Thursday, March 19, 2009

Law Society's 'Guarantee Fund' for clients of crooked lawyers revealed as multi million pound masterpiece of claims dodging corruption

Law Society of ScotlandRevelations from the Law Society’s briefing to the Scottish Legal Complaints Commission on claims against crooked lawyers, show that the"Guarantee Fund" - a compensation fund which the legal profession's regulator maintains to 'compensate clients' who are ripped off by their lawyers, is actually little more than a masterpiece of claims dodging corruption, where money paid in annually from each solicitor is held by the profession's regulator and used for anything other than actually compensating the victims of crooked lawyers who swindle their clients.

0004 Documents show money pouring into Law Society which never returns to clients. Staggering figures from documents obtained from the SLCC show that claims against the Guarantee Fund have leapt by millions of pounds in the past year to £4.3 million and are expected to go much higher as the rising tide of fraud committed by lawyers against their clients hits spectacular proportions. "Claims received or earlier claims assigned a value in the current year totalled £4,286,000 (2005/6 £35,000). As a result of this dramatic increase and stock market volatility, the Fund's investments were realised and the decision taken to increase the 2007/8 subscriptions. Depending on the eventual level of settlements, additional subscriptions may be required in the future."

A senior legal figure I spoke to this morning wasn't surprised by the figures.

He said "The current poor financial climate does not bode well for honesty in any profession, and sadly we will see a lot more claims to the Guarantee Fund and probably the Master Policy from clients who suffer at the hands of the fraudulent element of the profession"

He went on : "I feel the situation on client fraud has spun out of control and the Law Society simply do not know how to control it, other than continue to plug holes in the wall to keep the situation quiet, otherwise clients may begin to panic over the security of their funds held by solicitors offices across Scotland."

The Guarantee Fund and Master Policy are both reportedly going to be subject to huge increases in compensation claims due to incidents such as the rising levels of mortgage fraud claims, where an ever increasing number of solicitors in Scotland are facing criminal charges or already have appeared quietly in court.

Recently, Richard Keen QC, the Dean of the Faculty of Advocates, broke ranks with the Law Society and admitted there would be soaring claims against crooked lawyers this year and in years to come. I reported the story in an earlier article here : Dean of faculty hints at rising fraud claims against solicitors as 'Penman Levy' bites hard into Scots law firms

The Law Society now admits that (for the last recorded year figures available : "The total of claims intimated but not admitted at 30 October 2007 is £3,777,000, representing 42 separate claims made against 13 firms. This sum can be reduced by £771,000 on the basis of "stop loss" insurance cover in place (compared to £850,000, 42 claims, 13 firms in 2005/6). There is accordingly a need to build reserves to meet claims.

While the staggering rises in claims against solicitors indicate a huge level of ever increasing fraud by solicitors against their clients, the Law Society controlled "Guarantee Fund" has been busy trying to kill off as many claims to the fund, to preserve the amounts of money remaining in the fund,

One client who has lodged a claim to the Guarantee Fund spoke to me this morning, calling the Law Society run compensation scheme as “something like a giant slush fund of dirty money that drug barons might keep to launder their ill gotten gains”.

Various tactics have been employed by the Law Society and legal firms in attempts to square off against client who make financial claims to the Guarantee fund.

In one seedy case, where a solicitor had stolen money from clients accounts to pay for an extension to his own home and a new car for his wife, the Law Society were reported to have engaged a firm of Private Detectives based in Edinburgh to spy on the crooked lawyer's client, in an attempt to find out compromising information on the client and his family which could be used to barter for the claim to the Guarantee Fund to be dismissed.

A retired accountant, who looked at the Guarantee Fund papers said "There appears to be a lot of money going into it, but not much coming out. I would have to suspect there is a great deal of money simply sloshing around which could be used for anything. It doesn't seem to be much of a protection scheme for solicitors clients.".

He went on : "If I had handed money over to my solicitor recently for some kind of transaction like a house purchase or sale, an investment, or even dealing with a deceased's estate, I think its fair to say I may have significant cause to worry about the security of the funds."

"In the present financial climate, I would advise clients who have concerns about their solicitor holding onto their money or having control of it, to immediately take steps to transfer their funds to a more secure location, because there are little or no guarantees in this "Guarantee Fund" the Law Society claims will protect clients."

The Guarantee Fund as it currently stands is not monitored by any external organisation, although the Scottish Legal Complaints Commission has said it will fulfil its monitoring role within the commission's first year of operation.

MacAskill must clean up SLCCSLCC members jibes against consumers. However, recent verbal spats between the SLCC's board members over the way in which the commission will monitor the Guarantee Fund, along with bitter rants by officials against claimants to the fund, where one commission member, lawyer Margaret Scanlan dubbed claimants as “chancers”, indicate the SLCC has a long way to go in developing any reliable method of monitoring the claims made against crooked lawyers by financially ruined clients.

Jane IrvineLegal Complaints Chief Jane Irvine. Staggeringly, it also turns out the SLCC has not even began its role of monitoring the Master Policy, let alone keeping an eye on the Guarantee Fund. Jane Irvine, the SLCC’s Chairman was asked about the commission’s role in monitoring the Master Policy and asked whether the SLCC had actually asked for a copy of the Master Policy which they are supposed to be monitoring. Irvine however said the SLCC had still not requested sight of the actual Master Policy but “were doing the research”.

Researching an insurance scheme they haven’t even asked for sight of the actual insurance policy …now that’s a new one ! Who is pulling the wool over whose eyes there ?


Anonymous said...

lawyers are robbing c*nts just like the banks
when will they be asking us to bail them out too ?

Anonymous said...

In essence what you are saying is dont give your money to your lawyer to look after which is probably sound advice after what happened to the banks.
If lawyers fail going by the figures you are quoting people are going to be taking 100% losses on any money their lawyer is holding for them.
Raw deal !

