Cheque: Solicitor wanted to leave with clear conscience
A solicitor who enclosed a cheque for £147,500 with his resignation letter, so he could leave a national law firm with a “clear conscience”, has been struck off.
Glenn Charles Hurstfield, equity partner at Berkeley Law in London before its acquisition by Irwin Mitchell in 2014, admitted acting dishonestly by producing an amended and backdated version of what was originally an irrevocable declaration of trust, making it recovable.
Mr Hurstfield also admitted as a trustee authorising two loans of £40,000 to a charity, of which he was director, without the consent of his co-trustee or any documentation, and transferring £112,000 from a client account to his personal bank account “for a purported loan repayment”, again without any documentation.
The Solicitors Regulation Authority (SRA) said, in an agreed outcome with Mr Hurstfield approved by the Solicitors Disciplinary Tribunal (SDT), that the solicitor, admitted in 1984, was owner from 2010 of 25% of the shares in Berkeley Law, which specialised in estate and tax planning for wealthy individuals.
Irwin Mitchell acquired Berkeley Law in November 2014. Mr Hurstfield was suspended following internal audits in September 2018.
Refusing to attend a meeting to discuss his employer’s concerns about his conduct, he resigned later that month, enclosing a cheque for £147,500 made out to Irwin Mitchell with his resignation letter.
In the letter, he said the cheque was intended to ensure that there was “absolutely no financial loss” to clients or Irwin Mitchell, so he could leave “with a clear conscience that nobody is out of pocket”. The sum included interest at 3%.
Irwin Mitchell instructed City firm Herbert Smith Freehills to investigate the issues raised by its internal audits and, once this was over, the SRA launched its own investigation.
The SRA said that, while acting for Client A and his wife, Mr Hurstfield drew up an irrevocable declaration of trust in 2012, stating that they held the equitable interest in a property on trust for their son.
Client A and his wife later became concerned that their son might leave a share of the property to someone else in his will. Mr Hurstfield responded by sending them a “replacement” declaration of trust, backdated to the same date as the original, the only change being that the word ‘irrevocably’ was changed to ‘revocably’.
Mr Hurstfield admitted acting dishonestly in doing this. The SRA said he knew that the second version “could not replace the original declaration (and had no real legal value)” but failed to tell the clients.
Along with the allegations relating to unauthorised loans from trusts of which he was a trustee, the sum of £112,000 was transferred from a charity client’s account in 2015 to the solicitor’s personal account, which was overdrawn by £113,700.
The payment was made with the reference ‘loan repayment’, but there appeared to be no evidence on the client file of the loans “purportedly made” by the solicitor.
However, in 2019, a related client confirmed to the firm that Mr Hurstfield had made the “informal and undocumented” personal loan.
Mr Hurstfield also admitted that, between 2015 and 2018, he caused or allowed substantial payments to be made through three client accounts which did not relate to underlying legal transactions.
In non-agreed mitigation, the solicitor said of the amended declaration of trust: “I realise that I acted as a compassionate human being first and a solicitor second, although with no intention of being dishonest. Nevertheless I accept that this was not the correct professional decision.”
Mr Hurstfield said he had to admit the unauthorised loans because an addendum to the trust deed which gave him the power to make them could not be found.
As to the £112,000, he explained that he and another client had loaned the money in the charity’s early days knowing it may not be repaid.
“This is the reason they were informal, unsecured and interest free and hence why there was no formal documentation on file. Any risk was therefore ours alone and not the charity’s.”
In relation to using client account as a banking facility, Mr Hurstfield said he had represented the clients for decades and believed he was acting in their best interests, knowing “there was little or no risk of tax evasion or money laundering”.
But he did not contend that the mitigation amounted to exceptional circumstances such that he should not be struck off.
The SDT said Mr Hurstfield’s actions with the trust deed “fell far below the standards of integrity, probity and trustworthiness expected of a solicitor”.
He was struck off and ordered to pay costs of £52,300.
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