Firm. For reasons which were not explained, the file was restored on the system on 12 January 2016 and about a week later Mr H of the Firm wrote to Mrs MW asking for costs of 9, and warning that if Mrs MW did not pay the bill within 28 days, court proceedings would be taken against her. Mrs MW wrote a letter of complaint on 21 January 2016 in which she mentioned that she had received unsolicited telephone calls after her accident and setting out various matters about her ill health, as well as that the Firm had not explained to her that she would be liable for the Firm s costs if the claim was discontinued. Mr H had persisted in pursuing the costs, and had rejected Mrs MW s complaint, in circumstances where the Firm had failed to take instructions before proceedings were issued or before the application to reinstate the claim had been taken. Mr H had rejected Mrs MW s offer to pay the bill by instalments of 25 per month, where this lady was reliant on a pension and state benefits. Mrs MW subsequently complained to the LeO which resulted in a direction that the Firm should waive its fees and pay her 200 in compensation. The second FI Report indicated that Mrs MW had been too nervous and upset about the matter to provide a witness statement to the Applicant. It was clear from the evidence which was presented that Mrs MW s faith in solicitors had been damaged by these events Mr AB was involved in a road traffic accident in January 2015 i.e. after the first of the Applicant s investigations into the Firm. Mr AB had not been injured and his witness statement indicated that he had never instructed the Firm to act for him in making a claim for PI compensation and he did not attend any medical examination. On 2 February 2016 the Firm had sent Mr AB a bill for , including a success fee of 40 plus VAT. Mr AB had paid that bill as he was advised that it would cost more to defend any court proceedings. The Tribunal noted that in his witness statement provided to the Applicant Mr AB had stated, I feel very strongly that I was duped. I have lost sleep over this issue. [The Firm] appears to want to pursue you to

35 35 the ends of the earth for money. They use you as a pawn to make money illegitimately from insurance companies. It seems corrupt From all of the above examples, the Tribunal was satisfied that these allegations had been proved. The Firm s conduct was clearly not in the best interests of clients, amounted to a failure to provide a proper standard of service and had actually damaged the reputation of the legal profession, as was clearly set out in the information and evidence provided by the particular clients whose matters are noted above. In allowing his Firm to operate in such a damaging way, particularly after the first investigation by the Applicant, the Respondent had acted without integrity Allegation He failed and/or delayed in complying with a decision of the Legal Ombudsman dated 21 April 2016 that the firm should pay to a client of the firm, Mr DC, the sum of 8,202.70, and in so doing breached Principle 2, 4, 5, 6 and/or 7 of the Principles The factual background to this allegation, which the Respondent admitted, was set out at paragraphs 142 to 152 above The LeO had directed the Firm to pay Mr DC 8, by 26 May It was clear that the Respondent did not make the payment by that date and, indeed, the relevant sum was not paid until the Court had made an Order on 17 August The Tribunal was satisfied that failing to comply with the LeO s direction, for no good reason, had amounted in the circumstances of this matter to showing a lack of integrity, a failure to act in the best interests of the client, a failure to provide a proper standard of service, would tend to diminish rather than maintain the reputation of the profession and breached the Respondent s regulatory obligations. The public would expect a solicitor to comply with directions of the LeO, which directions were given as part of the regime for resolving client complaints and concerns about the profession. The Tribunal was satisfied that this allegation had been proved to the required standard. General 172. The Respondent admitted all of the allegations and the underlying facts, as set out above. The Tribunal noted that in his Answer of 26 October 2016 the Respondent had made substantial admissions to the allegations in the Rule 5 Statement, but had denied in particular that he had lacked integrity and had denied various other allegations in whole or in part. In an to the Applicant, copied to the Tribunal, dated 4 October 2017 the Respondent stated that he admitted the allegations in both the Rule 5 and Rule 7 Statements. The Respondent confirmed that admission in his document dated 22 December 2017 and in his oral submissions to the Tribunal In reaching its conclusions, the Tribunal reviewed the evidence in the case, including the documents provided and the contents of the two FI Reports, and was satisfied that the admissions were properly made. The Tribunal was satisfied to the required standard that all of the allegations were proved.

