SOLICITORS DISCIPLINARY TRIBUNAL IN THE MATTER OF THE SOLICITORS ACT 1974 Case No. 10940-2012 BETWEEN: SOLICITORS REGULATION AUTHORITY Applicant and JASON ARTHUR FENNEY Respondent Before: Miss N. Lucking (in the chair) Mr S. Tinkler Mrs V. Murray-Chandra Date of Hearing: 31st July 2012 Appearances Jonathan Goodwin, solicitor advocate of 17E Telford Court, Dunkirk Lea, Chester Gates, Chester CH1 6LT for the Applicant. Mr Grant Armstrong, counsel instructed by Mr Benjamin Posner, FPG Solicitors, Devonshire House, 582 Honeypot Lane, Stanmore, Middlesex HA7 1JS for the Respondent. JUDGMENT
Allegations 1. The allegations against the Respondent were that: 1.1 contrary to Rule 6 of the Solicitors Accounts Rules 1998 ( SAR 1998 ) he failed to ensure compliance with the Rules; 1.2 contrary to Rule 7 of the SAR 1998 he failed to rectify breaches promptly upon discovery; 1.3 contrary to Rule 19(1)(a)(ii) of the SAR 1998 he failed to place unpaid professional disbursements in a client account; 1.4 contrary to Rule 22 of the SAR 1998 he made improper withdrawals from client bank account; 1.5 contrary to Rule 32(1) and (2) of the SAR 1998 he failed to keep accounts properly written up as required; 1.6 contrary to Rule 32(7) of the SAR 1998 he failed to carry out the required reconciliations; 1.7 contrary to Rules 1.02, 1.06 and/or 5.01(j) of the Solicitors Code of Conduct 2007 ( SCC ) he failed to exercise adequate control of the firm s financial arrangements to include financial control of budgets, expenditure and cash flow. Documents Dishonesty was alleged against the Respondent in relation to allegations 1.3 and 1.4. The issue of dishonesty was a matter for the Tribunal to determine and it was open to the Tribunal to find the allegations proved, absent a finding of dishonesty. 2. The Tribunal reviewed all of the documents submitted on behalf of the Applicant and the Respondent, which included: Applicant: Respondent: Application dated 24 February 2012 Rule 5 Statement and exhibit bundle JRG1 dated 24 February 2012 Statement dated 15 September 2010 Correspondence various dates Testimonials Statement of Income and Expenditure and Assets and Liabilities
Factual Background 3. The Respondent was admitted as a solicitor on 16 October 1989. His name remained on the Roll of Solicitors. 4. The Respondent was a Director of Injury Specialists Solicitors Limited ( the firm ) which practised from offices at Sheraton House, 2 Rockingham Road, Uxbridge, Middlesex UB8 2UB. The firm went into administration on 25 October 2011. 5. The Forensic Investigation Department of the Applicant carried out an inspection of the Respondent s books of account, commencing 5 August 2010 and which produced a Forensic Investigation Report ( FI Report ) dated 29 June 2011. 6. The books of account were not in compliance with the SAR 1998. The Forensic Investigation Officer ( FIO ) identified a cash shortage in the sum of 120,998.39. The cause of the shortage related solely to the treatment of unpaid professional disbursements in relation to doctors medical fees which had been recovered by the firm during the period June 2008 to August 2010 from third party insurers in respect of clients successful personal injury claims. The professional disbursements were not remitted by the Respondent to the respective doctors but instead the unpaid disbursements which totalled 120,998.39 had been improperly utilised to support the firm s finances. Allegation 1.1 7. The Respondent had failed to ensure compliance with the SAR 1998. Allegation 1.2 8. The Respondent had agreed that a client account shortage in the sum of 120,998.39 existed. On 7 October 2010 the Respondent had conceded that he was not in a position to rectify the shortage. 9. On 11 May 2011 the Respondent had confirmed to the FIO that the cash shortage was still outstanding. The Respondent had failed to rectify and/or had delayed in rectifying the client account cash shortage. Allegations 1.3 and 1.4 (the dishonesty allegations) 10. The FI Report dated 29 June 2011 had identified a client bank account shortage in the sum of 120,998.39. The cause of the shortage related solely to the treatment of unpaid professional disbursements, in relation to doctors fees, which had been recovered by the firm during the period June 2008 to August 2010 from third party insurers in respect of clients successful personal injury claims. 11. On 13 November 2008 the Respondent had opened a second client bank account referred to as a client suspense account in to which to transfer unpaid medical disbursements. The Respondent had indicated that there was a police investigation into certain of the doctors conduct and upon advice he had been cautioned against settling the invoices and had been advised to transfer the unpaid disbursements to a
