A Thanet solicitor has been struck off and ordered to pay costs of £70,000, while two others have been sanctioned and ordered to pay costs, following a Solicitors Disciplinary Tribunal hearing.
The hearing examined allegations against Edward Foster, formerly chief executive of County Solicitors, Robert Newman, who was the firm’s Compliance officer for legal practice and the Compliance Officer for Finance and Administration Rashpal Kaur.
The allegations related to County Solicitors and The Foster Partnership, both firms that had been run by Mr Foster, and improper transfers of client money, mortgage procedure breaches and accounting breaches.
County Solicitors traded between 2016 until the Solicitors Regulation Authority (SRA) shut it down in December 2019. The Foster Partnership Ltd, in Broadstairs, Ramsgate, Margate and Herne Bay, was shut down in October 2019 by the Council for Licensed Conveyancers, citing breaches of its code of conduct.
Some 23 former staff for The Foster Partnership claimed a total of £523,000 for unfair dismissal in breach of contract, failure to comply with redundancy procedures and unauthorised deductions from wages. This included £13,010.36 to Mr Foster; £31,273.29 to Mr Newman and £53,032.06 to Ms Kaur.
The first allegation levelled against Mr Foster was that during the latter months of 2018 he allowed just under £385,000 of improper transfers from the firm’s client account.
The tribunal heard that transfers from clients to the office bank account had been made before bills were even raised and client ledgers could not be produced for the transactions because instructions were given either orally or by emails that were then deleted.
Accounting staff member Sandy Carter had been instructed by Mr Foster not to inform the other directors of the transfers.
Tribunal judgement papers say: “It was alleged that Mr Foster used client monies to overcome cashflow difficulties involved in running the Firm’s business. In certain instances, monies transferred from the client account were used to discharge a debt.
“The transfers were made at times when the Firm’s account had insufficient funds to make the payment and the transfer of client monies allowed for the payment to be made. Client monies were being used by Mr Foster to ensure that the Firm was able to discharge its ongoing liabilities without the agreement of the clients and in circumstances where he knew, but the relevant clients did not, that the transfers were being made.
“In addition, client monies were also allegedly used to repay monies purportedly due to Mr Foster but not in fact paid by him into the Firm’s accounts.”
Mr Foster declined to give an explanation and the Tribunal found proved breaches of five Principles and an aggravating allegation of dishonesty. Mr Foster had admitted the breaches but denied the allegation of dishonesty.
The SDT heard a second allegation that between 8 July 2017 and 19 December 2018, Mr Foster and Mr Newman “caused and/or allowed the firm, contrary to its clients’ instructions, to:
- Receive approximately £2,333,838.00 into its client account from mortgage lenders and thereafter pay out those sums to a third party;
- Failed to inform its clients that those sums were being so paid out;
- Failed to maintain client ledgers in respect of those sums;
- Failed to maintain client files in respect of those matters;
- Submitted certificates of title to lender clients, which had been signed by individuals who were not authorised to do so.
The £23m of mortgage advances related to 129 transactions with the hearing focusing on nine exemplified transactions of £2.3m involving both County Solicitors and The Foster Partnership in procedures which ‘blurred the lines.’
In an email Mr Foster denied dishonesty in regards to the mortgage allegation saying it was due to “error/incompetence” on Mr Newman’s part.
Mr Newman said it was Mr Foster who had proposed the arrangements which Mr Newman had endeavoured to implement. His evidence was that this was always intended to be a temporary arrangement, for a few months, but he accepted that it had continued longer than that. Mr Foster was a solicitor, and it was submitted on Mr Newman’s behalf that he was entitled to trust him and that he did so.
Mr Newman said “he had made embarrassing mistakes” but had not set out to deceive.
The tribunal found the allegation against Mr Foster proved, saying: “Given the degree of control over the finances and operation of the Firm and The Foster Partnership, the Tribunal did not find it credible that such a practise had evolved without Mr Foster’s knowledge and without him allowing it.”
The tribunal found Mr Newman had breached principles but was not guilty of the dishonesty allegation and had been unaware of the signing of title certificates by individuals outside the Firm who were not authorised to do so.
A third allegation was that Mr Foster and Rashpal Kaur breached accounts rules when:
- Between April 2018 and February 2019 the firm failed to complete client account reconciliations every five weeks.
- Between approximately November 2016 to March 2019 caused and/or permitted the Firm’s suspense ledger to be used in breach of Accounts Rules.
- Between 1 June 2018 and 31 December 2018 caused and/or permitted the Firm’s client account to be used as a banking facility involving approximately £2,333,838.00
It was alleged that Ms Kaur did not perform her role as COFA as expected and required. She was alleged to have simply taken what was presented to her without going beyond it to determine its accuracy – relying on the cover sheet produced.
Ms Kaur explained in interview that the Firm’s directors did not have the power or ability to authorise financial transactions, nor did she have access to financial information that a COFA ought to have. On becoming managing partner following Mr Foster’s resignation, she put in place policies and procedures to ensure bills were posted correctly, ledgers were properly maintained, and the Firm kept proper records.