36 The Tribunal noted that the Respondent had submitted that about 80% of the defaults noted in the first FI Report had related to one fee earner, Mr Davis, and had argued that other individuals had also been investigated. The Tribunal noted that a number of the allegations arose from matters which had been conducted by fee-earners in the Firm, not directly by the Respondent. However, as the sole principal he was responsible for ensuring his staff were properly trained and supervised. He had failed to take any proper part in resolving the complaints made to and about the Firm. Although he had been put on notice from 2014 of serious problems in the way the Firm dealt with clients and prospective clients, it was clear from the allegations which arose from the second FI Report that serious problems had continued. This series of very concerning allegations had all been proved to the required standard on the facts and on the admissions. Previous Disciplinary Matters 175. There were no previous disciplinary matters recorded against the Respondent. Mitigation 176. The Tribunal had regard to the Respondent s mitigation statement dated 25 April 2017, which had been prepared before the Respondent had admitted all of the Rule 5 allegations and before the Rule 7 Statement had been prepared, together with the matters in the Respondent s document of 22 December 2017 and his oral submissions The Respondent referred to the statement of Mrs S, which was within the hearing bundle, and told the Tribunal that the Andrew to whom Mrs S referred in that statement was not him. Other than that, the Respondent did not have any submissions about the accuracy of the evidence in the case The Respondent told the Tribunal that, having heard the way the case was put by Mr Goodwin, he accepted that the allegations were very serious. He wanted to apologise for his failures and the mistakes he had made, which had caused a lot of distress to clients. The Respondent accepted that claims had been indicated (to insurers) when they should not have been, and that clients had been sent bills when those bills should not have been sent. The Respondent told the Tribunal that he took responsibility for what had happened in the Firm. The Respondent told the Tribunal that he should have supervised the Firm better The Respondent told the Tribunal that he should have taken responsibility for dealing with complaints, but Mr H had dealt with complaints from January 2016 as the Firm had developed and the roles taken by people, including the Respondent, had changed. In response to a question from the Tribunal, the Respondent told the Tribunal that Mr H was a senior litigator (but not a solicitor), understood to be in his mid-40s. He had dealt with litigation and then moved on to dealing with complaints and reviewing procedures. The Respondent told the Tribunal that Mr H had been part of the Firm s management team, along with the Respondent, another solicitor, and the Respondent s father, Mr JC.

37 The Respondent told the Tribunal that he had qualified as a solicitor at about the age of 26 and became a sole practitioner at the age of 29. The Respondent referred to the very upsetting, personal matters set out in his mitigation statement which had occurred in October 2012 and continued to have a significant impact on his personal and family life. (Details are not set out here to avoid unnecessary distress and to protect the privacy of the Respondent s family) The Respondent told the Tribunal that he had not worked since his Firm was intervened, which was in May 2017; he had been suspended at that point. The Respondent told the Tribunal that he had not worked as a solicitor since then, but in relation to his means told the Tribunal that he was working in construction, undertaking manual work. He was being supported by his partner The Respondent told the Tribunal that he had co-operated with the Applicant s investigation. The Respondent had provided the FI Officer in the first investigation with the Firm s complaint list, and all of the files examined had been from that list. The Respondent told the Tribunal that he had given straightforward answers to the FI Officers The Respondent told the Tribunal that when LASPO came into effect, with the ban on payment of referral fees, he had changed the Firm s business model and had stopped dealing with CMCs in order to comply with the new rules. The Respondent told the Tribunal that he had made an honest mistake. He had paid for legal advice on this, and other matters, and had thought he had implemented the advice he had received on compliance properly. Having taken advice from a barrister in preparation for the hearing in May 2017 he had accepted that he should admit the allegations about payment of referral fees The Respondent told the Tribunal that after the matters raised in this case had come to light, he had taken remedial action such as not taking any action until a signed retainer had been received. This step had resolved the source of most complaints. The Respondent told the Tribunal that the number of files handled by the Firm had reduced from about 3,500 to about 1,200 and he had recruited better staff. The Firm had stopped taking on claims in April 2017 and the Respondent had started to wind down the Firm The Respondent told the Tribunal that although the first investigation had taken place in 2014, no restrictions had been placed on his Practising Certificate until May 2017, on the intervention. The Respondent told the Tribunal that he would like the current suspension to be lifted as soon as possible The Tribunal asked the Respondent about his insight into his misconduct, given that all agreed the misconduct was serious. The Respondent told the Tribunal that when he set up the Firm, at the age of 29, he had supervised it properly, in line with the size of the Firm at that time. The Respondent told the Tribunal that he was good at the legal work he had done but his management of the Firm was not as good as it should have been.

