It's a Law Society controlled fund that was established by parliament to compensate victims of a solicitor's dishonesty. Its workings are top secret and the Freedom of Information Act does not apply. Every solicitor in Scotland pays into the fund annually, but our evidence shows that it fails to compensate victims in the way parliament intended. In support of this we cite to you the two cases detailed below.

Case 1. John Billig - Robbed TWICE by Scotland's Legal Industry

In 1992, John Billig, a successful London businessman and commercial lender, became the innocent victim of a Scottish solicitor's dishonesty. The solicitor in question, Michael Mullen, was ultimately struck off, made bankrupt and prosecuted in the criminal courts for fraud. Mr Billig was then forced to endure a brutal and costly 14-year legal process in what would ultimately become an unsuccessful bid to recover his losses. Billig was also left with a legal bill rumoured to top £500,000, and added to his original losses of £150,000 + interest, Billig’s total losses (as the victim) may be as much as £1,000,000.

Despite it being accepted by both the Law Society and the Court of Session that Billig had indeed been a victim of Mullen’s dishonesty, they refused to sanction a payout from the Guarantee Fund. This was because the Society and Court of Session ruled that Mr Billig should not have trusted Mullen! In the words of the Dean of the Faculty, who represented Billig: The Law Society was effectively saying: "you cannot trust a Scottish solicitor". The Court of Session rubber-stamped this absurd position, and added to the sophistry already used by the Society to avoid paying out.

14 Years of Legal Hell

This case also highlights just how the legal profession isn't actually a profession at all - it's an industry. They managed to take a relatively simple case of solicitor dishonesty, twist it, add some findings which are not supported by facts, drag it out for 14 years and amass themselves up to £1,000,000 in the process. Your average citizen could understand the Billig Case - from both a factual and legal perspective - in a couple of hours flat. Yet Scotland's legal industry managed to spin it out for 14 years. Truly incredible!

On a serious note though, the Billig case, as with the Tom Murray case below, demonstrates just how little statutory protection is afforded to citizens who become a victim of a solicitor's dishonesty.

The Background to this Scandal

1992 - Mullen was able to trick Billig into parting with £150,000 in commercial loans by providing an “Undertaking’ to irrevocably and unconditionally repay the loans. A solicitor’s Undertaking is binding in Law and is used every day by not just solicitors, but other professionals as well. Needless to say Mullen disappeared, along with all the money and it later transpired that Mullen had pulled this scam against others and that the Law Society of Scotland had known all about Mullen’s well-rehearsed fraudulent behavior. In 1993 Mullen was prosecuted before the Scottish Solicitors Discipline Tribunal and found guilty of professional misconduct in respect of his Undertakings’ swindle. He was suspended from practice for only three years. He wasn't struck off until several years later.

1993 - Mr Billig’s English solicitor contacted the Law Society of Scotland intimating a claim on the Guarantee Fund. The Law Society however insisted that Billig must firstly try to recover his losses by taking a civil court action against the solicitor(s) involved; a very convenient way of lengthening the legal process by many years. Billig did so, but was unsuccessful in recouping his losses and so in 1998 he made an official claim on the Guarantee Fund, as the Fund was now a ‘claim of last resort’. 

1998 - The Law Society of Scotland receives Billig’s formal application for a grant from the Guarantee Fund.

SIX YEARS of 'protracted legal discussion' followed and it has since emerged that Brodies LLP Solicitors were providing legal advice to the Law Society throughout this time. Brodies are masters at legal prevarication and this perhaps goes a long way to explaining the SIX YEARS of inaction.

In 2004 the Law Society finally accepted the following:

• > Mr Billig had been a victim of Mullen’s dishonesty
• >That he had suffered pecuniary loss
• >The Guarantee Fund was now a ‘claim of last resort’

Tha Law Society however refused to compensate Mr Billig because they said that he ‘shouldn’t have loaned the money on the basis of Mullen's Undertaking'. Instead Billig should have credit-checked Mullen and that Billig's failure to properly check Mullen's credentials meant that Billig had somehow contributed to his own losses - by 100%, no less. Billig on the other hand argued that he DID take reasonable steps to check Mullen's credentials by checking with the Law Society to ensure Mullen was a registered solicitor. The Law Society confirmed that he was, but failed to inform Billig that they had Mullen under investigation for a whole host of fraudulent actings; misconduct for which he was ultimately struck off. Billig was left with two options; accept the Law Society's decision or appeal it to the Court of Session.

