Solicitor ordered to repay £22M

First, a warning. This article has nothing to do with IP law. But the story it describes is shocking, at least to IP Draughts. It affects all of us who practise in a profession whose “brand” is based on honesty and integrity.

Three years ago, the Solicitors Regulation Authority closed down the law firm, Blavo & Co. Solicitors Limited, and placed restrictions on the practising rights of several of its staff. The firm’s managing partner was Mr John Blavo. From a search on the Law Society website today, it seems that Mr Blavo continues to be a solicitor but is not practising. The SRA website doesn’t appear to show any intervention in the case of Mr Blavo, though it does reveal sanctions against about a dozen of the firm’s staff. IP Draughts wonders why Mr Blavo was not subject to the same restrictions as other members of staff in his firm, and why he has been allowed to remain as a solicitor, in view of the facts described below.

On 21 December 2018, Mr Justice Pepperall’s judgment in the case of The Lord Chancellor v Blavo & Co Solictors Ltd & Anor [2018] EWHC 3556 (QB) was published. The judge ordered Mr Blavo to repay over £22 million that had been paid to the firm for legal aid work on mental health cases. In the words of the judge:

The shocking allegation at the heart of this case is that Blavo & Co. made dishonest claims for payment on the legal aid fund for thousands of cases where it was not entitled to any fee.

Elsewhere, the judge noted that:

…the firm grew rapidly and, by 2015, operated from 18 offices throughout England and Wales.

…at its height, [Blavo & Co] was the second or third largest legal aid firm in England and Wales.

…on the balance of probabilities, I find that the practice of making fraudulent claims on the legal aid fund was endemic at Blavo & Co.

The facts described in the case report are shocking, and on an industrial scale. But what strikes IP Draughts particularly is the chaotic way in which both the firm and the Legal Aid Agency (LAA) operated. The judge notes the evidence of LAA witnesses who, keeping an open mind at the outset of their investigations, considered it possible that the discrepancies between the solicitors’ files and the records of the LAA were due to errors on the part of the LAA. That this was a plausible prima facie explanation for the discrepancies is itself shocking.

The primary fault in a case like this must rest with the individuals concerned who made inappropriate claims for funding to the LAA, closely followed by the people who ran the firm and allowed this situation to arise. But others should share the blame.

To IP Draughts, this case has the fishy smell of the government seeking to reduce its management responsibilities, and reduce costs, with a policy decision to place legal aid work in the hands of a small number of factory-scale firms of solicitors. This reminds us of other areas of activity where the government does this, such as placing outsourcing contracts with firms like Carillion, now in liquidation. It also has echoes in the banking collapse of 2008, where some firms were perceived as “too big to fail”.

But we shouldn’t take comfort from this, as if blaming the government absolves the solicitors’ profession from its own share of blame. It is not the first time that a major legal aid firm has gone under. In the past, the SRA’s response to these types of events has been  to increase the requirements for solicitors to adopt formal processes. In IP Draughts’ view, this is only part of the picture, and can be counterproductive if applied in an unthoughtful way. Bureaucracies measure what can be measured. What is also needed is to reinforce the traditional ethos of the profession. This intangible quality can only be supported by creating and maintaining a common sense of purpose within the profession. This is a long-term project, appealing to hearts and minds, not spreadsheets.

IP Draughts has no information on whether Mr Blavo has the resources to pay £22 million to the Lord Chancellor, or meet earlier costs orders arising from the closure of his firm. But he is not holding his breath. In his view, this latest saga should make all of us reflect on what solicitors need to do to maintain or restore the trust between the legal profession and its “stakeholders” including clients and public funders.




Filed under Legal practice

2 responses to “Solicitor ordered to repay £22M

  1. Thanks, Carol. One of my concerns is that politicians who, for whatever reason, don’t want the legal aid system to continue, will use this case as an argument for their position.

  2. Spot on, there is a general malaise these days in the UK of businesses trying to make money for old rope, it’s particularly acute in financial services or where large contracts are involved. Just wait for the fall out from HS2 expenditure!

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