Fined £14k
A partner in DWF‘s London office has been fined over £14,000 after he wrongly approved payments amounting to £2.2 million to a property developer client.
Mark Andrew Shepherd was working in the firm’s real estate team in 2019 when it was instructed on the construction and sale of a number new-build residential properties.
Shepherd, based in London, was the client partner on the matter, while a senior paralegal in the firm’s Manchester-based plot sales team had day-to-day conduct of the sales.
Solicitors for the buyers of these properties paid deposits and instalments towards the purchase prices to DWF. The firm were responsible for holding these funds until deposit warranty insurance was in place and supervisors certificates had been issued to confirm that construction of the properties was progressing.
According to the Solicitors Disciplinary Tribunal (SDT) judgement, DWF “erroneously” released €2,645,713.56 (£2.2 million) to their client — the seller — even though these provisions had not been met. In fact, by the end of 2020, “little or no work had been carried out” and the development site was “still bare land”.
When DWF attempted to recover these sums from their client, asking for repayment by issuing a letter of claim, they discovered that the client had gone into administration. However, the firm was able to “make good” the payments to would-be buyers, claiming a portion of the amount on its professional indemnity insurance.
The judgment’s statement of agreed facts reports that the unnamed senior paralegal in charge of the plot sales “requested the incorrect payments of the buyer’s deposit and instalment monies held under the contract”. Shepherd then authorised these payments, failing to personally check whether the terms of the contracts had been met and whether the payments were properly due to the client.
In non-agreed mitigation, Shepherd told the SDT that he was “not aware” that the paralegal did not hold any legal qualifications and that he “mistakenly assumed recruitment to and employment within the Plot Sales Team of an international law firm would include appropriate verification of qualification and experience”. He maintains that he “acted, at all times, in good faith”.
A DWF internal investigation found that Shepherd, who was not associated with plot sale work, should “not have accepted the work from the client without an appropriate allocated supervisory structure in place”. The judgment reports that “the firm appears to have accepted the matter should have been handled by Manchester-based partners who could have directly supervised [the paralegal]’s work”. DWF no longer conducts work in plot sales.
The SDT found that, “as a partner of the firm the respondent had ultimate responsibility for final sign off on the payment authorisations and given the very large sums of money involved the respondent should have exercised greater care and scrutiny before authorising their release. However, it was to his credit that he had self-reported the matter and made appropriate admissions.”
Shepherd was ordered to pay a £14,168 fine and £19,000 costs.
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