Mr Billig's Petition to the Court of Session

The Billig case culminated in 2006 with a Petition to the Court of Session. Billig was represented by the Dean of the Faculty of Advocates no less, the most senior practising lawyer in all of Scotland. The Dean put forward some powerful arguments as to why the Law Society of Scotland, as guardians of the Guarantee Fund, had acted perversely in refusing to compensate Mr Billig:

The Key Submissions made by the Dean of the Faculty on Billig's behalf are detailed in full on our Judgment Page (opens in new window). In summary, they are as follows:

1. It was perverse to say that the dishonesty of the solicitor Mullen, which was in connection with his practice as a solicitor, had no part to play in contributing to the petitioners' losses;

2. The Council proceeded on the footing that someone dealing with a Scottish solicitor is not entitled to rely on his undertaking even although the Council made no finding that there were circumstances which should have led the petitioners to be suspicious of the honesty of the solicitor;

3. A solicitor's undertaking is binding in law and is enforceable; it is also binding as a matter of professional obligation and may be the subject of disciplinary proceedings...The petitioners relied upon the fact that Mullen was a solicitor with a practising certificate and all that follows from that. The faith and credit which third parties give to solicitors' undertakings is an asset to solicitors and to the profession as a whole. The petitioners were relying upon the integrity of a solicitor. Reference was also made to Derry v Peak 1889 14 App Cases 374 on the question of dishonesty. The effect of the Council's Decision was that "you cannot trust a Scottish solicitor". That was not a reasonable position for the Council to adopt.

4.The profession guarantees the honesty of its solicitors; it was perverse to hold that someone who relies on the undertaking of a Scottish solicitor exhibits a want of reasonable care; the Council's decision that the petitioners' negligence contributed wholly to their losses was tantamount to saying that Mullen's dishonesty played no relevant role in the losses which the petitioners sustained; there was a dishonest representation which induced the lender to make the loan and thus achieved its end; it must therefore have causative potency; at common law contributory negligence was no answer to an action based on deceit;

The Key Submissions made by David Johnston QC on the Law Society's behalf are also detailed in full on our Judgment Page. In summary, they are as follows:

1. The Law Society argued that there was a duty on Mr Billig to look much further than just the fact that Mullen was a registered solicitor, in particular:

2. Mr Billig should have credit-checked Mullen

3. Mr Billig should have issued Loan Documentation and not relied upon Mullen's Undertaking

Decision of the Court of Session

PETITION REFUSED

The Judge J Gordon Reid QC accepted the arguments in support of the Law Society's refusal to compensate Mr Billig. The judge felt that the Law Society were correct to hold that Mr Billig had somehow managed to contribute to his own losses by simply taking the word of a Scottish solicitor.

Our take on the Billig Case

Note from the full judgment how the judge details the fact that Mullen had been pulling this “Undertakings scam” on other occasions [p18]. Most disturbingly of all though was that he wasn’t struck off at this point. Instead he was given a 3-year slap-on-the-wrist.

This page has summarised the key issues that are not, by any stretch of the imagination, particularly difficult to understand. Yet it has taken the legal profession 14-years to reach a conclusion. This is outrageous and ALL of the lawyers involved in this case, from the Law Society Council Members through to Instructing solicitors, and even to those lawyers who have read the judgment, must surely be aware that they are party to a legal system which doesn't actually provide justice - it merely acts to line the pockets of those privileged enough to work within it.

Scots Law could, and should, be simplified and that is of our primary goals.

----------------------------

Case No2. The Tom Murray Robbery

Tom Murray is one of the most crooked lawyers in Scotland. He is extremely lucky to have been found guilty of serious professional misconduct on only two occasions, having been prosecuted before the Scottish Solicitors Discipline Tribunal (SSDT). One of Murray's many victims was SACL founder Stuart Usher and the SSDT found Murray guilty of the following:

(1) His deliberately misleading his client [Stuart Usher], by misrepresenting the basis on which he was to use the money received from him and his deceiving his client by transferring the sum of money received immediately to the firm account without carrying out the work as specified in his letter of 11th February 1999.
(2) His transferring the funds received to his firm account without the issuing of a fee note
(3) His acting dishonestly by transferring the funds to his firm
account without, at that time, making payment of, or making
any provision for monies due in respect of the VAT element on
the purported fee

Tom Murray had managed to trick Stuart into parting with three thousand pounds by promising to act for him. He didn't. Instead he fled to Italy, along with Stuart's money and other client's moneys. He was also sequestrated (made bankrupt).

As it was accepted by the SSDT that Stuart had been a victim of a solicitor's dishonesty, Stuart made a claim on the Guarantee Fund, expecting them to compensate the £3,000. They refused. The Law Society claimed that Stuart received legal services from Murray to the tune of £3,000. The truth is that Stuart received no legal service from Murray. This is another example of how the Law Society simply invent reasons so as to refuse to payout. In Stuart's case there was the added factor that he is regarded by the Law Society and their solicitors, Brodies, as being 'the enemy'.

So Stuart didn't receive a penny from the Guarantee Fund and we know of not one instance where the Fund has ever paid out.

 

Page References:

John Billig v The Council of the Law Society of Scotland

Professional Misconduct Finding on Tom Murray's Dishonesty

A Second Professional Misconduct Finding against Tom Murray