Litigation firm fined £21k for holding funds without instructions



An international firm has been fined for holding onto millions of pounds intended for claims it was not involved in.

The Solicitors Regulation Authority found that litigation specialist Milberg Ltd allowed more than £3m to improperly pass through its client account. The money was intended for group litigation brought against a car manufacturer in an emissions scandal that the firm was not acting in.

The funds were received because a former subsidiary of Milberg, Ferguson Funding Limited, had entered into agreement with other parties to finance the litigation. Money was procured specifically for the payment of disbursements and insurance premiums on behalf of the claimants.

The firm received four payments in total including monies from three investment companies where no checks were made of the source of the funds. Milberg also received £175,000 from FLF Limited into its client account to be used as security for costs.

In July 2019, Milberg returned the balance of funds to the investment companies.

The firm admitted to breaching SRA accounts rules by receiving and paying out funds which were not in respect of instructions and accordingly providing a banking facility.

In mitigation, there were no other instances where the firm did this, it had seen documents showing that funds were to be used by other firms of solicitors to finance genuine litigation, and the firm believed source checks had been made by one of the investment companies. Milberg has fully co-operated with the SRA investigation and promptly returned the balance of funds for the emissions litigation when the issue was raised.

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The SRA issued a fine of £21,000, saying the firm’s conduct had potential to cause significant harm and that it had full knowledge, control and responsibility for its conduct. Milberg acted recklessly and improperly used its client account, holding onto funds for almost two years.

The level of fine, reduced to account for early admissions, should serve as a ‘credible deterrent’ to the firm and wider profession, said the SRA. Milberg must also pay £600 costs.



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