SDT: Evidence did not establish arrangement was a scam
The marketing chief of a failed Manchester law firm who successfully appealed against an order banning him from working for the profession, has been cleared of all charges by a fresh tribunal.
Francisco Xavier Rodriguez-Purcet was head of marketing and business development at Tandem Law, a firm that took money from the scandal-hit Axiom Legal Financing Fund.
He was banned from working in the profession last year after the Solicitors Disciplinary Tribunal found that he accepted “kick-backs” from fees paid with Axiom money.
It said Mr Rodriguez-Purcet used Axiom money to pay client sign-up business Legal Appointments Limited (LAL), a company owned by a friend of his.
Over a 10-month period, Tandem paid LAL £281,000, but the tribunal said the evidence showed that there was an “excess” amount of nearly 50% with each payment that was split between Mr Rodriguez-Purcet and Tandem owner Andrew Lindsay.
Mr Rodriguez-Purcet said the payments were in return for services and that Mr Lindsay had approved them. Mr Lindsay has been struck off and his appeal dismissed by the High Court.
The SDT also found that Mr Rodriguez-Purcet was a director of two companies which he arranged to receive details of Tandem’s clients so they could be cold-called about remortgage services.
However, Mr Justice Holman ruled in October last year that the SDT should have adjourned the hearing for medical reasons.
Mr Rodriguez-Purcet suffers from bipolar disorder. He did not attend and was not represented at the SDT hearing but provided evidence from a doctor that attending might trigger a relapse in his mental illness.
The fresh tribunal – which said the background of the Axiom fund was “essentially irrelevant” to the case – heard that he did not initially have a salary and Mr Lindsay always had “the final word” on every business decision.
The Solicitors Regulation Authority submitted that participating in such a scheme was a breach of Mr Rodriguez-Purcet’s duties to act in Tandem’s best interests, by diminishing its ability to repay the Axiom loans
He acknowledged that a profit was made on the work, but said this was “to be expected”.
The SDT accepted his evidence that other third-party contractors levied higher charges for sign-up services than LAL, and “there was clear commercial value” in Tandem only having to pay for those potential clients signed up, whereas other providers charged simply for making the appointments.
The tribunal said there “may be an argument” that the price charged by LAL “should have been lower” given the proportion of profit shared.
But it continued: “The payment to the respondent’s and Mr AL’s personal account was unusual and potentially inadvisable, however, in itself considering the payments were made in a transparent way, the tribunal was not satisfied to the requisite standard that this was inevitably improper or corrupt or indicative of any scam.”
The SDT said Mr Rodriguez-Purcet “had not negotiated the Axiom deal” and was entitled as head of marketing and business development to “rely on his superiors”.
It concluded that the evidence did not support the allegation that the payments were corrupt or improper.
The SDT said Mr Rodriguez-Purcet was responsible for the idea for the idea of combining cross-selling remortgages with a case update for Tandem clients, and he had received “favourable responses” from the management team.
“The respondent’s evidence was that arrangements of the type with which the allegation was concerned was common.”
The SDT said “no compelling evidence” had been presented about the extent or absence of opt-ins to marketing approaches, so it could not be sure that Tandem’s use of client information was improper.
Given that Tandem’s COLP had told Mr Rodriguez-Purcet that she would draft the proposed outsourcing agreement for the scheme, he could not be regarded as reckless.
The allegation that Mr Rodriguez-Purcet had passed information to third parties without client consent and been reckless was rejected.
The tribunal said it was right that he should contribute to the costs of the case because it was “properly brought”.
However, it slashed an application for £86,000 in costs from the Solicitors Regulation Authority to £5,000 (or 20% of the amount the tribunal considered reasonable for the proceedings), plus £3,800 for the costs of two case management hearings.
It said the prosecution had spent too much time detailing the Axiom scheme and had not needed to instruct a QC given the nature of the allegations.
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