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

Your 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.

My 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.

Truth & reconciliation must be applied to financial crisis, otherwise ‘better regulation’ plans will fail & public anger against bankers will remain

Sir Fred Goodwin ‘shaken’ after hearing of attack on his home. Yesterday's attack on the home of former Royal Bank of Scotland Chief Executive Sir Fred Goodwin has generally been accepted by the media, politicians & public as being a result of Sir Fred’s part in the collapse of the RBS.There is of course, no justification for vigilante attacks against the man’s home & family, no matter how strongly people may feel over his actions at the RBS.

Reports of Sir Fred Goodwin’s home attacked by vandals :

While such attacks are fortunately few and far between, the fact is that the widely reported 'lack of public remorse' by Sir Fred, and many other bankers for their actions which have led to the global financial meltdown, has triggered a demand by many for 'heads to roll' over the banking failures.It may be said, such demands for people to be held to account for their actions, are, reasonable.

However, attacks against individual figures, can and often will be used to stymie the demands & needs of regulatory reform, as we have seen before in Scotland, as was demonstrated with the now slightly forgotten but much more serious attack on another financial professional, the Law Society of Scotland's Chief Accountant, Leslie Cumming, which occurred in Edinburgh in January 2006.

Accounting Chief Leslie Cumming was attacked in a mafia style hit arranged from within the legal profession.

Media reports on Cumming attack were used by lawyers against reforms. Various theories are still being considered for the attack on Mr Cumming, ranging from a revenge attack organised by crooked lawyers over Mr Cumming's investigations of their accounts, to disgruntled clients who lost millions at the hands of crooked lawyers, to even a prospect the attack was carried out by other members of the Law Society intent on giving the profession a sympathetic image in the wake of serious legal reforms to its regulatory structure which the Law Society bitterly fought in Parliament during the latter half of 2006.

Law Society may have caused the attack itself. However it may well be that Mr Cumming, regrettably paid the price for his Law Society colleague's well known policy of bitter attrition towards people who dared make a complaint to the Society against their lawyer, and the general culture of a lack of accountability within the legal profession as a whole, which in turn led to feelings of bitterness on both sides.

Philip Yelland, Law Society Director of Standards. In the case of the Law Society particularly, the glaringly obvious lack of ability by senior officials such as Douglas Mill, Philip Yelland and many others to even 'say sorry' or repair the financial damage their colleagues did to ordinary people, led to many cases of intense hardship, where even in one known case, a client committed suicide over the Law Society’s attempts to thwart consideration of the actions of a crooked lawyer.

Law Chief Douglas Mill blamed campaigners for attack on colleague but it turned out to be lawyers. So bitter were the feelings by some at the Law Society of Scotland, the then Chief Executive, Douglas Mill, held private briefings with journalists and attempted to blame campaigners for the attack on his colleague, however it soon became clear to many in the following days the attack on Mr Cumming came from within the legal profession itself, and Douglas Mill had little more to offer on the subject, which even to this day has seen not one arrest in connection with the Cumming attack.

2006, the year of the attack on Mr Cumming, was a very bad year for the Law Society of Scotland, one could argue, as bad a year as 2008-9 has been & will be for the Royal Bank of Scotland, and indeed many other financial institutions.

The Law Society in 2006 was to be subject to the same outside scrutiny and independent investigations & public inquiries on the weakness & corruption of its regulation of crooked lawyers which will now have to be implemented on the RBS and the financial sector, where the same weak, closed ranks, soft touch regulation has ended up producing the spectacular financial failures on a global scale, that the same weak, closed ranks, soft touch regulation has produced in the legal sector on a client by client basis for decades.

SLCC – now a rubber stamp for crooked lawyers. The Law Society fought the outside scrutiny and newly created legislation to bring independent regulation of complaints, and simply co-opted the new body with its own members to ensure that even after all the effort of campaigners, ruined victims, and the Scottish Parliament, the new Scottish Legal Complaints Commission simply ended up as another rubber stamp for crooked lawyers.

The banks, now faced with the same calls for more regulation, inquiries, investigations and the same campaigns by consumers against financial wrongdoings, will do the same as the Law Society did in 2006. We will end up with possibly, a new regulator to replace the Financial Services Authority after a year maybe, and then the regulator will end up being co-opted in the same way the FSA seems to have been so co-opted by the financial profession which led to its negligence in allowing the banks to do as they have done, and, collapse.

Law Society’s Michael Clancy killed off Holyrood attempt to heal ruined clients of crooked lawyers. It doesn't take much to say "sorry", and do the right thing .. however, saying "sorry" and doing the right thing, doesn't seem to be a basic capability of anyone in charge of a bank or a legal firm or indeed a regulator supposedly put in place to ensure that failure & corruption doesn't take place. Too much money. too much political influence, and soft touch, corrupt, regulation, has led to at attitude of omnipotence where these people and their organisations feel above accountability.

That culture of unaccountability must be ended for all professions, particularly those in the legal and banking worlds, if we are to repair the sins of the past and heal the wounds of ordinary people, and our economy, which have been caused by far too much unchecked greed & ambition by a few who control the many … Truth & Reconciliation is now a much needed medicine.

Royal Bank failure blamed on lack of regulation by ex Law Society Boss who campaigned against stronger regulation of solicitors

The Royal Bank of Scotland's failure, which has led to the bank effectively being nationalised by the UK Government to save it, and save its customers, was nothing to do with either Sir Fred Goodwin or the Bank's 'takeover too far' of the Dutch Bank ABN Amro, so says Douglas Mill, former Law Society Chief Executive and school friend of Sir Fred Goodwin.