The Tribunal found proved that Mr Foster had breached principles. For Ms Kaur the Tribunal found she had not done enough to discharge the obligations of being the Firm’s COFA. She had failed to take sufficient reasonable steps to seek to satisfy herself that the Accounts Rules were being complied with and had failed to protect clients’ money, resulting in a breach of principles albeit in “difficult circumstances.”
The Tribunal found all allegations proved against Mr Foster, who did not attend the hearing, instead sending an email in advance.
It found that Mr Newman’s conduct had breached the requirement to act with integrity but an aggravating allegation of dishonesty was found not proved. Mr Newman had no knowledge that unauthorised individuals were signing certificates of title which was the focus of that allegation.
Ms Kaur was found to have breached Principles but there were no allegations that her conduct had lacked integrity or was dishonest.
Mr Foster has been struck off the Roll of Solicitors and ordered to pay £70,000 costs.
Mr Newman was suspended for three months and ordered to pay £15,000 costs
Ms Kaur was fined £7,500, reduced to £3,000 in view of her current means, and 3,000 costs.
Neither Mr Newman nor Ms Kaur had any previous Tribunal findings against them.
In 2012 the Tribunal had imposed a £20,000 fine on Mr Foster for breaches including allowing his firm’s client account to be used to provide banking facilities and withdrawing money from client account,
Tribunal judgement papers say at the time of the hearing last October Mr Foster, who was admitted to the Roll of Solicitors in August 1997, was engaged by his own company, eLawyer Services Limited, an unregulated legal services company undertaking non-reserved legal activities.
He’ll get a job at manston !
Or at the council
My wife was left £10,000 in a will from a lady who my wife had cleaned for, for 21 years, 2 years after the lady had died we were on holiday In Cornwall when we bumped into the lady who died daughter. She asked my wife “did you buy another from mums money” My wife knew nothing about being left money in any will.
When we arrived back from holiday we went to the solicitor who had been the executive of the will we were told he was away.
Later that day a cheque for £10,000 was delivered by hand to my wife the solicitor said it was “ an oversight” two days later he sent £1000 compensation for the “oversight” had we not spoken to the deceased lady’s daughter my wife would have been none the wiser.
There seems to be a bit of a Thanet Theme here.
Mr F, ex solicitor, struck off for embezzling clients’ funds …
Oh dear. Dodgy, dodgy, dodgy.
This wouldn’t be the same Edward Foster who is currently trading from a premises in Broadstairs high street as a “lawyer” ?
It could well be.
Oh Yes, and unregulated
In my personal experience of solicitors-accountants-bank managers. I’ve had to always be on my guard of checking the small print and not trusting their advice. I have very good reason to be of that opinion. Obviously like all professions there are good and bad.
Must be something in the air down here! Bent solicitors, dodgy council officers, corrupt councillors, strange planning applications – the list is endless. Oh dear!
You forgot dodgy MP, Craig is the definition of a wheeler dealer, in it for his own investment, Jack the lad.
Keith it’s not just down here it’s everywhere especially in Parliament. Is like a big stone hitting the pond water it just ripples out.
Having lived in different parts of UK, have noticed “things” are done different in our lovely isle, actually very different !
Not commenting on the solicitor case but i have noticed many people breaking many laws Some more serious that others.
The law breakers have been getting away with it for for such a long time they consider those that stick to all the laws to be wrong uns.
Good company for a Mr Tony Freudman, purveyor of unicorn dreams and electric barges. All those who think that RSP is the harbinger of good things for Thanet should closely examine the records of those who charm them with their silver tongues.
You have been warned.
Ramsgate Lover, you would say that because really you are a Ramsgate hater, one who likes to see businesses closing down high unemployment no port no airport no nothing in fact just you in you own little world.
I normally can’t be bothered to respond to rubbish, but your’s takes the biscuit. Without this whole unreal airport saga the site could have been developed into a high-tech green industry hub generating large numbers of skilled jobs, a regional centre of excellence, and supported the essential move to net zero. Instead we’ve had 7 years and counting of nothing, with more nothing to come, trying to build a misty-eyed, nostalgic, unwanted, un-needed cargo hub that will destroy our environment, our tourist industry and the planet. Most people have realised this. Those that haven’t will find out that, just like Brexit, Manston airport is a bunch of lies that will impoverish Thanet.
He will be tony freudman number 2 as both now have the same thing on their CV’s
I think it’s more to do with both being struck off solicitors
Ramsgate lover, Brexit was the biggest fraudulent act. The UK has ever known climate change and so-called net zero. Is the biggest fraudulent act in the world could see carried out by delusional people, promising utopia and ultra clean air. If the net zero mob have their humans will not even be able to pass wind only yesterday evening on the TV. A birdwatcher was complaining that “ birds do not migrate to the UK now because of the effects on climate change”, he said they don’t have to do it now it’s warmer where they are. Presumably that guy is happy for the poor birds, to fly thousands of miles from one part of the world, to another part just so he can look through who his binoculars and watch them trying to find food, delusional misguided misinformed received people.
Hahahahahahaha (pause for breath) hahaha ha. Thanks William, made my day.