Scots lawyer who removed client files from firm’s office found not guilty of ‘professional misconduct’

Lynsey McLean decided to take matters into her own hands and remove 180 of the 200 client files after she learned that her partner in the firm, Simon Hutchison, had been subject to sequestration proceedings by HM Revenue & Customs.

The Scottish Solicitors’ Discipline Tribunal found that while she took the files “covertly” her actions were not “dishonest”.

The tribunal heard that the respondent Ms McLean entered into a partnership with the secondary complainer Mr Hutchison in August 2010 by way of oral agreement, but prior to the partnership commencing Mr Hutchison advised Ms McLean that he was in financial trouble and owed HMRC in respect of personal income tax.

Ms McLean also discovered that there was a pending sequestration petition in respect of Mr Hutchison before Falkirk Sheriff Court.

Fearful that she would lose her employment and under pressure from Mr Hutchison, she arranged borrowings with her bank in order to make the necessary payment to the firm upon her becoming a partner and it was agreed that on 1 August 2010 they would commence partnership, which traded under the name Hutchison McLean.

In September 2010, with the benefit of a bank loan she made payment of £100,000 from her bank account to HMRC to the extent of £77,000 and the balance of £23,000 being transferred to the his bank account – as a result of which his sequestration was avoided.

But their relationship began to sour when without any prior warning on Christmas Day 2010 Ms McLean noticed that her agreed drawings had not been paid and for the next several months she would receive reduced payments, with Mr Hutchison – who was the cashroom partner – instructing the cashier what, if any, drawings were to be paid out.

In or around June 2011 it came to Ms McLean’s attention that £2,000 to £2,500 was being paid out per month from the firm account to his then partner/fiancée’s account – despite an agreement that no personal expenditures would be put through the business.

From July 2011 onwards there was a pattern of Ms McLean not receiving her share of drawings on the agreed monthly dates and she continually sought to have Mr Hutchison engage with her and give a detailed account of the firm’s incomings and outgoings, but to no avail.

Over the next several months it was brought to Ms McLean’s attention by the firm’s cashier that Mr Hutchison was charging monies to his credit card for matters which had nothing to do with the firm’s expenditure.

In August 2011 a car repair bill had been charged through the firm for a vehicle not used by either of the partners and on at least one occasion he took drawings of £12,000 in one month.

When she finally had an opportunity of discussing matters with him, she said she wanted to go through the firm’s whole records and identify efficiencies but he indicated that he had no intention of doing so.

Then, on 2 December 2011, after seeing a hand written fax from Mr Hutchison to HMRC which confirmed that a payment of £14,000 had been transferred to the Revenue and learning that he was subject to fresh sequestration proceedings by HMRC she contacted the Law Society advising that she would cease to be a partner in Hutchison McLean from that day and as at 5 December 2011 she would be working with Marshall Wilson Law Group.

That evening, as a “temporary measure” based on an “apprehension” about what might happen if Mr Hutchison was sequestrated – though it later transpired that the petition was dismissed – Ms McLean decided to remove the vast majority of the firm’s files to another location and arranged to deliver the files removed from the partnership’s offices to the Falkirk High Street offices of Marshall Wilson Law Group.

The following afternoon, when Mr Hutchison attended at the office he noticed that approximately 180 client of the firm’s 200 files were missing and contacted Ms McLean demanding that she explain her position and return the files to the office.

In a hand-delivered letter he said he accepted her resignation and gave her 24 hours to return her laptop, car, mobile phone, credit card and all files to his home address, but she told him that she had not resigned and explained why in the light of his failure to engage and persistent over spending she had taken the action she did.

Mr Hutchison then instructed solicitors to pursue the return of the files that had been removed from the office and also made a complaint to the Scottish Legal Complaints Commission in connection with the Ms McLean’s conduct.

Following service of a summons the files were returned over the following months and the return was complete by the end of March 2012, at which time the Court of Session pronounced an interlocutor allowing a Joint Minute to be received in settlement of the action, and finding and declaring that as from 3 December 2011 the partnership of Hutchinson McLean was dissolved.

A complaint was lodged with the SSDT by the Law Society, but the tribunal found Ms McLean not guilty of professional misconduct.

However, it considered that her conduct “may amount to unsatisfactory professional conduct” and remitted the complaint to the Council of the Law Society of Scotland.

In a written decision, tribunal chairman Alistair Cockburn (pictured) said: “The tribunal cannot find the respondent’s conduct in taking the files to be reckless given that if the secondary complainer had been sequestrated there might have been immediate difficulties in getting access to the office premises and the client files.

“The tribunal accepts that the respondent took the files covertly and without the knowledge of her partner but the secondary complainer by his actings had breached the duty to communicate with other members of the profession and was himself in breach of B1 of the Standards of Conduct and in particular Rule 1.14.1. In these circumstances the tribunal was unwilling to find that the respondent’s action in taking the files was dishonest.

“Where a partner through their conduct indicates that he is not prepared to be bound by his obligations as a partner and this destroys the required trust and confidence that must exist in a partnership, it is difficult to expect that the innocent partner should act with propriety to the benefit of the partner who acts improperly, provided always that the client’s interests are protected and any real risk to clients is properly managed and controlled.

“Non-observation by solicitors of Law Society guidance will not automatically result in a finding of professional misconduct but any individual partner contemplating removing files from an office in such a situation will remain at risk that his/her individual conduct will pass the Sharp Test and be found to be serious and reprehensible and to amount to professional misconduct. In the whole circumstances of this particular case the tribunal did not find that the respondent’s conduct was sufficiently serious and reprehensible to amount to professional misconduct.”

In remitting the case for the Law Society to consider the issue of whether the Ms Mclean may be guilty of unsatisfactory professional conduct, the tribunal suggested that they also consider the findings in fact in relation to the actings of Mr Hutchison.