38 The Tribunal asked the Respondent how he would ensure that no similar conduct would happen again. The Respondent submitted that he would work under the supervision of a partner and would work in a different area of law, such as civil litigation. The Respondent accepted that the problems in the Firm had occurred on his watch. If he just had his own caseload to work on there would be no similar problems in the future In response to a question from the Tribunal about his professional history, the Respondent told the Tribunal that he now had 11 years post-qualification experiences. He had worked for a personal injury firm in St Helens (Merseyside) for about three years after qualification and then set up his own Firm, which was then a high street firm, in Ashton-under-Lyne (Greater Manchester). The Firm then did walk in work with local clients, who were happy with the service provided. The Respondent told the Tribunal that the problems in the business began when he started to deal with CMCs. The Respondent told the Tribunal that growing the business, through dealing with CMCs, had been a natural progression. In dealing with claims brought in through CMCs the Firm had become busier and he had recruited more staff. The work on vetting claims had been done by the fee-earners. After the Firm had been running for about 3 to 4 years, it had about 8 staff, including 6 fee-earners. At its height, the Firm had 15 fee-earners, 3 support staff and about 3,500 cases. The Firm did not need many support staff as fee-earners did their own typing. The Respondent told the Tribunal that as a maximum the Firm had had a turnover of about 2.5 million per annum In response to a question from the Tribunal about whether the misconduct had arisen because the Respondent had taken his eye off the ball, or because there were endemic problems in the Firm, the Respondent told the Tribunal that about 80% of the files referred to in the first FI Report had been handled by Mr Davis. The problems had been restricted to a particular period and after the Respondent took remedial action, they did not recur. Sanction 190. The Tribunal had regard to its Guidance Note on Sanction (December 2016), to all of the facts of the case and the submissions of the parties The Tribunal assessed the seriousness of the misconduct by considering the Respondent s culpability, the harm caused and any aggravating or mitigating factors which were present The Respondent had been the sole principal of the Firm and was therefore responsible for how his Firm operated. He was in direct control over the circumstances in which the misconduct had occurred. The Tribunal did not find that the Respondent had deliberately committed acts of misconduct, but they had occurred when he was developing the business with a view to making money. There was nothing wrong in wanting to run a profitable business, but solicitors had to ensure that their businesses were properly run and managed in compliance with the expected professional standards. The Respondent had grown the Firm rapidly. The Tribunal noted that the Respondent may well have lacked the management skills to run the Firm appropriately, which meant that he had failed adequately to supervise his staff. The

39 39 Respondent had now accepted that he lacked the experience necessary to manage a firm of this kind properly. The Respondent had failed to put in place proper systems. Whilst the Respondent s failures were not deliberate, neither were they spontaneous as the misconduct occurred over a prolonged period (in particular through 2013 and 2014 and in relation to numerous clients in relation to the Rule 5 allegations and in 2016 in relation to the Rule 7 allegations). The Respondent, through his Firm, had been in a position of trust with regard to the Firm s clients and, indeed, potential clients who would not have expected that the Firm would take any steps on their behalf when they had not given instructions. The Respondent s culpability was at a very high level The Tribunal found that the harm caused by the misconduct was significant. His actions would reinforce a view held by some members of the public that members of the profession were prepared to pursue claims for their own benefit rather than for the benefit of clients. Whilst most solicitors acted thoroughly professionally and in adherence to proper standards, the Respondent s conduct was such as would damage the reputation of the profession. The Tribunal noted as a particular example, the conduct with regard to Mrs MW, an elderly lady, who had been pursued by the Firm for costs of 9,331.30, to which the Firm had not been properly entitled. Mrs MW had had limited means, being reliant on state benefits and a pension. Her offer to pay the Firm at 25 per month had been rejected. In circumstances where Mrs MW should not have been asked for payment in the first place, and had resurrected the file a long time after it had been closed, the Firm s correspondence with her demanding payment was objectionable and inexcusable. That, along with the other serious misconduct considered in this case, was very damaging for the reputation of the profession. Not only had the Respondent been responsible for