20 August 2012Print This Post

Solicitor removed from roll after setting up unregulated insurer to provide clients with ATE

Panama: unregulated insurance company set up

A personal injury solicitor who set up an unregulated offshore insurance company to provide after-the-event policies for clients has removed himself from the roll after making an unusual deal with the Solicitors Regulation Authority (SRA) that means it is the equivalent of being struck off.

Godfrey Harry Rutter Morgan, 44, of Norfolk, admitted eight of the 16 allegations made against him before the Solicitors Disciplinary Tribunal. As well as admissions about the insurance company, he admitted to allegations of dealing with an intermediary who worked on a contingency fee basis, and to letting a client use his client account as a banking facility and lying to that client’s creditors.

An agreement reached by Mr Morgan’s counsel and the SRA, and approved by the tribunal, allowed him two months to hand over his practice – Godfrey Morgan Solicitors, also known as GMS Law – in an orderly fashion before voluntarily removing himself from the roll and paying the SRA £45,000 in costs.

It was accepted that Mr Morgan was not an immediate risk to the public, while at the time of the hearing in April, he was a patient at the Priory Hospital.

His counsel, Marc Beaumont of Windsor Chambers, told the tribunal that no clients had complained about the matters under investigation, and that the solicitor had facilitated access to justice. While the insurance scheme had been “misconceived”, he said the intention was benevolent and only three cases had been unsuccessful, with no losses suffered by clients.

The insurance company, called variously GIRY and NIC, was registered in Panama and operated from an office in Bulgaria. It was not regulated to provide insurance, and Mr Morgan also admitted to failing to account to clients for the pecuniary award he received from it. Other allegations relating to the inappropriate nature of the insurance were ordered to lie on the file.

There were 237 policies issued, which had a £5,000 excess. Mr Morgan said this made clients more cautious, although the tribunal said clients would have needed full advice on whether this was right for them.

The tribunal said that its usual order in a case like this would have been a strike-off. Though it emphasised that it did not want to set a precedent or give the impression that it was possible to “do a deal with the SRA which the tribunal would agree”, in the circumstances it was in the public interest to agree to the deal. The company had accumulated around £467,000 in its account.

The tribunal directed that any application to be readmitted – which would not be for at least six years – should be treated as if he had been struck off and should take into account that Mr Morgan had admitted dishonesty.

There is no suggestion of any wrongdoing by GMS Law or anyone else working for the firm. GMS Law director Richard Clegg did not return a call for comment, but was quoted in the Eastern Daily Press as saying: “I would like to stress nothing in the judgment affects any current clients or would affect any potential new clients. I have recently set up a new relationship with an established insurer so I can offer my clients the best possible no-win, no-fee cover.”

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