Decision - Agreement
Outcome: Regulatory settlement agreement
Outcome date: 12 June 2019
Published date: 26 June 2019
Firm or organisation at time of matters giving rise to outcome
Name: Schillings International LLP
Address(es): 41 Bedford Square, London, WC1B 3HX
Firm ID: 621152
This outcome was reached by SRA decision.
Disqualification under section 99 Legal Services Act (not a section 43 order)
Regulatory Settlement Agreement
1. Agreed outcome
1.1 Martin Flowers, a former employee of Schillings International LLP (the Firm), agrees to the following outcome to the investigation of his conduct by the Solicitors Regulation Authority (SRA):
- that, from the date of this agreement, he is disqualified from:
- acting as Head of Legal Practice of any licensed body
- acting as Head of Finance and Administration of any licensed body
- being a manager of any licensed body, or
- being employed by any licensed body
- he is rebuked
- he is fined £13,547
- to the publication of this agreement
- he will pay the costs of the investigation of £600.
1.2 In this agreement the term "licensed body" means a body which holds a licence in force under Part 5 of the Legal Services Act 2007 (as amended).
2. Summary of Facts
2.1 Mr Flowers was an employee and Head of Operations at the Firm until his resignation on 18 September 2018. As part of his role Mr Flowers could authorise expenditure on equipment for the Firm.
2.2 Between approximately 2013 and 2018, Mr Flowers took 95 mobile phone handsets which belonged to the Firm. He sold these to a phone recycler. Mr Flowers received a total of £13,547 for the handsets. He kept the money.
2.3 In July 2018, the Firm was alerted by Vodafone after it had identified unusual activity on the account.
2.4 After the Firm were notified of this, they conducted an investigation and identified Mr Flowers’ misconduct.
2.5 On 18 September 2018 Mr Flowers was interviewed by his line manager and the Head of Human Resources and admitted to the events set out in the Vodafone report. Later that day he resigned and the Firm accepted his resignation.
3.1 Mr Flowers admits, and the SRA accepts, that he breached Principles 2 and 6 of the SRA Principles 2011 by taking mobile phones belonging to the Firm and selling them for personal profit.
3.2 Mr Flowers accepts that his conduct as set out above was dishonest.
4. Why the agreed outcome is appropriate
Section 99 disqualification
4.1 Mr Flowers and the SRA agree that a disqualification is appropriate because:
- the Firm is a licensed body
- Mr Flowers has breached rules as described in paragraph 3 above which, by virtue of section 176 Legal Services Act 2007 (LSA), applied to him
- the conditions in rule 3.3 of the SRA Disciplinary Rules 2011 (DPR) are met, in that:
- it is undesirable for Mr Flowers to engage in the activities listed in paragraph 1.1(a) of this agreement, and
- disqualification is a proportionate outcome in the public interest because it will prevent Mr Flowers from undertaking a similar role at another firm and helps maintain trust in the profession as a whole.
4.2 It is undesirable for Mr Flowers to engage in the activities listed in paragraph 1.1(a) of this agreement because he abused his position of trust at the Firm for personal gain which resulted in a loss to the business.
4.3 In deciding that disqualification is proportionate, the SRA has taken into account the disqualification criteria in Appendix 3 of the DPR and the following mitigation which Mr Flowers has put forward:
- that he co-operated with both the Firm and the SRA investigations.
- he apologised and offered to pay back the money to the Firm by way of instalments. The Firm declined this offer of repayment.
- that during the relevant time, he was experiencing financial difficulties.
Rebuke and Fine
4.4 The SRA considers that a rebuke and a fine is appropriate because the conditions in rule 3.1 of the DPR are met, in that:
- the conduct was deliberate and caused loss to the Firm;
- a rebuke and fine is a proportionate outcome in the public interest because it signifies the seriousness with which the SRA treats the abuse of a position of trust. The fine also takes away the financial benefit of the misconduct.
- that the conduct was neither trivial nor justifiably inadvertent because it was deliberate, continued over an extended period of time and caused a financial loss to the Firm.
4.5 The amount of the fine takes into account all relevant circumstances and is calculated in line with the SRA’s published Guidance on approach to financial penalties dated 13 August 2013.
4.6 In deciding that a rebuke and fine is proportionate, the SRA has taken into account the admissions made by Mr Flowers and the mitigation he put forward, as set out in paragraph 4.3 above.
4.7 The SRA considers it appropriate that this agreement is published in the interests of transparency in the regulatory and disciplinary process.
5. Acting in a way which is inconsistent with this Agreement
Mr Flowers agrees that he will not act in any way which is inconsistent with this agreement such as, for example, by denying responsibility for the conduct referred to above.
Mr Flowers agrees to pay the costs of the SRA's investigation in the sum of £600. Such costs are due within 28 days of a statement of costs due being issued by the SRA.