Saturday, March 28, 2009

Advisory : Clients must protect their money from unsafe legal firms as Law Society's Guarantee Fund fails.

Law SocietyYour money is no longer safe with your lawyer. £50 million plus of money belonging to clients of Scottish legal firms is at considerable risk of loss, after revelations the Law Society's Guarantee Fund has less than £2 million left in its coffers to cover the millions held by Scottish solicitors on behalf of their clients in everything from house purchases & sales to the administration of wills, investments & settlement payments.

AdvisoryMy advice : Clients should immediately withdraw their funds from any legal firm or solicitor who may be holding monies on their behalf. If you have funds being held by your solicitor, make it your priority this week or as soon as possible to ensure the safety of your wealth, or you may end up losing it.

There is simply no way the legal profession can guarantee the safety of your money in the wake of the financial downturn. You will have to be the best judge yourselves as to how to safeguard your own wealth, but trusting it to your solicitor who lacks any protection for its loss, is no longer an option.

While the news is filled with reports about banks & building societies having to be bailed out by the Government, little attention has been paid to the rate of legal firms heading for disaster, and not forgetting the huge rise in fraud cases involving solicitors falsifying banking records and financial transactions, usually for their own benefit. It is the Guarantee Fund which would cover such frauds on client’s funds, but the compensation scheme run by the Law Society which is supposed to repay defrauded clients, has been unmasked as little more than a theatre spectacle, offering nothing to victims of ‘crooked lawyers’.

I reported earlier on the Guarantee Fund’s problems and client’s attempts to claim from it here : Law Society's 'Guarantee Fund' for clients of crooked lawyers revealed as multi million pound masterpiece of claims dodging corruption

A legal insider at the Law Society said when asked about the Guarantee Fund problems said : “We are going to end up in a situation where there wont be enough money coming in from Solicitors to the Guarantee Fund to keep adequate levels of money available to cover failed legal business or lawyers taking their clients money for themselves.”

This claim is backed up by revelations that reserves in the Guarantee Fund only amount to a paltry £1.7 million at this time, and with significant outstanding claims standing at £4.3 million, together with incoming claims expected to reach double figures in the millions this year over buy-to-let & mortgage fraud schemes, there seems little prospect of clients recovering anything from solicitors who decide to take the money for themselves.

As an example to emphasise the lack of safety of clients funds, a client who contacted me who entered into a house purchase transaction with a legal firm now faces a total loss of £185,000, which was handed over to his solicitor who was holding it in the legal firm’s client account on a short term basis while the client’s property transaction went through.

Eleven weeks later, the deal had still not been completed and it emerged the solicitor had taken £47,000 of the clients cash to prop up his legal firm’s huge debt. The solicitor then told the client the seller had made off with his money, and had refused to hand over the titles.

The client uncovered what had actually happened through his bank and an ex member of staff from the legal firm in question, but the Law Society did nothing. The client is still seeking legal representation to sue the Law Society and the solicitor concerned, who continues to represent unsuspecting clients in property transactions.

It is reported that discussions have taken place at the Law Society of Scotland on the idea of seeking external funding to the Guarantee Fund, or even asking for Government assistance of some kind, if the situation arises, as looks the case that the Law Society will not be able to meet its ‘official’ commitment to ‘safeguard’ clients funds – a commitment in reality it has never managed to achieve in the Society’s entire history.

However, fears were expressed by some lawyers that the public might not be too receptive to millions of pounds of taxpayers money being used to keep legal firms and lawyers afloat, given a general antipathy towards the legal profession for their poor regulatory conduct and overcharging of fees over the years for very poor legal services.

During discussions on how best to proceed with the flagging Guarantee Fund, officials warned that any external bailout of the compensation scheme would open up the actual workings of the Guarantee Fund & Master Policy to unwelcome public scrutiny, where questions would arise over the suspicious nature of how client claims for compensation are ‘managed’ and transferred back & forth between the two schemes to delay, deceive and generally thwart payouts to genuine victims of ‘crooked lawyers’.

A leading accountancy firm gave comment last week, claiming there may be up to £100 million of private & corporate clients money held by Scots legal firms which may well now be in unsafe hands.

An accountant with the firm who declined to be named said : “You would be correct in assuming there is a significant risk to funds held by your solicitor or legal firm in current market conditions. The advice we could only offer just now is to bank it and look after it yourself. After all, it’s your money, why let anyone else hold it or manage it in this financial climate.”

So, there you have it. If you currently have money with a lawyer, for any reason at all, take it out of their hands and ensure you put it in a safe place where you control it, not someone else who will only use it to further their own financial gain at your expense.


Anonymous said...

sound advice and I can see you are an expert at this

I assume there will be howls of protest from law firms they can be trusted not !

Anonymous said...