Douglas Mill - it wasn't the Bank or Sir Fred’s fault, it was the lack of governance & control !

Douglas Mill, said in a BBC Scotland interview, which highlighted the alleged failures of Sir Fred Goodwin, whom some newspapers have dubbed "The World's worst banker" :"Well scapegoating is the right expression.".

Douglas Mill would know all about scapegoating, and how to avoid it, as he did for around eleven years as Chief Executive of the Law Society of Scotland, who interfered & intervened in just about any case involving crooked lawyers which had the possibility to bring changes to the way solicitors were regulated by the Law Society.

Douglas Mill, staggeringly went on in the interview to blame the Royal Bank of Scotland's huge losses & failures on the financial markets on poor regulation of the Banking sector !

Douglas Mill went on in usual form : "The real failures here are failures of financial services regulation and that extends beyond the Royal Bank.

The real failures here are failures of lack of governance and lack of control in the whole banking sector not just the Royal Bank again its easy to be wise after the event but scapegoating Fred isn't going to address the problems here."

An amazing outburst indeed, from Mr Mill, who tirelessly campaigned against any strengthening of regulation against the legal sector in Scotland, and whose aims to prevent consumers being protected by increased safeguards & independent regulation of Scottish legal services are still being carried out today by the present Justice Secretary, Kenny MacAskill, who himself said on video in the past, he would also protect lawyers from anything or anyone …

You can read an earlier article on how Mr MacAskill carries on Douglas Mill's 'traditions' of protecting the worst elements of Scotland's legal profession here : Justice Secretary rejects independent regulation of lawyers and public right of choice in legal services market

Indeed, it was, as you will all recall, Douglas Mill who infamously once threatened the Scottish Parliament and the previous Scottish Government with legal action if legislation was passed in the Scottish Parliament to protect consumers and strengthen regulation against Scottish solicitors.

Douglas Mill threatens to sue Parliament & Govt : ‘Holyrood in Solicitors’ sights by Ian Fraser

I wrote about Douglas Mill’s court challenge threat to Parliament here : Law Society of Scotland threatens Court challenge against Scottish Executive over LPLA legal reform Bill

We must also not forget this is the same Douglas Mill who famously scrapped with John Swinney, the Cabinet Secretary for Finance, in front of Holyrood's Justice 2 Committee, where Mr Swinney, then in opposition, exposed the secret memos of Mill himself which eventually led to the end of Mill's career at the Law Society after the video coverage of the event was posted to You Tube.

You can read more about the Holyrood confrontation between Douglas Mill & John Swinney here : Law Society boss Mill lied to Swinney, Parliament as secret memos reveal policy of intervention & obstruction on claims, complaints.

In the memos, it was revealed by John Swinney that Douglas Mill had been, and was still engaged in a bitter & protracted campaign against some of Mr Swinney's constituents to prevent them from obtaining access to legal services and financial settlements in long running claims against several of Scotland leading legal firms, which Mr Mill, and the Law Society's insurers Marsh UK, intended to delay and destroy at any cost.

It is worth noting that every single claim and complaint against 'crooked lawyers' which the now discredited ex-Law Society Chief Douglas Mill personally intervened in, ultimately failed to be resolved, and the particular case which Mr Swinney raised before the Justice 2 Committee along with Mill's own memos, also remains unresolved and without settlement.

Career ending video : Douglas Mill contradicts his own secret memos released by John Swinney during Justice Committee investigation

You may all be wondering why someone such as Douglas Mill may blame a lack of regulation of the banking sector as the cause of its catastrophic failure ?

Well, wonder no longer, as the banking sector, such as it used to be, went hand in hand with the legal sector, gaining billions of pounds of business & finance in Scotland from solicitors who themselves used clients funds and a myriad of other less than open financial deals with the banks, using clients money to gain personal finance deals and deals for their legal firms on spectacularly low interest rates which ordinary consumers had to prop up through exhorbitant costs of poor legal services and thousands of cases of lost clients funds each year which the Law Society under Douglas Mill did nothing about.

Interestingly, the same failures of regulation which Douglas Mill claims let down his friend, Sir Fred Goodwin, were the same kinds of regulation Mill actually fought against being implemented on the Law Society of Scotland, such as in the case where Douglas Mill claimed in an interview with Business Journalist Ian Fraser, that the Financial Services Authority would not allow any independent oversight of such things as the infamously corrupt Indemnity Insurance arrangements for Scottish solicitors known as the "Master Policy" which has led to some of the worst cases of corruption involving insurance in Scotland for decades.

It turned out the FSA were quite happy there would be independent regulation of the Master Policy, and I wrote some more about that issue here : Chief Executive of the Law Society of Scotland branded a liar after FSA denies claims of intervention to block complaints body.

You can read more about the Master Policy and how Douglas Mill as Chief Executive of the Law Society and his staff at ‘Client Relations’ implemented his 'policy for protection' of solicitors against claims & complaints here : The Corrupt Link Revealed - How the Law Society of Scotland manages client complaints & settlements.

More can be read about the Master Policy HERE

Perhaps what we learn from this story is that the banking world and legal world do tend to go hand in hand, when it comes to business, and scandals …. so both worlds need a fairly strong dose of independent regulation with effective policing of their activities, rather than the hands off approach which Mill and his kind have preferred over the years.

Mr MacAskill – adjust your policies accordingly, or step aside for someone who can protect the public, rather than simply protect the professions …