his Firm s misconduct on the 22 files referred to in the Rule 5 allegations but when problems had been brought to the attention of the Firm, as set out in the Rule 7 Statement, the harm was compounded by the way Mr H had handled complaints. The decision to let Mr H deal with complaints was taken by the Respondent; he should have ensured that Mr H was dealing with complaints properly The Tribunal noted that dishonesty had not been alleged. The misconduct was in the nature of sins of omission rather than commission, but the misconduct was repeated. After the first investigation, in 2014, the Respondent should have taken proper steps to ensure that there would be no further misconduct. The Respondent, through his Firm, had allowed misconduct to take place over a long period and had taken advantage of vulnerable clients and members of the public. The Respondent knew or should have known that his failure to act properly was in serious breach of his obligations, including his obligation to ensure that the reputation of the profession was maintained The Tribunal noted that the Respondent had no previous disciplinary record. He had not been deceived by any third party. Rather than putting matters right when clients complained, the Respondent s response had been disappointing and, indeed, had aggravated the harm caused. The misconduct was repeated and had taken several forms including the payment of banned referral fees. The Respondent had made admissions to some allegations reasonably promptly, but had not made full admissions until October His response to some questions during the investigation, as noted at paragraphs 47 to 50 above, had not been full and frank. The

40 40 Tribunal noted that in relation to the payment of referral fees, the Respondent had obtained advice from solicitors about compliance and that he had believed he was acting properly. However, where such a large part of the Firm s turnover was being paid to third parties, it was incumbent on the Respondent to ensure that both he and those third parties were acting professionally and in accordance with all of the relevant rules. (The Tribunal noted, for example, that in the period October 2013 to June 2014 the Respondent s Firm paid three entities 1,154, from the office bank account and also paid invoices totalling over 85,000 in the same period to two other entities when, the Tribunal was told, the Firm s turnover was, at its height, about 2.5 million) The Tribunal had given the Respondent an opportunity to demonstrate, during his oral submissions, that he had insight into his misconduct. His response to that invitation had been disappointing. The Respondent had apologised to the Tribunal and had acknowledged that he had made mistakes. However, the Respondent had not properly demonstrated that he understood the gravity of his misconduct. As a result, the Tribunal could not be satisfied that he had really learned from his mistakes, and that there could be no repetition. The Respondent had not shown any real understanding of how a solicitor should behave towards clients (or members of the public). The overall impression given of his conduct was that he and his Firm had little regard for the interests of clients e.g. in issuing Court proceedings without proper instructions and without warning clients of the risks of doing so. The misconduct indicated that the Respondent had lost his ethical compass, and the Tribunal was not satisfied that his mitigation indicated that he had found it again The Tribunal accepted that the events of 2012 were very distressing and would have had an adverse impact on the Respondent for a considerable time. However, as the sole principal of the Firm he had to take responsibility for the Firm s many failures, over a significant period. His personal mitigation did not detract from the seriousness of the misconduct. The Tribunal noted carefully what the Respondent stated about the efforts he had made to improve the Firm. Sadly for the Respondent, that had not been sufficient to prevent the Applicant reaching the conclusion that his Firm should be intervened in May Whilst the Respondent s misconduct was not alleged to be dishonest, the Respondent had fallen well below the standards of integrity, probity and trustworthiness the public was entitled to expect from a solicitor. The Respondent s misconduct was shocking and outrageous and had a significant adverse impact on the reputation of the profession Given the very serious misconduct in this case, the sanction imposed on the Respondent had to be above the level of no order, a reprimand or a fine. The harm caused to clients/members of the public and to the reputation of the profession was such that nothing less than a period of suspension would be sufficient to reflect the Respondent s misconduct. However, the Tribunal did not find it was necessary to strike the Respondent off the Roll in order to protect the public and the reputation of the profession. Whilst the Tribunal did not impose sanctions primarily to punish errant solicitors, it could and did take into account the need to deter other solicitors from similar dereliction of their duties to clients and compliance with professional obligations.

