Protecting your clients
Jim Varley
Partner
020 7880 4376
Rosemary Pijper
Solicitor
020 7880 4312
For clients, and the general public at large, trust in solicitors’ ability to safeguard their monies is fundamental to the operation of the legal system in its totality. However, this trust is, whether intentionally or not, on occasion breached and Devonshires are the nation’s leading experts in advising and investigating such breaches, and most importantly, recovery clients’ money. So far this year, Jim Varley and Philip Barden have advised on the two largest solicitor account deficits in history.
Advising on Largest Solicitor Account Deficit
In mid-august 2023, we were approached by the directors of Axiom Ince, a multinational law firm, to assist and advise them following an SRA investigation and intervention into the sole owner of the practice, Pragnesh Modhwadia. The intervention ultimately led to the law firm being closed down by the SRA who took full control of its operations.
The Axiom Ince matter is the largest ever solicitor’s client account deficit, at circa £64.5 million. From the point of our instruction, we were instrumental in advising on and successfully obtaining freezing orders against Mr Modhwadia and various other entities whom it is believed had wrongly received significant monies from the firm’s client account.
We have since this point issued claims against Mr Modhwadia and these entities, and have so far been successful in entering judgment against three of them, with Mr Modhwadia also having been made bankrupt.
Axiom Ince is now in administration, and we are instructed by the administrators to advise on the steps to be taken to try to recover the missing millions.
Advising on Second Largest Solicitor Account Deficit
This matter arose out of the failure of Kingly Solicitors to properly safeguard the client account, resulting in the loss of £11.4 million from the client account. All 15 of its branches were shut down by the SRA in 2020. Until Axiom Ince this was the largest ever solicitor’s client account deficit in history.
Monies had been channelled through various associated companies, all of which were placed into either Administration or Liquidation in order that the recovery process could commence.
One of the associated companies had provided loans to various third party individuals or companies, in general those loans being secured by charges against property.
In August of this year we were successful in acting for a Fixed Charge Receiver who had been put in by the Joint Liquidators in obtaining an Order for Possession in respect of one such borrower’s property. The matter was complex and hard fought, complicated by the fact that the borrower sought to attack the validity of the underlying charge, claiming it was a “sham”. The action therefore involved not only seeking possession on behalf of the Receiver, but also defending the lender company against the allegations of “sham” in relation to the underlying charge. At trial we were successful in defeating the allegation of “sham” and in obtaining an Order for Possession against the property, with indemnity costs being awarded against the borrower.
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