With Dunfermline building society just collapsed I'd agree with you completely on this one.Its your money keep it safe yourself and stop the likes of lawyers and bankers to keep it safe because they wont!

Anonymous said...

Solicitors have long since been allowed to remain effectively unaccountable and independent from any credible regulation - courtesy of the Law Society.

As far as trusting your money to any lawyer is concerned well, there's one born every minute.

Anonymous said...

Agreed.I wouldn't trust any lawyer with my money especially now.

Anonymous said...

Any law firm that does that doesnt deserve to have ANY clients.

Your blog is an incredible piece of work Peter please keep writing about these crooked lawyers and their partners in crime !

Anonymous said...

I hope the poor client who lost his money with that thieving rat gets it back although from reading more of your postings I doubt it.

Isn't it a pity there is only one guy speaking up about this ??? Where the fuck are Citizens Advice and the consumer lot ? How about reporting that thief to the Police or are they just too far up the Law Society's arse to do anything now ???

ezra said...

Thankfully I don't have any money with a lawyer but hope people listen to this instead of sitting on their hands like when the banks started to go down.

Anonymous said...

I agree also and I hope people think twice before being stupid enough to hand over money to a lawyer after reading some of the things here especially to do with their will.

Anonymous said...

I agree with your advice 100% Mr Cherbi.

Myself and my wife were about to buy a house through the ESPC but our solicitor (also an ESPC member) started acting up and demanded we pay him up front for the conveyancing.I refused and he then wrote us a nasty letter threatening legal action if we didn't complete the purchase (I had not even put a bid in at the time of his letter).His letter completely put us off buying the house.I contacted the owner to let him know what happened and he is furious because his solicitor told him we were still in the running for it which we are definitely not.I will send the letter onto you as I located your contact email and you may use it as you like.

This was a very nasty experience for us and I can only support what you say about lawyers probably its best to stay away from them completely.

Peter Cherbi said...

Thanks for all your comments on this article.

I would also advise that clients of building societies which may operate within their solicitors offices, also transfer their funds out of those accounts into another institution without delay.

Earlier today I was passed details of a solicitor who decided to withdraw £4,000 from his client's account which was held in a building society the solicitor was involved with. The solicitor used it to pay himself fees which were in dispute.

I will modify the advisory suitably to reflect that issue and again, advise consumers to withdraw money from their solicitor or financial institutions connected with their solicitor's legal firm with immediate effect.

Anonymous said...

spot on kid and keep up the pressure
i'd love to see droves of clients wising up to these bloody roaches and taking all their money away from them
great stuff i admire you lots

Anonymous said...

I wouldn't trust any bank branch within a lawyers office ! People must be mad to use them !

Anonymous said...

I called my solicitor this morning on your advice and am removing him as executor on my will as well as going in tomorrow morning *he tried to put me off) to collect my letters and everything else he has from me.

He was very angry when I told him I had been advised by a friend to do it and suggested this friend needed shooting so if you get any threats frmo lawyers over this I will back you up

Peter Cherbi said...

# Anonymous @ 9.09pm

Thanks for the letter, received this morning. I have replied.

# Anonymous @ 11.12am

Thanks for your comment and a very good idea to uplift your client file.

I think in view of the fact that some legal firms are about to go insolvent that is a prudent measure, and will issue an advisory accordingly.

The Police are well aware of who in the legal profession has threatened me in the past, but if you want to contact me on the subject, make a further comment marked "do not publish along with your contact information"

Anonymous said...

Getting threats Peter ?

If you need support you know who to call and there will be plenty there to back you I guarantee it !

the common sense approach said...

I would rather burn what I've got left than give it to a lawyer.Go for it Peter and I hope you force a few out of business !

Anonymous said...

Good idea Peter I am going in tomorrow to my lawyer to pick up my titles too.
I don't want to lose them or maybe the lawyer might do a fraud with my house ownership.

Thanks again and all the best you good person !

Anonymous said...

I am quite worried by what y ou write here Peter but I have taken your advice and dropped in a letter to my lawyer today telling him hes finished on my case.Now he will probably send me a big bill for doing nothing which I will send onto you for a look

Anonymous said...

On the strength of the example you gave I wont be doing any business soon with any lawyer.
I hope the person in the case you wrote about manages to get some justice out of what happened.

Thanks for the warning and I will tell my friends about it to do the same

Anonymous said...

Those are very worrying figures Peter.Where did you obtain them ?

Anonymous said...

I did as you suggested today and feel a lot better for it.I hope you get some justice one day Peter for the public service you do agianst these crooks.

K.Reid said...

Have taken your advice Mr Cherbi and did the same and transferred funds I had in a building society branch from my lawyers office to a bank.Feel much better now after reading your bit on Monday morning !

Good luck all the best.

Anonymous said...