separate doctors holding client bank account pending resolution of the police enquiry. 12. The FIO was provided with a schedule which detailed the total amount of recovered medical fees owed by the Respondent s firm to the various doctors and which amounted to 175,753.28. 13. The firm s bank statements had identified that from 13 November 2008 to 28 April 2010 the firm had transferred unpaid medical disbursements totalling 154,716.14 from its office account to the client suspense bank account. 21,037.14 had not been transferred to the client suspense bank account and had been improperly retained in the office bank account. 14. It was also identified that during the period 1 February 2010 to 2 August 2010 the Respondent had improperly transferred funds back from the client suspense account to the office bank account on four separate occasions totalling 101,032.50. 15. As at 15 August 2010 the client suspense account held a balance of 46,254.02 and it was calculated that the total net liabilities owed by the firm to the various doctors amounted to 167,252.41 which created a client bank account shortage in the sum of 120,998.39 which the Respondent had agreed. 16. The Respondent had been made aware on two separate occasions that the funds held in the suspense account were client money: In November 2008 an FIO had pointed out to the Respondent that the name of the then recently opened client suspense account did not contain the word client. The Respondent confirmed that the FIO had explained to him at the time that unpaid professional disbursements were client money; and The Respondent s reporting accountants in the course of auditing the firm s accounts noted that the firm was not compliant with the SAR 1998 and had explained to the Respondent that unpaid professional disbursements were classed as client money. 17. The Respondent had conceded that the firm was in financial difficulties and that had the money not been available in relation to the unpaid professional disbursements, he would have attempted to find alternative funding and if that was not possible, he would have given consideration to putting the company into liquidation or to finding a buyer for the existing case load. Allegations 1.5 and 1.6 18. The client ledgers did not reflect sums held for individual clients in a separate client bank account and the client bank account reconciliations did not include funds held in a separate client bank account.
Allegation 1.7 19. The Respondent had in place a referral arrangement with BCRLA Limited ( BCR ), a provider of after the event ( ATE ) legal expenses insurance policies. The FIO identified that the firm had successfully recovered ATE insurance premiums from third party insurers but in a number of individual client matters, the Respondent had either delayed or failed to account to BCR in respect of the recovered premiums. 20. It was established that as at 12 May 2011 the firm had failed to remit to BCR recovered ATE insurance premiums totalling 14,914. During the course of the investigation, it was established that whilst cheques to BCR had been raised they had not been sent and remained unpresented items on the office bank account. 21. On 17 August 2010 the FIO had been provided with a schedule which detailed that in the period January 2009 to June 2010 the firm s liability in respect of ATE premiums owed to BCR totalled 83,495. The bank statements identified that the firm had paid part of the outstanding liability in four separate tranches by way of cheque payments to BCR between 2 June 2010 and 29 December 2010 totalling 68,581. The firm still owed BCR an outstanding sum of 14,914. 22. The Respondent drew an average standard net monthly salary in the region of 7,000-7,500. The Respondent indicated that in June 2010, he had increased his net salary to 9,500. The salary taken by the Respondent during the period June 2009 to May 2010 totalled 112,100 net. 23. On three separate occasions in the period March to May 2010, the Respondent had drawn advance wages in addition to his standard net salary 7,500. The three occasions were 10 March 2010 in the sum of 3,000, 12 April 2010 in the sum of 5,000 and 6 May 2010 in the sum of 7,000. During the period 1 February 2010 to 2 August 2010 the Respondent indicated that he had utilised the client suspense account monies in order to address the firm s restricted cash flow and to keep the business running. 24. The Respondent indicated that the increase in his drawings had been due to above normal personal expenditure. 25. The FI Report also particularised misappropriation of office monies by a former unadmitted fee earner, Mr S who was the subject of separate proceedings. 26. By letter dated 30 June 2011 the FIO wrote to the Respondent and enclosed a copy of the FI Report seeking his explanation. By letter dated 10 August 2011 the Respondent had provided his response. Witnesses 27. None.