41 The Tribunal determined that the appropriate period of suspension in this case was three years. It was intended that this would be sufficient for the Respondent to gain proper insight into the effect his behaviour had had as well as to protect the public and make clear to other professionals that such poor treatment of clients and others would not be tolerated and that those running a solicitors firm must do so properly However, the Tribunal noted that the Respondent had, in effect, been suspended since May 2017 as a result of the intervention into the Firm. To avoid being unduly punitive, the Tribunal decided, therefore, to reduce the period of suspension it would otherwise have imposed to two and a half years from the date of the hearing The Tribunal further determined that at the end of the period of suspension the Respondent should be subject to conditions, for an indefinite period, such that he could not run a regulated law firm and any employment in the profession should be subject to approval by the Applicant. This would ensure that any possible risks would be mitigated as the Applicant would no doubt only give permission if it was satisfied that the Respondent would be appropriately supervised and managed. It would, of course, be undesirable for the Respondent to be the COLP or COFA of any firm. The Tribunal decided that the conditions set out in its Order (noted below) were reasonable and proportionate to protect the public and the reputation of the profession. Costs 203. On behalf of the Applicant, Mr Goodwin made an application for the Respondent to pay the Applicant s costs of these proceedings. Mr Goodwin referred to the schedule of costs prepared for this hearing, which totalled 81,330.58, including forensic investigation costs of 28, (being 19, for the first investigation and 8, for the second investigation). Mr Goodwin accepted that Mr Davis had been ordered to pay costs of 2,000 in relation to this case at the hearing in May 2017 and so that amount should be deducted from the claim for costs Mr Goodwin submitted that the costs claimed were reasonable and proportionate, given the nature of the case and the volume of documents (which comprised three lever arch files of papers, mostly arising from the forensic investigations) Mr Goodwin referred to the written submissions on costs made by the Respondent in his document of 22 December The Respondent had submitted that he should not be responsible for the Applicant s costs of the adjournment in May 2017, and that the Applicant should pay his costs in connection with that hearing. Mr Goodwin told the Tribunal that the case had been listed for hearing with a time estimate of three days. On 5 May 2017 the Applicant had applied to adjourn the hearing, on the basis that it was considering further allegations against the Respondent in the light of the second FI Report. That application had been refused on 10 May At the hearing on 16 May 2017 the application had been renewed, as was recorded in the Memorandum of the hearing. The Applicant s counsel had submitted that it would be appropriate for all of the allegations to be dealt with in one set of proceedings. The Applicant s investigation officer, Ms Horton, had prepared a witness statement dated 12 May 2017 which outlined the steps taken in the second forensic investigation, which had led to the second FI Report dated 25 April Mr Goodwin submitted that until that Report had been concluded, the Applicant had not been in a position to

42 42 decide if further allegations would be made against the Respondent or not. In particular, it had not been in that position at the time of a CMH in this case on 10 January Mr Goodwin submitted that the Respondent s counsel at the hearing in May had supported the application to adjourn, accepting that any and all allegations against the Respondent should be dealt with together. The Tribunal had accepted that the hearing against the Respondent should be adjourned. Mr Goodwin submitted that there had been no fault on the part of the Applicant. It had been necessary to make the application to adjourn, and that application had been supported by the Respondent Mr Goodwin noted that in the written submissions the Respondent had referred to a possible allegation of dishonesty being made, and the intervention being on the grounds that dishonesty was suspected. Mr Goodwin submitted that after careful consideration it had been decided that no allegation of dishonesty would be made in these proceedings. The suspicion of dishonesty, being the basis of the intervention, and being able to prove dishonesty to the criminal standard in the Tribunal were very different matters. The Respondent could have appealed against the intervention decision, but had not done so With regard to the Respondent s claim for the costs of the adjourned hearing, which were put at 8,549 in a schedule dated 22 December 2017, Mr Goodwin submitted that the relevant authority to be considered was Baxendale-Walker v The Law Society [2007] EWCA Civ 233 which set out the approach which should be taken i.e. that ordinarily, unless the prosecution had been improperly brought, or was a shambles from start to finish, the Applicant should not be ordered to pay a Respondent s costs With regard to the Respondent s submissions about the amount of costs claimed, Mr Goodwin noted that the Respondent had indicated that certain tasks should have taken only, say, a day whereas they had in fact taken longer. Mr Goodwin submitted that it was unrealistic to say that the work which had actually been done could have been completed in the very limited time suggested by the Respondent The Respondent submitted that it had been correct to make the application to adjourn the hearing in May However, he had had to prepare for a three-day hearing and had incurred the legal costs of doing so, including the costs of instructing counsel. The Respondent submitted that he should not be responsible for all of the costs of a three-day hearing. If the application to adjourn had been made earlier, the costs of preparation for the hearing would have been lower and the case against the Respondent and Mr Davis could have been severed. The Respondent told the Tribunal that the second investigation started in August 2016, before the Rule 5 Statement had been made. The Applicant had been aware of two investigations by the time the proceedings were issued The Respondent told the Tribunal that the first investigation began in April There had been a total of four visits to the Firm. The first FI Report, dated 27 November 2014, had been served on the Respondent in May Thereafter, there was no action until the proceedings began in September The Respondent submitted that if the matter had been dealt with more promptly there would have been no need for a late application to adjourn.

