"And she's scored! But that's got to hurt..."
The Solicitors Disciplinary Tribunal has decided that a sports lawyer who was prosecuted for mismanaging client funds while at Mishcon de Reya must pay her own costs of over £500,000, despite being cleared.
Liz Ellen was accused by the Solicitors Regulation Authority of paying third parties out of Mishcon's client account "in circumstances amounting to the provision of a banking facility" while she was a junior lawyer at the firm. The payments are understood to have comprised part of a £1.9m fee paid by Newcastle United to a football agent.
Mishcon was fined £25,000 for failing to prevent the payments being made, and was ordered to pay £32,500 towards the SRA's costs.
Ellen, who trained at Mishcon and became head of its sports group before leaving in 2020 to set up her own consultancy, racked up costs estimated to be in excess fo £500,000, and after she was exonerated applied for a costs order against the SRA.
She said the case against her was "legally and factually flawed", while her barrister said she had been "singled out" by the regulator even though she was a "relatively junior solicitor" at the time. He pointed out that no action had been taken against the matter partner, or the 11 partners who authorised the various transfers*.
However, the SDT agreed with the SRA that the decision to prosecute was "plainly a reasonable one and the fact it has failed does not make it unreasonable", and that deviating from the default position of not awarding costs could "be used to infect the proper conduct of regulatory proceedings".
Ellen has 21 working days to appeal. Her solicitors declined to comment, which should save a few bob.
*although prosecuting the 11 partners would also have been harsh given it’s accepted practice for partners to sign whatever CHAPs form an associate puts in front of them, on the understanding that colleagues can be trusted not to send dollops of cash to, for example, geezers who have part-ownership of Craig Bellamy.
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Comments
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Relations between client and representation turning from jubilant to frosty in 3,2,1…
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Appalling. So now she needs to turn to Mishcons to pay as had they properly supervised her, done what they should etc or even helped her with her case she might not be £500k down.
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May be she can claim under Mishcon's insurance policy as it relates to her time there, as some kind of interested party, if not against Mishcons itself?
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'the default position of not awarding costs could "be used to infect the proper conduct of regulatory proceedings"'. - or translated as :"open the freaking flood-gates"
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Probably covered under the firm's D&O policy and insurers want their money back.
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How on earth did costs come to £500k?
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"The payments are understood to have comprised part of a £1.9 fee paid by Newcastle United to a football agent." The matter sounds pretty de minimis, although a good illustration of northern tight-fistedness.
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It's not exactly access to justice when the SRA can pursue meritless cases and charge insane fees without ever having the repercussion of adverse costs. And our own dear Law Society allowed PI policies to remove cover for exactly these sorts of cases. No wonder SRA hunt the junior solicitors, they can't possibly lose!
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Mischon should clearly pick up the tab, if not otherwise covered by insurance. Do the right thing .
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She was covered by insurance.
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Absolutely disgraceful that £500k of costs was racked up on nonsense like this.
Why on Earth does it matter that this payment was made through Mishcons, rather than directly? There was zero prejudice to the client. Indeed it sounds like she was acting on client instructions.
Mind you, prosecuting junior solicitors for minor irrelevant hiccups while letting sex offenders off the hook seems to be the SRA's style at the moment.
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@Buzzkill - what sex offenders did the SRA let off the hook?