Baden-Daintree, John Christopher - 143753

REGULATORY SETTLEMENT AGREEMENT

• 1.Andrew Putin, Martin John Ryan, John Christopher Baden-Daintree, and John Hugh Charles Balchin being full equity partners in the firm of Burroughs Day (The Partners) agree to the following outcome of the investigation into their professional conduct under reference REG/38978-2008/IR1. References in this agreement to the Firm are references to Burroughs Day.

Background

• 2.On 26 February 2008 the Solicitors Regulation Authority (SRA) commenced an inspection of the Firm. A report dated 29 September 2008 stated, amongst other things, that:
• 2.1.The Firm conducted claims on behalf of miners or their relations under the Claims Handling Agreements set up by the Department of Trade and Industry (DTI) under the supervision of the High Court;
• 2.2 .The Firm opened a total of 191 files under the Claims Handling Agreements. Most of these matters had been introduced to the Firm by two related companies, Union and General Services Ltd (UGS) and A J Revill Associates Limited (AJR);
• 2.3.A total of 185 claims had been concluded;
• 2.4.A review of 10 UGS referral matters revealed that clients had signed a pre-retainer agreement with UGS, which, amongst other things, provided for a fee payable to UGS for assisting the claimant of up to a maximum of 25 % including VAT from the clients’ compensation. UGS provided the firm with “Forms of Authority” signed by claimants which authorised the Firm to forward the claimant’s compensation to UGS. Clients’ cheques did not pass through the firm’s bank account.
• 3.The Partners have confirmed in correspondence with the SRA that :
• 3.1. Of the 191 miners’ compensation claims 114 resulted in a successful outcome, and damages were awarded to the client;
• 3.2. Damages were sent to the client via UGS in 34 of the 114 successful claims;
• 3.3. The total monies forwarded by the Firm to UGS on these 34 claims was £276,241.25 from which UGS was contractually entitled to deduct fees of up to 25%;
• 3.4. On the retirement of Robin Davey in April 2003, Mr Balchin took over responsibility for Employers’ Liability Work although he did not personally have conduct of any of the Claims Handling Agreement cases;
• 3.5. The Partners did not deduct monies from clients’ damages in relation to their own fees.

Undertaking

• 4. On 12 October 2009 the Partners gave an undertaking to the Legal Complaints Service to deal with complaints by former mineworker clients and/or their personal representatives and to use reasonable endeavours to contact all such clients in respect of whose claim(s) a deduction from damages had been made (See Annex A). Between 13 October and 15 January 2010 the Firm sent 34 letters to their former clients in the form of the letter attached at Annex B. The Partners undertake with the SRA to deal with any responses received from former clients to these letters in accordance with the undertaking provided to the Legal Complaints Service, including the making of appropriate repayments.

Submissions to findings

• 5. The Partners agree to submit to the following findings being made by the SRA that they :
• 5.1. having overall responsibilities for the Firm’s Employers’ Liability Department failed to comply with Rule 1 of the Solicitors’ Practice Rules 1990 (SPR) in that they acted in a manner which was likely to impair their independence and was not in the best interests of their clients in that they failed adequately and expeditiously to consider the impact of the Claims Handling Agreements on the terms of the UGS agreements.
• 5.2. acted in breach of Rule 9 SPR in that they entered into an arrangement with UGS, a claims assessor part of whose business was to make, support or prosecute personal injury claims and who solicited or received contingency fees in respect of that business.

Mitigation

• 6. The Partners believed that the UGS agreement was of benefit to the client and provided clients with support going beyond the traditional solicitor/client service. They believed that before entering into an agreement with UGS the client was fully advised by UGS of the service that they would be providing.
• 7. The Partners considered the additional charge rendered by UGS of up to 25% of compensation including VAT was a reasonable charge for the level of service provided. The client’s cheque was forwarded to UGS in accordance with the specific instructions of the client given in their signed authority.
• 8. The Partners believed that the client had entered into a binding agreement with UGS prior to instructing the Firm. They saw no need to encourage satisfied UGS clients to incur additional legal costs by asking them to forward the UGS agreement to their Litigation Department for review and to potentially expose themselves to a risk of a claim against them for breach of their contract with UGS.
• 9. The Partners accept that with hindsight the wording of their initial advice letter to the client would have been better if it had included the advice that it was not obligatory to use the services of UGS to pursue a claim.
• 10. The Firm asked their own in house lawyers to review the UGS agreement. The lawyers considered there was no reason to question the suitability of the agreement or how it was entered into. The Partners accept that their in house lawyers had not seen the precise terms of the UGS agreement.
• 11. At their own expense, the Partners took Counsel’s advice about how to best protect their clients once they became aware that UGS was suffering from some financial difficulties prior to going into liquidation. They also sought advice from the Law Society’s guidance section on this issue.
• 12. The Partners have agreed to comply with the LCS refund scheme and will compensate those former clients who wish to avail themselves of the scheme.
• 13. If there were breaches of any of the Rules of professional conduct, they were errors of omission rather than a deliberate attempt to flout the Solicitors Practice Rules.
• 14. The Partners accept that, whilst they were not personally involved in the conduct of the miners’ compensation claims, they are collectively responsible for any breaches of the Rules of Professional conduct.
• 15. The alleged breaches occurred between 2000 and the end of 2003/early 2004.
• 16. They have identified only 34 cases where monies were taken by UGS.

Conclusions

• 17. The SRA considers that the overall circumstances of the Firm’s dealings with miners’ compensation cases would justify a referral to the Solicitors Disciplinary Tribunal but, whilst it would be a matter entirely for the Tribunal, it is unlikely that the Tribunal would restrict the Partners’ ability to practice on a full consideration of all the facts. Since the Partners have disputed that they acted improperly and could continue that dispute before the Tribunal, an outcome that involves restitution to clients under the guidance and with the approval of the LCS and/or SRA and a consequential financial payment by the Firm, and the findings as set out in paragraphs 5 above, is proportionate to the circumstances.
• 18. Andrew Putin, Martin John Ryan, John Christopher Baden-Daintree, and John Hugh Charles Balchin are therefore reprimanded for the breaches identified in paragraph 5.
• 19. The Partners agree that this outcome may be published by the Solicitors Regulation Authority and that it may also be disclosed to any person upon request or otherwise.
• 20. The Partners agree that they will not act in any way that is inconsistent with this Agreement such as, for example, by denying the misconduct found in paragraph 5. This restriction will not however prevent the Firm contesting on its merits any individual complaint to the Legal Complaints Service which might be made.
• 21. If the undertaking referred to in paragraph 4 above is not complied with, or if the Firm acts in any way inconsistently with this Agreement, the issues arising from the Forensic Investigation Report dated 29 September 2008 may be re-considered by the SRA. Mr Putin, Mr Ryan, Mr Baden-Daintree and Mr Balchin agree that it is not open to them to challenge the validity of such reconsideration on any basis connected with this Agreement.
• 22. The Partners agree to pay the costs of the investigation of the SRA, these being £2,632.50.

The date of this Agreement is 6 April 2010.

Signed by
Andrew Putin
Martin John Ryan
John Hugh Charles Balchin
John Christopher Baden-Daintree


David J Middleton
Legal Director
For the Solicitors Regulation Authority