Former personal injury head used client account to top up compensation awards

The former head of personal injury at North West-based Slater Heelis has been struck off for dishonesty after withdrawing money from the firm’s client account to top up a client’s compensation award.

In August 2013, Lynne Muscroft accepted an offer to settle a dental negligence claim for £5,000 without first informing her client or taking instructions from her. It emerged later that the client understood her claim had settled out of court six months previously for £60,500.

The 53-year-old solicitor qualified in 1990 and spent her whole career with the firm, becoming a partner in 2004, and then a member in 2012. After leaving the firm in 2014, she admitted that there had never been an agreement between the parties about a £60,500 settlement.

To make up the shortfall, Muscroft had transferred money from unrelated client matters into her client’s account. The client ledger showed seven transfers, the cumulated amount of which amounted to the claimed settlement.

She admitted she had not acted with integrity and had been in breach of clients’ best interests. She also admitted she had breached account rules and that her conduct had been dishonest.

The SRA investigated allegations of negligence in June 2016 after the firm reported concerns that Muscroft had “concealed her alleged negligence by making a series of improper payments to ‘satisfy’ clients’ expectations and/or third party costs orders”.

The investigation concluded in a report concerned only with Muscroft's conduct.

The solicitor admitted she knew she was acting improperly when she authorised the transfers, that her actions were wrong and that she had misled her client, the firm, and the defendant’s insurers and solicitors.

Before the SRA investigation, she also admitted that she had misused client funds for more than ten years.

In mitigation, Muscroft said she had not gained personally from her actions and that her misuse of the funds was undertaken “in a misguided attempt to conclude cases to the satisfaction of clients and the firm”.

She did not argue that her circumstances affected her decision making to the extent that she didn’t appreciate her actions were dishonest, neither did she claim that there were exceptional circumstances in the case that would avoid strike off, the tribunal said.

In an application resolved by way of agreed outcome, Muscroft agreed to be struck off the roll. She will also pay the SRA’s costs of £17,438. Unusually, the regulator proposed that the costs order should not be enforced without leave. The tribunal agreed.

Slater Heelis managing partner Chris Bishop said the firm discovered discrepancies in a number of files handled by Muscroft in 2014. "We immediately reported her to the Solicitors Regulation Authority, terminated her contract and ensured none of her clients were adversely affected as a result of her actions."

Bishop said the firm "complied fully with the SRA investigators who apportioned no blame to the firm and were complimentary about all we had done to assist with their investigation. We conducted a thorough review of our internal procedures and have enhanced them further.”

Jean-Yves Gilg, editor-in-chief

jean-yves.gilg@solicitorsjournal.co.uk | @jeanyvesgilg