Findings as to Fact and Law 28. Allegation 1.1: contrary to Rule 6 of the Solicitors Accounts Rules 1998 ( SAR 1998 ) he failed to ensure compliance with the Rules; Allegation 1.2: contrary to Rule 7 of the SAR 1998 he failed to rectify breaches promptly upon discovery; Allegation 1.3: contrary to Rule 19(1)(a)(ii) of the SAR 1998 he failed to place unpaid professional disbursements in a client account; Allegation 1.4: contrary to Rule 22 of the SAR 1998 he made improper withdrawals from client bank account; Allegation 1.5: contrary to Rule 32(1) and (2) of the SAR 1998 he failed to keep accounts properly written up as required; Allegation 1.6: contrary to Rule 32(7) of the SAR 1998 he failed to carry out the required reconciliations; Allegation 1.7: contrary to Rules 1.02, 1.06 and/or 5.01(j) of the Solicitors Code of Conduct 2007 ( SCC ) he failed to exercise adequate control of the firm s financial arrangements to include financial control of budgets, expenditure and cash flow. Submissions on behalf of the Applicant 28.1 Mr Goodwin referred the Tribunal to his Rule 5 Statement and exhibit upon which he relied. He informed the Tribunal that to his credit, the Respondent had admitted all of the allegations including the two allegations of dishonesty. Mr Goodwin invited the Tribunal to proceed on the basis of full admissions. 28.2 In relation to allegations 1.3 and 1.4 which were the dishonesty allegations, Mr Goodwin referred the Tribunal to the combined test in Twinsectra v Yardley [2002] UKHL 12. He said that the basis of the dishonesty allegations had been set out in the FI Report and he referred the Tribunal to that. The FI Report stated: 22. The cause of the cash shortage relates solely to the firm s treatment of unpaid professional disbursements; namely doctors medical fees which had been recovered by the firm, during the period June 2008 to August 2012, from third party insurers in respect of clients successful personal injury claims. The professional disbursements were not remitted by the firm to the respective doctors...and a quantum of the unpaid disbursements totalling 120,998.39, was improperly utilised to bolster the firm s finances. 28.3 Mr Goodwin said that the FI Report continued: 26. Mr Fenney explained to the Officers that in November 2008, in light of the police investigation into the doctors conduct, he had sought legal
advice and was cautioned against settling the doctors invoice fees (for which payment had already been recovered by the firm from third party insurers) as it was suggested that this could perpetuate money laundering allegations. Mr Fenney stated that he was advised to transfer the unpaid professional disbursements to a separate doctors holding client bank account pending settlement of the police enquiries.... 29. On 6 August 2010 and at her request, Ms Guile [the FIO] was provided with a schedule compiled by Mr PA detailing that the total gross liabilities (i.e. recovered medical fees) owed by the firm to the various doctors amounted to 175,753.28. 28.4 Mr Goodwin referred the Tribunal to the schedule which had been provided to the FIO. He said that from 13 November 2008 until 28 April 2010 the firm had transferred the sum of 154,716.14 in unpaid medical disbursements from the firm s office account to the client suspense account. A sum of 21,037.14 had been improperly retained in the office bank account. Mr Goodwin said that during interview on 7 October 2010 the Respondent had conceded to the FIO that: there came a time when the transfer was not made due to cash flow difficulties with the company and the money remained in the office account and was used by the company in the general run, the day to day running expenses incurred. 28.5 Mr Goodwin informed the Tribunal that during the period 1 February 2010 to 2 August 2010 the firm had improperly transferred funds back from the client suspense account to the office bank account. It had occurred on four separate occasions and totalled 101,032.50. Mr Goodwin referred the Tribunal to the extracted transcript of the recorded interview when the Respondent had been asked to explain why the withdrawals by way of transfer had been made: CG: Ok. The bank account statements, they also record a number of payments going out which are all transfers from the account to your office bank account. I can show you statements.... JF [the Respondent]:... this firm s cash flow was severely restricted and as a result of that I needed to utilise some of the monies in the doctors account, if I may call it the doctors account, in order to keep the business running pending receipt of costs from third party insurers once the position had been sorted out. The money was also used, well it was used in the overall day to day running of the business, payment of staff salaries, including mine and payment the company s legal fees latterly I would say from the beginning of 2010 in view of the fact that the company had issued proceedings against the previous owner and two former employees and their wives for recovery of monies the company maintains were wrongly obtained from third party insurers in