43 With regard to the costs of the investigations, the Respondent submitted that he had been transparent and co-operative. He had made admissions, including in the course of interviews with the investigating officers. The Respondent submitted that this would have reduced the time the FI Officers needed to spend on the case. The Respondent submitted that the first investigation had been limited to the files noted on the Firm s complaint list i.e. was based on information provided at the start by the Respondent. There had been 36 matters on that list and the problems on 22 had been reported in the first FI Report. The Respondent submitted that the investigation had related to fast-track PI claims, on many of which only initial instructions had been given. The Respondent submitted that this meant there were limited documents on each file The Respondent submitted that six individuals at the Firm had been investigated by the Applicant. Proceedings had been brought against Mr Davis, who had disputed the allegations but failed to attend the hearing. The Respondent submitted that this would have increased the overall costs of the proceedings. The Respondent accepted that he was the owner of the Firm and so he should be responsible for a significant proportion of the costs, but not all of them. The Tribunal was referred to the Respondent s document of 22 December 2017 in which he had named the six individuals (including the Respondent, his father and Mr Davis) and submitted that just 25% of the costs should be apportioned to him. The Respondent also referred to his submissions about what should have been the reasonable time various tasks should have taken and told the Tribunal that this was based in his experience of trial preparation It was noted that the Respondent had not submitted any statement of means, as had been directed earlier in the proceedings. However, the Tribunal agreed to hear the Respondent s submissions about this. Full details are not recorded to protect the privacy of the Respondent and his family The Respondent told the Tribunal that since he was suspended he had been able to do some casual work as a labourer for a friend who had a construction business, for which he earned around 350 per week gross. The Respondent told the Tribunal that his partner works part-time, earning around 700 per month net. They paid rent of 695 per month and overall the costs of running the household and supporting the children were around 1,000 per month. The Respondent told the Tribunal that he had inherited a share of a property, from which a rental income of about 1,000 per quarter was received but the net equity in the property was nil The Respondent told the Tribunal that after the intervention the Firm s files had been transferred to another firm. The Respondent told the Tribunal that he had paid the intervention costs to date and it was hoped that the balance would be paid from the work in progress on the files. He had had no earnings from the Firm since May In response to the Respondent s submissions, Mr Goodwin submitted that it was reasonable for the parties to prepare for the three-day hearing in May 2017, in case the application to adjourn had been refused. Although the Respondent had submitted that he had co-operated, he had not fully admitted the allegations until the later stages of the case. Although six individuals had been investigated, the costs had only been claimed against the Respondent and Mr Davis, as these proceedings had been brought against them. It was submitted that all of the costs of the investigation should fall at

44 44 the Respondent s door as he was the principal of the Firm. Mr Goodwin accepted that the Tribunal could take into account the Respondent s submissions about his means. The Tribunal s Decision 217. The Tribunal considered carefully the schedule of costs and the submissions of the parties with regard to both where the liability for costs should lie and the quantum of costs. The Tribunal was satisfied that the Respondent should pay the Applicant s reasonable costs of the proceedings; the case had been properly brought, and all the allegations had been proved The Tribunal then carried out a summary assessment of costs to determine the overall reasonable and proportionate costs of the claim The Tribunal determined that the costs of the two forensic investigations had been reasonable. Despite what was said by the Respondent about the limited documentation on the files which had been considered, the Tribunal had in evidence the statement of one of the investigating officers, Ms Horton. From that it was clear that because of the way documents had been stored (both electronically and in hard copy) there had been a lot of documents to review. Ms Horton had explained that the files contained many copies of the same documents. For example, on one client matter (Mr DC) there were seven separate electronic folders of PDF documents, each