Ah Mr Cherbi, your work cheers me up. Give those lawyers a psychological hiding, that is what I say.
I agree with the leaflet campaign etc you advised when you responded to my comment on the ratio analysis of the Guarantee Fund.
I am delighted to see your readers are pulling their money and documents out of their lawyers firms.
Even if there was twenty million pounds in the Law Societies Guarantee Fund VICTIMS OF CROOKED LAWYERS WOULD NOT SEE A PENNY OF IT. Respondents please warn everyone you know.
If some lawyers end up with unemployment benefits, that will be poetic justice. You lawyers remember, if the guarantee fund worked and the Law Society did not protect you crooks, people would be keeping their money IN YOUR LAW FIRMS.
Lawyers of all levels are the catalyst for what is happening here.

Anonymous said...

me too tomorrow and thanks for the advice !

Anonymous said...

Your warning is timely Peter Cherbi.I heard last week a solicitor is under investigation for cleaning out his client account and doing a runner - about 380k and not a word from the Law Society (either that or the press have been told to shut up again)

Anonymous said...

When I look at Mr Cherbi site and the crooked lawyers website it alarms me.
How can any member of the public, walk into a law firm asking for legal advice and trust a lawyer. What is more frightening is that people can be forced, through personal circumstances to go to a lawyer. My friends and colleagues at work need to know what is going on here. I was brought up to respect the courts etc but not any more.

Anonymous said...

I went into my solicitors office this morning and did just what you said Mr Cherbi although he tried to put me off when I asked for all my papers and my will.I told him to have everything ready for me by tomorrow and he said he would probably have to send me a bill which would have to be paid before he handed them over.I then told him I would be getting in touch with Peter Cherbi and he said I could get my files tomorrow as I wished.

Thanks for your advice and I hope your readers all do the same and tell their friends about this.

Good luck and best wishes to you !

Peter Cherbi said...

Thanks for all your comments on this article

The figures came from the Law Society itself, and are therefore an accurate accounting of the state of the Guarantee Fund, which as it stands offers no consumer protection whatsoever for clients loss of funds through dishonest solicitors.

# Anonymous @ 10.09pm

Thanks for the information. If you could post a further comment with more details or contact me with more on that story of the lawyer who took 380k from his client account ...

Anonymous said...

add me to the queue of thanks Mr Cherbi

you write very well !

Anonymous said...

Mr Cherbi,
The legal community will not blame themselves for clients removing their money, lawyers will blame you for telling us. They are so warped, they are responsible for what is happening.
The present system ensures the scales of justice, protect the lawyers. But make no mistake they are slowly tipping the other way.
One day people will take their grievances to court themselves, bypassing the lawyers who fight tooth and nail to maintain self regulation.
When people's access to justice is blocked by the very lawyers, who want to use the European Human Rights Legislation to protect self regulation, (preposterous) we must fight harder to ensure this monopoly is obliterated. WE WANT TO GO TO COURT REPRESENTING OURSELVES. A member of the public could never hand evidence which would damage a lawyer over to another lawyer. The file would go to the shredder.

Anonymous said...

You were right Peter and thanks,I got all my files from my solicitor yesterday and just going through them to see everything there.

He told me not to bother asking him to represent me again which is fine with me

Anonymous said...


Anonymous said...

Talk about Hypocrytes,
Scullion solicitors in Hamilton advertise their services to people charged with drink driving.
The Hamilton Advertiser recently had a photo of the pony tailed Nicholas Scullion being prosecuted at Hamilton Sheriff Court, for you have guessed it, drink driving. His son defended him but they brought in another sheriff to dispel any accusations of a conflict of interest. As Del Boy would say,
Lovely Jubbly.

Anonymous said...

+1 more here

I cancelled my will that named my solicitor as one of the executors (now a stupid move I realise) and told him to have my file ready for Friday to pick up since he hasnt done anything for me for years

Its a good time to take change of your own affairs as you point out very well.

Anonymous said...

Personally I believe we need people such as Mr Cherbi in politics to really represent the country rather than those we have to make do with - who are too interested in stuffing their pockets than doing their real jobs.

Keep up the good work Peter - your writing shows true belief for change.

Peter Cherbi said...

# Anonymous @ 10.01pm

No thanks ... I believe politics is far too dirty for me to be a part of .. I have no political aspirations whatsoever.

Just as with the professions who have been allowed to regulate themselves or dictate external regulation simply to continue their corruption, I believe the only way to clean up politics, as with the likes of the Law Society & Bankers, is to start again.

Anonymous said...

Good one about politicls Peter.You just went to the top of my chart on admiration for that comment!

Anonymous said...

