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Law Society, Scottish Legal Complaints Commission criticised by judge over failures, delays investigating solicitor’s £232K client fund deficit case

05 Apr

SLCC Law SocietyLaw Society & SLCC criticised by judge amid concerns over dodgy complaints procedures. SENIOR Judge Lord Carloway of Scotland’s Court of Session has criticised the Law Society of Scotland’s “inadequate system” of dealing with complaints against solicitors after failures & delays were revealed in a Law Society investigation of Greenock solicitor William Murnin, who has been suspended from practising as a lawyer since 22 July 2010 after a Law Society audit discovered a “potential” £232,000 deficit in the solicitor’s firm’s client account.

It took the Law Society of Scotland over a year from May 2010, when they began their investigation, until June 14 2011 to submit the complaint to the Scottish Legal Complaints Commission (SLCC), which in turn led to the accused solicitor launching an appeal against the SLCC’s consideration of the complaint, on the grounds it was referred to the SLCC outwith its one year rule.

Reflected in the court’s opinion on the case, issued earlier this week, solicitor William Murmin had been accused of overcharging clients and was the subject of a lengthy investigation. The Law Society of Scotland’s Guarantee Fund Committee eventually met in January 2011, nearly a year on from the Society’s investigation into the solicitor and decided to make a complaint to the SLCC. The complaint, which was not submitted to the SLCC until June 14, some six months on from the Guarantee Fund Committee’s meeting, said Murmin “may be guilty of professional misconduct or unsatisfactory conduct regarding alleged breaches of the Solicitors (Scotland) Accounts Rules 2001 through overcharging of fees to various client ledgers so creating a deficit on the firm client account”.

The Court’s opinion reports that An allegation of misconduct was made against the appellant in relation to events occurring before 18 May 2010, when a financial compliance inspection of the appellant’s firm by the second respondents revealed a potential deficit on the firm’s client account of about £232,000. The second respondent’s Guarantee Fund Committee met on 13 January 2011 and determined to make a complaint. The appellant was advised of this on 10 March, but the complaint was not submitted to the first respondents until 14 June 2011.

The complaint form, which was intimated to the appellant, read simply that the appellant: “may be guilty of professional misconduct or unsatisfactory conduct regarding alleged breaches of Rules 4 and 6 of the Solicitors (Scotland) Accounts etc Rules 2001 through overcharging of fees to various client ledgers so creating a deficit on the firm client account”.

However, it was accompanied by a letter which stipulated the amount involved and that the sum was made up of overcharging on thirteen different client files. It also gave some information on the background, including the date of the inspection, the invitation to the partners of the firm, including the appellant, and then to the appellant alone, to attend the Committee interviews on 1 and 22 July 2010. The appellant had not attended these interviews and, on the latter date, his practising certificate was suspended under section 40 of the Solicitors (Scotland) Act 1980. Further details of the Committee meetings in September, October, November 2010 and January 2011 were given; it being said that it was at the final meeting that a decision was made to make the complaint. The accompanying letter was not copied to the appellant but it is not disputed that he was aware of the nature and extent of the allegations summarised in the complaint form.

By letter dated 24 June 2011, the first respondents intimated to the second respondents their intention: “to make a decision not to accept the complaint for investigation on the grounds that it has been made outside the time limits”.

They invited a response on this and, in particular, whether: “There are exceptional circumstances that prevented you from submitting your complaint earlier…”.

A similar, but not identical letter, was sent to the appellant intimating the first respondents’ intention and requesting any comments before any decision was made. It stated that the second respondents had been asked to outline: “any exceptional circumstances which prevented them from submitting the complaint at an earlier stage”.

The appellant made no comment. By letter dated 28 June 2011, which was not copied to the appellant, the second respondents submitted that “the subject matter to which the complaints pertain is of such a serious quality” that the first respondents ought to exercise their discretion to allow the complaint to be considered given the “overwhelming public interest in investigating these matters”. There was no explanation proffered for the lateness of the complaint.

On 21 July 2011 the first respondents intimated that they were accepting the complaint and, in accordance with the statutory scheme, remitted it to the second respondents to investigate. The letter narrated that, “on the face of it, the complaint appears to be time barred”. It was recognised that the second respondents could have complained timeously but had failed to do so. The letter continued:

“However, the [first respondents are] mindful of the severity of the allegations and the need to protect the public should the petitioner’s practising certificate be reinstated. In the circumstances, the [first respondents recommend] that the need to establish the specifics of the complaint and the gravity of the allegations should be considered to be an exceptional reason for accepting the complaint even though it has not been made within [the first respondents’] time limits”.

