Scots lawyer suspended for five years after firm overcharged clients

Philip Hogg, 50, has had his practising certificate suspended by the Scottish Solicitors’ Discipline Tribunal (SSDT) for five years, after his firm was found to have claimed fees to which it was “not entitled” and he was found to have drawn from the firm while it was being “financed by overcharges to clients”.

The tribunal heard that the respondent was, along with twin sister Alison Greer, a partner in the firm Alder Hogg in Kirkintilloch.

In 2007 Mrs Greer was made the subject of a complaint that she allegedly failed to respond to correspondence, but proceedings before the SSDT were abandoned when it became apparent that the letters had been hidden from her by her husband Kenneth Greer, a non-lawyer who was the firm’s office manager and cashier.

However, the firm continued to employ him until a judicial factor was appointed in September 2012, and a high degree of supervision was required.

But the complaint against the respondent was that between March 2002 and September 2011, his firm took fees including VAT of nearly £220,000 from ledgers for a couple’s executry, but the firm was found to have overcharged by £90,000.

Files in relation to the executries of three other clients were also assessed and the fees taken were found to be “excessive”, the firm having overcharged by £8,000, £6,000 and £4,500.

The firm was also found to have taken fees to which it was “not entitled” although in most cases the money was re-credited to the ledger, but firm’s client account was continually in deficit from October 2008 until the appointment of the judicial factor and the respondent continued to draw from the firm while it was being financed by excessive charges to clients.

In total the overcharges amounted to over £175,000 and the net figure not credited back amounted to almost £119,000, resulting in claims having to be paid out by the solicitors’ guarantee fund.

The respondent denied any knowledge of the financial practices described in the case against him and insisted he had no knowledge of the complaint against his sister or that a high degree of supervision was required of his brother-in-law, but he admitted that he ought to have been aware of what was going on.

The tribunal was asked to recognise that there was “no actual knowledge of wrongdoing” regarding excess fees in some of the executry matters handled by others, and that he was “not the perpetrator or a knowing participant in some firm wide scheme or conspiracy to overcharge”.

The respondent had effectively pleaded guilty to professional misconduct and the consequences for him were “severe”, as he lost his firm, his career and his livelihood, and he now had “very limited income”.

However, the tribunal found that he failed in his obligation to see that the firm in which he was a partner complied with the accounts rules, failed in his duty to supervise the firm’s office manager and cashier, failed to take steps to ensure that fees being charged to executries were properly charged, and failed to see that at all times the sums at credit of the client account exceeded the sums due to clients.

In a written decision, SSDT vice chairman Colin Bell said: “The tribunal was satisfied that the respondent’s failure to supervise adequately the accounting practices of his firm was extremely serious. It was not expected that the respondent should personally carry out all the work in his firm but if he decided to delegate any work there remained a duty of supervision and the respondent must accept responsibility for the improper actions which resulted from a failure of supervision.

“The respondent, as a partner, had a duty to supervise all aspects of the practice including fees rendered. If the respondent had carried out his duty of supervision in accordance with the standards expected of any competent and reputable solicitor then he would have been aware of the accounting irregularities.”

When assessing sentence, the tribunal considered that it was “reckless and naive” for the respondent to have maintained drawings while taking “no responsibility” to check the source of those drawings.

“Part of being a solicitor is being financially aware regarding your own drawings and those of your partners,” the tribunal said.

Mr Bell added: “The tribunal were of the view that the respondent had not properly understood the responsibilities of a partner… As a partner he had a duty to educate himself regarding cash room practices.

“The respondent lacked real insight into the consequences of his conduct. The tribunal was of the view that the appropriate sentence in this case was to suspend the respondent from practice for a period of five years to demonstrate the gravity of the misconduct.”