Issues:

David Johnson was a solicitor and sole director of Bolton firm Johnson Law Limited.  Over a period of 7 years, Johnson Law Limited had received payments of disbursements intended for third parties including ATE insurers, medical records agencies and counsel.  Mr Johnson had failed to pass such payments on. 

Held:

In an agreed outcome with the SRA, Johnson admitted failing to pay disbursements and failing to repay a loan following an undertaking.  He also admitted that his conduct had been dishonest and lacked integrity.  The tribunal said money intended for third parties was used to support the cash flow of the business, adding that Johnson “knew that failure to pay creditors and the use of money allocated to those creditors to otherwise support the running of the firm was dishonest”. He was struck off and ordered to pay £7,500 costs.

Comment:

This is a valuable reminder that any money received by a solicitor for a third party must paid to the third party promptly and must not be used by the solicitor for any other purpose.  As perAccounts Rule 14.3: “Client money must be returned to the client (or other person on whose behalf the money is held) promptly, as soon as there is no longer any proper reason to retain those funds. Payments received after you have already accounted to the client, for example by way of a refund, must be paid to the client promptly.”

The full decision and statement of agreed facts can be read here:

 https://solicitorstribunal.org.uk/sites/default/files-sdt/12266.2021.Johnson%20%281%29.pdf

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