The solicitor, William Murmin, formerly of Murmin McCluskey in Greenock, then lodged an appeal on the grounds the Scottish Legal Complaints Commission had erred in law in holding that, on a proper construction of Rule 4(6), a bare and unsupported assertion by the second respondents, that the misconduct complained of was grave, was sufficient to amount to exceptional circumstances, thus allowing the SLCC to investigate the case outwith its one year rule. The appeal, heard earlier this week by Lord Carloway, Lord Hardie & Lord Wheatley was refused, with the issue of expenses expressly reserved.

Lord Carloway, stating in his opinion what many clients, campaigners & observers to the decades old appalling system of self regulation of Scotland’s legal profession have known for years, said delays at the Law Society in taking action on cases “will risk the real possibility that serious complaints against solicitors will not be processed by the first respondents [Scottish Legal Complaints Commission] and the public will be denied the protection to which they are entitled.”

The judge also criticised the Scottish Legal Complaints Commission for its role in the case, after it was revealed the SLCC had initially refused to accept the complaint against the solicitor, on the grounds it had been made outwith the time limit and had then changed its mind and would investigate, after the Law Society said the complaint was of “such a serious quality”. Lord Carloway’s opinion stated “the court is concerned by the first respondents’ (SLCC) exercise of their discretion to entertain the complaint outwith the time limit.”

The full opinion of Lord Carloway can be read here : OPINION OF THE COURT delivered by LORD CARLOWAY in the appeal by WILLIAM MURNIN Appellant; against (First) THE SCOTTISH LEGAL COMPLAINTS COMMISSION; and (Second) THE LAW SOCIETY OF SCOTLAND Respondents:

While Lord Carloway recorded in his opinion that no explanation for the delays was offered to the court, legal insiders have told Diary of Injustice this morning of allegations “there were negotiations going on between the Law Society & ‘representatives’ of Mr Murnin between January & June of 2011”, a pattern reminiscent of previous cases where solicitors have asked their colleagues, and solicitors working for the Legal Defence Union to intervene in complaints investigations and secretly bargain away any disciplinary action or overt publicity which may impact on their professional livelihoods. The allegations, put to one Law Society insider, have not been refuted.

No statement has been issued on the Law Society of Scotland’s website at time of publication.

However, the Scottish Legal Complaints Commission late today issued the following statement, praising the court for its decision yet ignoring Lord Carloway’s ‘concerns’ the SLCC exercised its “discretion to entertain the complaint outwith the time limit”. The SLCC also claimed it had acted in the public interest in the Murnin case, although as previous coverage in the media seems to indicate the SLCC has refrained from acting in the public interest 99% of the time with regard to complaints made by clients about their solicitors to the hapless law quango.

jiSLCC Chair Jane Irvine, pictured finger-pointing on the SLCC’s multi million pound stairwell at its plush location in the Stamp Office, Edinburgh. Speaking after the ruling was issued, Jane Irvine the Chair of the SLCC stated “This is an important decision for the SLCC.  Not only does it recognise that we are making sound decisions in the public interest, it also recognises the vital role the SLCC has in the monitoring and regulation of the Scottish legal profession.”

The SLCC statement went onto say : “The SLCC is pleased with the Court’s ruling to refuse an appeal made by Mr W Murnin against the SLCC’s decision to accept for investigation a complaint made about his conduct by the Law Society of Scotland. The SLCC accepted the complaint for investigation, even though it had been made outside the one-year time limit because the exceptional circumstances of the complaint led us to the view it was in the public interest to do so. The SLCC is very satisfied to note that the ruling acknowledged we applied our powers and discretion properly, in line with legislation and our own rules, and that we reached a well reasoned decision.”

The SLCC statement pointedly failed to give any further information on why the complaint took over a year to send to the SLCC, information, which Commission insiders allege “is well known to some senior staff and members of the SLCC’s board”.

Clearly however, this case demonstrates yet again there is NO SAFETY in clients allowing their solicitors to hold funds in client accounts. Clients are, and have been previously advised to withdraw any funds being held by or administered by Scottish solicitors, on the grounds the Guarantee Fund and the Law Society’s arrangements for detecting fraud & compensating clients for financial losses as a result of their solicitors actions, are wholly inadequate.

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