SRA recovers £1.3m. for Compensation Fund
7 August 2007
The Solicitors Regulation Authority's Compensation Fund has been paid £1.3 million following High Court proceedings arising from thefts in a Midlands law firm.
The Compensation Fund protects clients against losses caused by solicitors. Most of its funding comes from contributions by solicitors. This recovery will reduce future contributions to the fund by solicitors.
An investigation into Payne & Co in Knowle in the West Midlands in 1995 uncovered a massive shortfall in their client account. The firm was closed down. Mr Payne was struck off and later sentenced to five years in prison. Payne & Co's accountants, Sephton & Co, had failed to qualify their reports on the firm's client account, preventing prompt regulatory action. Sephton & Co's insurers fought the negligence case on technical grounds and finally lost in the House of Lords. Subsequent negotiations led to the settlement at £1.3 million, which includes the Solicitors Regulation Authority (SRA)'s costs.
SRA Chief Executive Antony Townsend said: "This is an excellent settlement. The money will now be available to protect the public in other cases. We are determined, on behalf of the public and all the honest solicitors who contribute to the fund, to recover losses."
The SRA was represented by Timothy Dutton, QC, and Rosalind Phelps, both from Fountain Court Chambers, and by Iain Miller of Bevan Brittan.