DWF partner fined £14k over £2.2m mistake

Mark Shepherd, a London-based real estate partner at DWF, has been fined over £14,000 by the Solicitors Disciplinary Tribunal (SDT). 

Shepherd admitted to breaching several SRA rules between 2019 and 2020 while acting for a residential property developer client on a now-failed scheme. The client went into administration soon after the payments were made.

Between October 2019 and November 2020, he mistakenly authorised the release of more than €2.6 million (£2.2 million) held in DWF’s client account without checking that key contractual conditions had been met.

By the time the error came to light in December 2020, aerial images showed the site was still "bare land". 

Supervisory failures

In mitigation, Shepherd admitted that he failed to verify whether £2.2 million in buyer funds were properly due before approving their release. 

However, he pointed out that although he was the client partner for the developer, he did not directly supervise the matter. The day-to-day conduct was handled by a senior paralegal in the firm’s plot sales team in Manchester. 

That paralegal, unbeknown to Sheperd, had no legal qualifications.

Shepherd said he'd relied on assurances from colleagues and firm materials that the plot sales unit operated independently, as "a self-contained full-service team". He also assumed, wrongly, that proper internal controls were in place to ensure only suitably qualified people could handle this kind of work.

Shepherd said he "mistakenly" assumed that "recruitment to and employment within the plot sales team of an international law firm would include appropriate verification of qualification and experience".

However, he admitted that he "should have taken further steps to properly ensure that the very large sums… being requested for payment were in fact properly due".

SDT decision

The SDT noted his admissions, early cooperation, and the fact that he self-reported the breach once the issue was raised internally. 

But it also made clear that, as a client partner and senior solicitor, Shepherd had "ultimate responsibility for final sign off on the payment authorisations" and "should have exercised greater care and scrutiny before authorising their release". He was found to have failed to maintain public trust in the profession or protect client money. 

Outcome

Shepherd was fined £14,168 and ordered to pay £19,000 in costs.

DWF made good the shortfall of over £2.2 million through a mix of its own funds and professional indemnity insurance.

Shepherd, who trained at SJ Berwin and was previously a partner at Paul Hastings and a legal director at DLA Piper, remains at DWF in London.