Anonymous said...

I want to do some research into something but I better not ask what the something is about.Jane hasn't changed one bit as I said yesterday.

Anonymous said...

It sounds like a protection racket ! lawyers are paying into this and the Law Society covers there arses when they start stealing
The only catch is that after the stealing no one gets their money back

Anonymous said...

The slcc and the law Society are as corrupt as each other.

Anonymous said...

In response to Peter Cherbi's excellent revelations on bent lawyers Justice Midget and SNP star Kenny MacBuckfast announced his replacements for the chancers already snouting their snounts on the slccc's trough.

They were :
Adolf Hitler as Chairman
board members to be Pablo Escobar,Josef Stalin,
Mao Tse Tung,
Kaizer Wilhelm,
Idi Amin,
and Saddam Hussein.

secretary of the committee is to be Phol Pot with drinks provided by MacBuckfast beverages Ltd.

No justice is good justice for Kenny !

enraged ! said...

why is none of this any surprise to me ? its because the bastard politicians let the lawyers get away with regulating themselves just like the fsa and the banks

Anonymous said...

Thanks for the info on this.We have been trying to sell our house for a year with a lawyer but as of last Monday we sacked him when we found out he had put in a bid 40 thousand less than the asking price in the name of his daughter.I called the Law Society and they basically told us to fuck off and will get around to calling this slcc mob but I suppose nothing will be done.No one should trust a lawyer ever they are all crooks

Anonymous said...

I begin to understand why Mr. Mill was loathe to leave his position overseeing the Guarantee Fund - ensuring no doubt that the money went to a good cause each and every year.

Of course we are not allowed to know where the money went - the Law Society of Scotland and the Faculty of Advocates are among the very few 'regulatory' bodies which are curiously not required to conform with the terms of the Freedom of Information Act.

Luckily for Mr Mill his friends at Glasgow Uni ensured he had a soft landing and another cushy (£80k per annum) billet, entrusting him to instruct impressionable young minds on the law, ethics etc etc.....

Anonymous said...

I know of a guarantee fund claim which has been going on for 5 years and still not settled.Mr Yelland seems to know plenty about it so you better ask him for some comment.

Anonymous said...

LOL the 6th comment !!!!

and you know what ? they are all members of the SNP!

Anonymous said...

Interesting point of view Peter.I dont rate the Guarantee fund very much from what I've heard from colleagues.
Maybe someone should start asking where all the money goes as some of your followers are suggesting.

over & out !

Anonymous said...

I don't think the Law Society has ever properly compensated one single victim of a dodgy lawyer from this fund.There have always been arguments about how much was lost and what the solicitor took to the point it was usually the solicitor's accounts which payouts were based (and most of the accounts of crooked lawyers are as Peter would say 'fiddled' anyway)

Its a lose lose situation for clients everytime a lawyer rips them off.

Anonymous said...

agreed - the thing sounds like a big con on anyone using a lawyer
better not use a lawyer then ! at least not in scotland !

Anonymous said...

Sound advice Peter.I used to work at a law firm in Glasgow and the way they handled clients affairs I would never trust them with my own money.

Keep up the good work and make the Law Society squirm a bit from me too !

Anonymous said...

Jane Irvine obviously doesn't want to ask for the Master Policy or the Law Society have told her she wont get it even if they want it.

"Thick as thieves" is the expression which comes to mind about the slcc.

Anonymous said...

Very revealing piece and I will be calling round to my solicitors office on Monday morning to end all my business with him.
Good to see there are people like you who have the guts to stand up to these crooks

Anonymous said...

This fund how do you make a claim against it ? I called the Law Society today to ask and they put the phone down on me !

Anonymous said...

last comment at 825 - you get ripped off by a lawyer then ask about how to claim and then the law society rips you off too !

Anonymous said...

I want to know how I get my ssiter, brother and their people out the the trust and as trustees. I never allowed them to be trustees in the first place. also allen has to go. I pray for help...carrie

Anonymous said...

how do I get god to help me remove my family as trustess? carrie

Anonymous said...

Very interesting blog Mr Cherbi and full marks for having the bravery to stand up to the lawyers.

I think most of this should go into the newspapers so people are forewarned about what lawyers really do to their clients.

Good luck and keep up the writing.

Anonymous said...


The reason why no money gets paid out of the Law Society's Guarantee Fund(according to their own figures): 3% of total GF claims are paid out of GF Fund.

97% of GF claims either get refused by Law Society or paid via other sources.

Margaret Scanlon's reference to the Law Society 'stripping the carcass of the solicitor first', involves:

1)refusing valid client claims against the GF.

2)taking the above money (stipping the solicitor carcass) and using this 'clients money' to pay out to the very few successful claimants.

3) This saves the GF from being dipped into, as the GF is 'solicitors money' i.e funded by annual payments out of solicitors own pockets-.

Eg If there are 100 valid client claims, where the crooked solicitor concerned has been caught out.

The Law Society force the client to prove that the solicitor has not defrauded them/over charged them etc etc, whilst the Law Society retain all of the crooked solicitors paperwork under confidentiality.

The solicitors client is forced to 'trust the word of the Law Society'.

It is therefore usually impossible for the client to prove their case and get their own money back and there is little any client can do to force the Law Society to release information they need to get their money back as the Law Society are a classed as a private organisation.

Thus there is nothing to prevent the Law Society from committing fraud against their member solicitors clients with impunity.


Anonymous said...

is it not strange that the police don't seem to be investigating the Law Society for fraud...

Anonymous said...

Are the Law Society of Scotland above the Law?....

Anonymous said...

claims to this will go thu the roof and they will end up asking broon to bail them oot !