of which contained 3 PDF documents (save for the final folder which contained 2). Each document was made up of between 99 and 150 pages, so this file alone had contained over 2,000 separate pages. The Tribunal noted that at least some of the allegations referred to the absence of documentation. In such circumstances, it was very important that a thorough search was conducted. The Tribunal also noted that on a number of occasions the Respondent had maintained that documents which appeared on the electronic files had not actually been sent to clients; this would no doubt have added to the difficulty in working out what had or had not been seen by clients. The work done by the investigation officers had been necessary in order properly to prepare and present the case The Tribunal determined that as a substantial amount of proper work had been done in preparing the FI Reports and supporting documents, the time spent in drafting the Rule 5 and Rule 7 Statements had been too high, as was the time noted as being spent in perusal and preparation. Whilst the work had no doubt actually been done, the Tribunal had to assess how much of that time should properly be put at the door of the Respondent. The Tribunal determined that the reasonable legal costs in this matter were 30,000 plus VAT, which together with the investigation costs of 28,000 gave a total of 64,000. From this the Tribunal deducted the sum of 2,000 which Mr Davis had been ordered to pay at the hearing in May Therefore, the total reasonable costs of the proceedings for which the Respondent could be liable were 62, The Tribunal considered whether the costs should be notionally apportioned to others who had also been investigated. The Tribunal was not persuaded that there was any good reason to do so. The Respondent had been the principal of the Firm and it was the Firm which had been investigated.

45 The Tribunal considered whether the costs of the adjourned hearing in May 2017 should be deducted and/or whether the Applicant should be ordered to pay the Respondent s costs in connection with that hearing. The Tribunal could see no good reason to order the Applicant to pay the Respondent s costs of that hearing. It was unfortunate that the adjournment had had to be sought at a comparatively late stage, but it was reasonable to make that application and, as was explained in the statement of Ms Horton, there had been reasons that the second investigation had not been concluded until April The Respondent should be liable for the Applicant s costs in connection with the adjournment. There was no fault on the part of the Applicant for which it should be penalised. In any event, as the Tribunal noted, there was no good reason for the profession as a whole to have to bear those costs which had, ultimately, been incurred because of the Respondent s defaults. This was particularly so when the Respondent had been running a Firm with a turnover of up to 2.5 million per annum whilst being in breach of a number of its key duties to the public and the profession The Tribunal then considered whether the costs of 62,000 should be reduced in the light of the Respondent s means and/or whether it should defer payment of the costs order until further order of the Tribunal. The Tribunal rejected the latter option as, whilst the Respondent was of limited means at the moment, there was no particular foreseeable event which would significantly improve his financial position. He should have a long working life ahead of him, whether in the law or some other occupation, and there was no reason to suppose he would be totally unable to pay a reasonable contribution towards the costs over time. The Tribunal was conscious that it had not read or heard evidence of means, only submissions, but was content to accept what the Respondent had said. The Tribunal decided that the appropriate sum to be paid by the Respondent was 50,000 as this was a realistic and reasonable amount and should be manageable over the coming years. The Applicant would be expected to proceed reasonably in seeking to recover the costs, but should not be prevented in any way from doing so Statement of Full Order 1. The Tribunal Ordered that the Respondent, ANDREW PAUL CLINCH, solicitor, be SUSPENDED from practice as a solicitor for the period of 30 months, to commence on the 4 th January 2018, and it further Ordered that he do pay the costs of and incidental to this application and enquiry fixed in the sum of 50, Upon the expiry of the fixed term of suspension referred to above, the Respondent shall be subject to conditions imposed by the Tribunal as follows: 2.1 The Respondent may not: Practise as a sole practitioner or sole manager or sole owner of an authorised or recognised body; Be a partner or member of a Limited Liability Partnership (LLP), Legal Disciplinary Practice (LDP) or Alternative Business Structure (ABS) or other authorised or recognised body;

46