relation to these ghost policies and also other costs that this company has had to face as a result of their alleged fraud. For example, a massively increased professional indemnity premium for 2009, 2010 in the sum of over 200,000. I took the view, at the time, that I wasn t necessarily doing anything wrong in utilising these monies I wasn t causing any harm or financial loss to individual clients of the firm as they have received in full their compensation and in the large their costs have been paid until such time as third party insurers stop paying this firm s costs. On a big scale I took the view that it would [sic] appropriate to use the monies in this manner. However more recently I have come to realise that I would say a technical breach of the rules and this should perhaps not have been done. I would also add that it was always my intention to repay these monies when sufficient funds came into the office and indeed that did occur for a period upon conclusion of some successful part 8 proceedings against the insurers in the early part of this year in March/April 2010 payments were made, I think. 28.6 Mr Goodwin said that to have described the transfers as a technical breach did not reflect the reality of the Respondent s conduct and the serious nature of the breaches. He said that any intention by the Respondent to repay the monies was irrelevant. Mr Goodwin referred the Tribunal to the case of Bultitude v The Law Society [2004] EWCA and the Judgment of Lord Justice Kennedy, which stated: I accept of course that he is not shown to have intended permanently to deprive his clients of their funds. The proof of dishonesty in this context is not dependent upon proving that intention 28.7 Mr Goodwin submitted that the Respondent had utilised monies to which he knew he was not entitled and that had to be dishonest conduct. 28.8 The client bank account shortage of 120,998.39 had been agreed by the Respondent and Mr Goodwin said that in the course of the recorded interview with the FIO, the Respondent had stated I do when asked if he accepted that he had made improper withdrawals. Mr Goodwin said that the FIO had asked the Respondent whether at the time of making the withdrawals, he had been aware that his conduct was wrong and in breach of the SAR and the Respondent had stated: I don t know whether I would go that far for the reasons that I m trying to explain uh it certainly I would except that, certainly was monies that I shouldn t have used uh because it was, you know money that either belong to the third party insurers all the doctors dependent on the conclusion of the police enquiry that I do except uh at the time until you know relatively recently uh I wouldn t go as far I don t think to you know, I think there s some debate, I m trying to create in my own mind some sort of debate as to whether or not it was strictly clients money and this is the point that I m trying to allude to uh, but for the purposes of this you know I do except that uh you know it was money that the company shouldn t of (sic) used but I would add that I think I have very strong mitigation to do that and as I ve explained it was always my intention and indeed it is still my intention to correct that position.
28.9 Mr Goodwin said that the Applicant s position was that the Respondent had known that he was utilising client monies as he had been made aware of that on two separate occasions, firstly in November 2006 by another FIO and secondly by his reporting accountants. On both occasions he had been advised that unpaid professional disbursements constituted client money. 28.10 The Respondent had conceded that the firm was in financial difficulty and that he had sought to bolster the firm by the use of client money and Mr Goodwin said he had been aware at the material time that it was client money. 28.11 Mr Goodwin referred the Tribunal to the case of the Solicitors Regulation Authority v Sharma [2010] EWHC 2022 (Admin) in which the Respondent had been suspended by the Tribunal albeit dishonesty had been found proved. On appeal, Mr Justice Coulson had stated: 13. It seems to me, therefore, that looking at the authorities in the round, that the following impartial points of principle can be identified: (a) Save in exceptional circumstances, a finding of dishonesty will lead to the solicitor being struck off the roll, see Bolton and Salsbury. That is the normal and necessary penalty in cases of dishonesty, see Bultitude. (b) There will be a small residual category where striking off will be a disproportionate sentence in all the circumstances, see Salsbury. (c) In deciding whether or not a particular case falls into that category, relevant factors will include the nature, scope and extent of the dishonesty itself; whether it was momentary, such as Burrowes, or over a lengthy period of time, such as Bultitude; whether it was a benefit to the solicitor (Burrowes), and whether it had an adverse effect on others. 14. Mr Treverton-Jones endeavoured to draw a distinction in sentencing practice between cases of dishonesty involving the appropriation of clients money and other cases of dishonesty which did not involve financial loss to clients. It does not seem to me that this distinction is borne out in the authorities to which I have referred. It seems to me that it is the nature, scope and extent of the dishonesty itself that matters. Questions as to financial loss may however be relevant in considering whether a particular case falls within or outside the exceptional category to which the authorities refer. 28.12 Mr Goodwin submitted that the normal and necessary penalty for dishonesty was for the Respondent to be struck off the Roll of Solicitors. He said that it was only in exceptional circumstances as per the dicta in Sharma that that could be avoided. In the case before it, Mr Goodwin submitted that no such exceptional circumstances existed. 28.13 In relation to allegation 1.7, Mr Goodwin said that the Respondent had acted without integrity and had diminished the trust the public placed in him and in the profession by his conduct. He had also failed to exercise effective management of his firm in particular with regard to financial control of budgets, expenditure and cash flow.