It's Nicholas J Scullion (the daddy) with the pony tail. Good on the Hamilton Advertiser reporting this.
I noticed someone had this on your website Peter.
Scullion should he have got a taxi. Silly man, a top lawyer on the booze then driving. Typical of this profession.
Scullions solicitors website say there are loopholes in the law, clearly the top man cannot exploit the loopholes. Shame of you Nick.

Anonymous said...

I telephoned my solictor yesterday to ask for my file and he told me he had shredded it but would still be sending me a bill!

Is that legal ? I think he's a right bloody crook now I've read your blog.

Anonymous said...

Mr Cherbi, I see Scullion got prosecuted for drink driving. According to the SSDT website the following crooked lawyer is working at Scullion & Co.

MARTIN JOHN CAREY, formerly of Alexander & Martin, Solicitors, Falkirk and now of Scullion & Company, Solicitors, 5 Church Street, Hamilton.
Edinburgh 26th April 2006. The Tribunal having considered the Complaint dated 27th September 2005 at the instance of the Council of the Law Society of Scotland against Martin John Carey, formerly of Alexander & Martin, Solicitors, Falkirk and now of Scullion & Company, Solicitors, 5 Church Street, Hamilton; Repel the preliminary pleas of mora and personal bar; Find the Respondent guilty of Professional Misconduct in cumulo in respect of his unreasonable delay in recording or registering title deeds in favour of clients, his unreasonable delay in recording or registering standard securities in favour of lenders and his failure to act in accordance with the principles set forth in Article 5(e) of the Code of Conduct for Scottish Solicitors 2002 in that he did not communicate effectively with clients; Censure the Respondent.

I am sure the people of Hamilton would like to know about this, Crooked lawyer moving to an area people do not know about him. The Scullions work with a crooked lawyer.

Anonymous said...

Update, Scullion Solicitors are now at 105 Cadzow Street Hamilton.

Anonymous said...

This is for the person who poster their comment at 5.52PM.

You ask if this is legal, based on my own experience anything is legal if no lawyer will go against another lawyer. If your lawyer sends you a bill, go to another law firm and ask them to fight for you. You will suffer the same discrimination as the rest of us.

Imagine if the police stopped motorists who were drink driving. They find out the motorists are other officers. Do they charge them or let them go? I would hope they would charge them, and a top cop being caught speeding and reported on the news indicates they would charge an off duty officer caught behind the wheel intoxicated.

The Law Society do the opposite, you are a lawyer, a member of the club, we will cover it up. That is why in relation to lawyers victims, the legal profession cannot be trusted to pass judgement in an unbiased way.
My comment about the police and drink driving. An officer driving whilst intoxicated, could kill another officers, wife, child etc. Police please note I am not saying you would let an intoxicated officer off the hook if this could not happen. What I am saying is that a lawyer protecting a crooked colleague, cannot backfire on that lawyers family, in the same way as the drink drive scenario.
Drink driving is a dangerous offence that the police will stamp out as much as possible. They charged a Hamilton lawyer for this offence, who has now been prosecuted.
So I hope your lawyer does not send you a bill, but if he does I would not expect another lawyer to help you by writing to him.

Anonymous said...

You will all be happy to know Mr Cherbi's 'advisory' is causing a lot of problems for law firms from what a colleague tells me.

Good work Peter keep it up.

Anonymous said...

Reply to post at 9:45 PM

Wonderful, pull money out of law firms, let them sink into the abyss.
I have as much compassion for lawyers as Hitler had for his soldiers at Stalingrad when he said, "The sixth army will fight to the last man".
If I put the news on some night and hear some law firms have failed I will open a bottle of malt and celebrate. Clients please get your money out before it happens.

Anonymous said...

I found out yesterday my solicitor withdrew £3270 from my building society account to pay fees he claimed were due.
The last time he sent me an account was 2005,which I paid in full.He has done no work since for me.
What can I do about this Mr Cherbi ? I asked a Policeman about it today and he claimed he couldn't do anything and I had to go to the Law Society but from reading your website they are going to cover up what he did and I wont get my money back

Any advice gratefully received.If you can help me recover whats lost I will give you a fee for any time it costs you.

Kenneth MacDonald

Peter Cherbi said...

#Kenneth MacDonald @ 6.20pm

I take it you did not give permission for your lawyer to take the money, therefore it is a fraud and a criminal act at that.

You should insist on the Police investigating the matter but if you could send me some details which I will pass onto the press it might give some an added motivation to actually do something for you. Write another comment with your contact details.

I don't take rewards or fees, just make sure you get your money back, and make sure this crooked lawyer is locked up or at the very least publicly exposed so he cant do it to anyone else.

Anonymous said...

Well written advice Mr Cherbi.Clients should handle their own money but I've always found the vast majority of them too willing to trust anyone thus taking the responsibility away from their feeble brains.

Anonymous said...

your writing is really good..keep it up!