Scottish Solicitors Discipline Tribunal
Reports of cases relating to David James Clark; Richard Sutton Housley; Michael Louis Karus
David James Clark
A complaint was made by the Council of the Law Society of Scotland against David James Clark, solicitor, Edinburgh. The Tribunal found the respondent guilty of professional misconduct in respect of his failure in his duties under the CML Handbook and at common law to provide material information to the lenders in conveyancing transactions, his breaches of rule 6(1)(c) of the Solicitors (Scotland) Accounts, Accounts Certificate, Professional Practice and Guarantee Fund Rules 2001 as a result of the aforesaid failures, his breach of rule 8 of the Solicitors (Scotland) Accounts, Accounts Certificate, Professional Practice and Guarantee Fund Rules 2001, and his breaches of rule 24 of the Solicitors (Scotland) Accounts, Accounts Certificate, Professional Practice and Guarantee Fund Rules 2001 in respect of his failure to comply with the Money Laundering Regulations 2007.
The Tribunal censured the respondent and directed in terms of s 53(5) of the Solicitors (Scotland) Act 1980 that for a period of three years any practising certificate held or issued to the respondent shall be subject to such restriction as will limit him to acting as a qualified assistant to such employer as may be approved by the Council or its Practising Certificate Subcommittee, and thereafter until such time as he satisfies the Tribunal that he is fit to hold a full practising certificate.
The complaint involved 11 transactions with significant irregularities. The respondent had failed to report obviously significant matters to the lenders in some of these transactions. In two cases the seller of the property had provided the deposits for the purchase. This was not reported to the lenders. In two transactions the purchase price noted in the instructions given by the lenders did not match the price elsewhere within the files. There were significant failures in respect of the Money Laundering Regulations. In many cases the respondent had failed to check clients’ identification. He failed to carry out any checks as to the source of the funds for deposits.
The parts of the CML Handbook breached in this case were principally designed to prevent fraud. There had been no suggestion of deliberate dishonesty or personal gain. Having regard in particular to the protection of the public, the Tribunal concluded that the most appropriate disposal was a restriction on the respondent’s practising certificate, restricting him to working under supervision for a lengthy period and until he had satisfied the Tribunal that he was fit to hold a full practising certificate. Three years was considered the appropriate period.
Richard Sutton Housley
A complaint was made by the Council of the Law Society of Scotland against Richard Sutton Housley, formerly solicitor in practice in Bathgate. The Tribunal found that the respondent had been convicted on three charges and sentenced to terms of imprisonment totalling four years, six months and that accordingly s 53(1)(b) of the Solicitors (Scotland) Act 1980 applied. The Tribunal struck the name of the respondent from the Roll of Solicitors in Scotland.
This was a very serious conviction, involving (1) a fraudulent scheme to avoid payment of income tax; (2) inter-company transactions to facilitate the use of proceeds of crime amounting to £1,836,375 (the principal offence); (3) failing to make disclosures in respect of two individuals he knew or suspected were engaged in money laundering. The Tribunal particularly noted the sentencing judge’s remarks: “The solicitor’s role as a gatekeeper in preventing money laundering is not limited to carrying out formal identity checks. It is of much greater importance that members of the legal profession act with honesty and integrity when implementing the statutory obligations imposed upon them by the Proceeds of Crime legislation. They are trusted to do so by the law enforcement agencies and by their fellow lawyers. In relation to the matters before me, you have fallen short of the standard required of a member of legal profession.” The Tribunal endorsed this statement. In the circumstances, the Tribunal had no option but to remove the respondent’s name from the roll.
Michael Louis Karus
A complaint was made by the Council of the Law Society of Scotland against Michael Louis Karus, formerly solicitor in practice in Edinburgh. The Tribunal found the respondent had been convicted of embezzlement and sentenced to a period of imprisonment of three and a half years and that accordingly s 53(1)(b) of the Solicitors (Scotland) Act 1980 applied. The Tribunal struck the respondent’s name off the Roll of Solicitors in Scotland.
The Tribunal considered that the charge, which involved taking £413,052 while acting as executor in an estate, was a very serious offence committed whilst the respondent was in a position of trust. The Tribunal considered that such an offence undoubtedly had a significant negative effect on the reputation of the profession which had not been negated by the money being subsequently repaid. Members of the public must be able to have confidence that any solicitor whom they instruct will be a person of unquestionable integrity, propriety and trustworthiness. The Tribunal took account of the fact that the respondent had co-operated with the Society regarding this complaint, noted the respondent’s current circumstances and that he had moved on with his life in the years since the offence. However, the offence clearly demonstrated that the respondent was not a fit person to be a solicitor.