Mr Goodwin said that the conduct of the Respondent which had led to the breaches of Rules 1.02 and 1.06 of the SCC and Rule 5.01(1)(j) was two-fold: The Respondent had had a referral arrangement with BCR for the provision of ATE policies and although he had successfully recovered ATE premiums from third party insurers, he had delayed in a number of matters or had failed to account at all to BCR for the recovered premiums, totalling 14,914. Cheques had been written to BCR but had been retained by the firm. A schedule produced to the FIO on 17 August 2010 showed that for the period January 2010 to June 2010 the firm s liability to BCR totalled 83,495. The firm had paid part of the outstanding liability in the sum of 68,581; and The Respondent had drawn an average net monthly salary from the firm of 7,000 to 7,500 and in June 2010 had increased that to 9,500. In the period June 2009 to May 2010 the Respondent had drawn a total salary of 112,100 net. On three occasions the Respondent had drawn advance wages in the period March to May 2010 which totalled 15,000. He had told the FIO in a letter dated 10 August 2011 that: 51. Unfortunately I have had substantial personal outgoings in recent years which have had to be maintained. This was in addition to my wife being on maternity leave between May 2010 and July 2011 and giving birth to our daughter which placed an extra burden on our personal finances as we only had one income with a new baby. 28.14 Mr Goodwin submitted that these were very serious allegations against the Respondent which included not only breaches of the SAR but breaches of the SCC core duties of integrity and public trust and confidence. The Respondent had admitted all of the allegations against him including that he had been dishonest with regard to two of the allegations. Submissions on behalf of the Respondent 28.15 Mr Armstrong said that the Respondent was an able and committed specialist personal injury solicitor who had had an unblemished career for a number of years and in relation to whom there had previously been no suggestion of improper conduct. He referred the Tribunal to the various testimonials which had been produced on behalf of the Respondent and said that they bore witness to the high professional regard in which he was held. 28.16 Mr Armstrong submitted that had it not been for the Respondent s acquisition of API Solicitors, subsequently Injury Specialists Solicitors Limited ( ISS ), it was highly unlikely that the Respondent would ever have appeared before the Tribunal. Mr Armstrong said that the Respondent had expressed his deep personal and professional regret for his appearance before the Tribunal and offered the Tribunal a sincere apology. 28.17 Mr Armstrong told the Tribunal that he did not wish to detract from what had been admitted by the Respondent but he wished to summarise the background to events which had led to the Respondent s appearance before the Tribunal and the allegations
he faced and which he had admitted. Mr Armstrong said that his admissions also went to his integrity generally. 28.18 Mr Armstrong referred the Tribunal to the letter from the Respondent to the FIO dated 10 August 2011 and said that the Respondent relied upon the facts as set out in that letter. He said that the Respondent had purchased API Solicitors Limited on 9 July 2008 from Mr ST and API had subsequently become the Respondent s firm ISS. Mr Armstrong said that difficulties had come to light regarding certain unacceptable practices which had been conducted at API by Mr ST and two other employees, namely ghost ATE policies and in relation to doctors fees where in a number of cases it was unclear whether monies should have been paid to the doctors or refunded to the insurers who had paid them. 28.19 Mr Armstrong said that the Respondent had cooperated fully with the police and Applicant s investigations into the ghost policies relating to API and which had not involved the Respondent. He said that the Respondent had been exonerated of any wrongdoing. Part of the investigation had involved what ISS was doing about recovery of the ghost policy monies. Mr Armstrong said that by April 2009, NU had investigated the ghost policies and had taken action against ISS and the Respondent but court proceedings and a Freezing Injunction had been discharged on 29 April 2009 against ISS and the Respondent and Mr Justice Bean had made an Order for costs in the Respondent s favour. He said that settlement had also been reached between the Respondent and NU. 28.20 Mr Armstrong said that a further consequence for the Respondent had been that his professional indemnity insurance premiums had risen significantly; 200,000 for the first year and 100,000 for the second year. The burden had fallen on the Respondent despite the fact that he had not been responsible for API s misconduct. 