An experienced solicitor who failed to disclose two counsel’s opinions on a case to an after-the-event (ATE) insurer, one of them assessing chances of success at less than 50%, has been fined £8,000.
The Solicitors Disciplinary Tribunal (SDT) heard that Elite Insurance voided its policy with Nigel Martin Kinder’s client, ‘Mrs M’, leaving her personally liable for arbitration costs.
The defendant in the arbitration case, Mr L, obtained a charging order for £78,100 against Mrs M’s house.
However, Mr Kinder’s law firm at the time, Samuels Solicitors, had already registered a charge over Mrs M’s equity in the property for £158,500, to secure payment of its legal fees, and this took precedence.
Mr L pursued Mrs M for the damages and costs awarded by the arbitration through further litigation.
Approving an agreed outcome between Mr Kinder and the Solicitors Regulation Authority (SRA), the SDT said that Mr Kinder, an experienced solicitor qualified for 25 years at the time of the misconduct, ought to have disclosed the two counsel’s opinions rather than just the third, more recent, one he did hand over.
The SDT heard that Mr Kinder, born in 1955 and qualified in 1983, practised as an associate at Symes Robinson & Lee and then as an assistant at Samuels Solicitors between 2004 and 2010.
Mr Kinder’s predecessor at Symes Robinson obtained a counsel’s opinion on Mrs M’s case in November 2003 from RS, who did not give a percentage chance of success.
Mr Kinder instructed another barrister, RWG, to give his opinion on the case in 2007. This assessed the chances at less than 50%.
Proceedings were issued against Mr L later that year. Mr Kinder obtained a third counsel’s opinion, from SB, in 2008.
Mr Kinder, who continued to represent Mrs M when he moved to Samuels, completed an ATE insurance proposal form that summer and sent it to insurance broker TheJudge.
Mr Kinder disclosed the opinion of SB, but not of RWG or RS, and he referred to a 65-70% chance of success.
Mrs M accepted a quote from Elite Insurance in December 2008, with a limitation on liability of £120,000.
The arbitration took place in February and March 2009. Mrs M’s claim was rejected, Mr L’s counterclaim for £12,600 allowed and Mrs M was ordered to pay costs on the indemnity basis.
Mr Kinder made a claim on Mrs M’s ATE insurance. Elite said there had been material non-disclosure both by Mrs M and Mr Kinder, who had disclosed the existence of the two opinions when submitting the claim.
Elite said the RWG advice “was material to the underwriter’s assessment of the case, particularly considering counsel’s assessment of the prospects of success were below 50%”.
Mr Kinder argued that the opinions of RS and RWG were “preliminary advice as they lacked information and documents required to produce definitive advice”.
But the SRA said that, in light of the definition of ‘materiality’ in the proposal form and the issues raised in the advice, he should have “erred on the side of caution” and disclosed them.
The solicitor admitted failing to disclose all material facts when completing a proposal form for ATE insurance and signing, with his client, an acceptance of quotation document stating that they had not “missed out any information or facts which are likely to affect a decision to provide cover”.
The tribunal concluded that the solicitor “ought to have known that he was in material breach of his obligation to protect the public and the reputation of the profession”.
But it noted this was a single incident in a previously unblemished career. “There was no evidence of repetition, bad faith, or dishonesty. Further, the respondent had not concealed his conduct from his client.”
An allegation of recklessness was withdrawn by the SRA. Mr Kinder was fined £8,000 and ordered to pay £2,000 in costs.