28.21 Mr Armstrong said that further proceedings had been brought by Mr ST against the Respondent in December 2009 for the balance of the monies due under the Share Purchase Agreement for the purchase of API, which the Respondent had ceased paying following discovery of the fraud. Mr Armstrong said that intense litigation had followed where ISS/the Respondent had sought recovery by way of indemnity for additional ghost policies of which there were approximately 2,000 and Mr Armstrong said that there had also been statutory demand proceedings issued against the Respondent in April 2010 which the Respondent had had set aside in March 2011 and Employment Tribunal proceedings brought by two former employees which had been dismissed upon withdrawal. ISS had been indemnified against monies due to third party insurers and by ST and BT in the sum of 193,666.67 plus interest and by RS, TM and RP in the sum of 96,333.33 plus interest. Mr Armstrong said that RS, TM and RP had also been ordered to pay a contribution towards the Respondent s/iss costs in the sum of 130,000. 28.22 Mr Armstrong informed the Tribunal that in addition to the NU litigation, for the benefit of the insurers, the Respondent had done his best to recover the 300,000 due in relation to the ghost policies. He had made no recovery of his professional indemnity insurance increase and had put the insurers interests above his own and that was to his credit. The Respondent had been faced with having to wind-up ISS but instead he had taken a highly principled decision to do his best to recover the
monies and he had overstretched himself which had had a knock-on effect on management by the Respondent. 28.23 Mr Armstrong told the Tribunal that the Respondent had also discovered that fraud had been committed at the firm by the firm s book keeper, Mr SS, who had misappropriated money from the firm totalling approximately 100,000. The Respondent had commenced civil proceedings against Mr SS in the High Court and had obtained judgment in the sum of 57,485.71 plus interest plus costs against Mr S and the GA/the CE which had cashed the cheques for Mr S but neither had any substantial assets. Mr Armstrong said that had been a further drain on ISS and the Respondent s resources. 28.24 Not only had there been an effect on the firm s cash flow but Mr Armstrong said that the financial difficulties had led to the firm s ability to take on further work having been severely limited. The Respondent had also had limited success in securing funding for the firm from other sources. 28.25 Mr Armstrong submitted that the doctors monies had not been traditional client money and in the normal way, it would have been treated as a disbursement and paid to the expert within the required period of time. But the police investigation had given rise to the question as to whose money it was; the doctors or the insurers. The Respondent had, on advice, paid the money into a separate account which had predated the investigation and when informed that the title of the account should have included the word client that had been done. 28.26 Mr Armstrong submitted that the reasons for the Respondent s/firm s cash flow problems were obvious but the Respondent accepted that he had utilised client monies improperly and that he had, by his actions, misappropriated client monies. 28.27 Mr Armstrong referred the Tribunal to the various testimonials produced on behalf of the Respondent including one from his current employer and solicitor, Mr Posner. Mr Armstrong submitted that it would be a sad loss to the profession if the Respondent was struck off but that having regard to Sharma, Mr Armstrong could not say that there had been exceptional circumstances in the case before the Tribunal. He submitted that it came close and there had been certain exceptional features but having considered it carefully with the Respondent, it was not exceptional. 28.28 In response to a question from the Tribunal, Mr Armstrong confirmed that the Respondent had joined API shortly before he had purchased it and he had been given every impression that the firm was well run and successful. The Tribunal s Findings 28.29 The Tribunal applied its usual standard of proof namely beyond reasonable doubt. 28.30 The Tribunal had read all of the documents to which it had been referred on behalf of the Applicant and the Respondent and it had carefully considered all of the evidence presented.
28.31 The Tribunal found the allegations proved on the facts and on the documents. The Tribunal noted that the Respondent had admitted all of the allegations including the allegations of dishonesty. It found that the Respondent had acted dishonestly in relation to allegations 1.3 and 1.4 and it was satisfied on the combined tests in Twinsectra v Yardley that by the standards of reasonable and honest people the Respondent had acted dishonestly and that he knew by those standards that he had been dishonest. 28.32 Although the Tribunal had not been so invited by counsel for the Respondent, it had considered whether the case was one of exceptional circumstances having had regard to Sharma and whether the ultimate penalty would be inappropriate. The Tribunal noted in particular that the transfers had not been one-offs and had occurred over a lengthy period of time and for significant sums which had benefitted the Respondent. In addition, he had been told twice that the monies were client monies but had continued to utilise them. The Tribunal had considered all of the circumstances surrounding the facts of the case and it had concluded that the appropriate penalty was one of strike off as the case was not within the category of "exceptional circumstances". Mitigation 29. The submissions on behalf of the Respondent had included mitigation on his behalf. Sanction 30. The Tribunal had found all of the allegations proved including those of dishonesty and the Tribunal acknowledged that the Respondent had admitted all of the allegations including those of dishonesty. 31. Whilst the Respondent had admitted all of the allegations, the Tribunal considered that the breaches of the SAR had been very serious. The Respondent had deliberately and knowingly misappropriated client monies for his own use over a lengthy period of time to bolster his firm and maintain his own very good standard of living. The breaches of the SCC were equally as serious and the Tribunal took a very dim view of a Respondent acting without integrity, diminishing the trust of the public in the profession and failing to exercise adequate control of his firm s financial arrangements. 32. The Tribunal had to balance imposing a sanction which was both reasonable and proportionate and which reflected properly its findings whilst protecting the public interest and the profession s reputation. In all the circumstances of the Respondent s case, there could be no other appropriate sanction than that he be struck off the Roll of Solicitors. Costs 33. Mr Goodwin informed the Tribunal that the costs had been agreed with the Respondent in the sum of 25,000 inclusive of VAT and disbursements.
34. Mr Armstrong said that the Respondent s own means were minimal. He said that the Respondent s wife did not work and that had increased his personal expenditure. He referred the Tribunal to the Respondent s statement of income and expenditure and assets and liabilities. Mr Armstrong said that from that, the Tribunal could see that his income would cease if he was struck off and that he had significant debts and no real assets. The reality therefore was that the Respondent could not afford to meet any costs order made against him and he invited the Tribunal to make any such order not to be enforced without leave of the Tribunal. 35. Mr Goodwin referred the Tribunal to Mr Posner s letter/testimonial dated 30 July 2012 which mentioned the possibility of his firm applying for a Section 41 order under The Solicitors Act 1974 to enable the firm to employ the Respondent in a fee earning capacity, once he had been struck off the Roll. Mr Goodwin submitted that if granted, such an order would enable the Respondent to continue working and earning a salary albeit not as a solicitor. He said that the Applicant was reasonable with regard to costs and would be open to enter into discussions with the Respondent as to payment should the Tribunal make an order for costs in the Applicant s favour. 36. Mr Armstrong said that there was no certainty that a Section 41 order would be made and in any event there would be a hiatus between the Respondent being struck off and the Section 41 application being made. 37. The Tribunal had had regard to the Respondent s statement of income and expenditure and assets and liabilities. It noted that at one time the Respondent had been earning a salary in the region of 7,500 per month but that had reduced considerably to 3,500 per month. He had significant outgoings and debts and very little by way of assets. 38. The Tribunal ordered that the Respondent pay the Applicant s costs of 25,000 as agreed not to be enforced without permission of the Tribunal. Statement of Full Order 39. The Tribunal Ordered that the Respondent, Jason Arthur Fenney, solicitor, be Struck Off the Roll of Solicitors and it further Ordered that he do pay the agreed costs of and incidental to this application and enquiry fixed in the sum of 25,000.00, including VAT, disbursements and costs of the Forensic Investigation, such costs not to be enforced without leave of the Tribunal. Dated this 14 th day of August 2012 On behalf of the Tribunal Miss N. Lucking Chairman