The Insolvency team in Thames Valley have had a recent success with the recovery of a six-figure sum in relation to a fraudulent transfer of funds. In this success Partner Katie James was assisted by Trainee Solicitor Tom English.
The background to this story details both a success for the clients involved in a difficult and distressing situation, and a lesson in legal practice basics.
The Thames Valley Insolvency team was contacted by two individual clients who had been engaged in a remortgaging of their current home, entered into to release funds to aid them in the purchase of a another property. Our clients instructed a law firm to carry out the remortgaging work on their behalf. When the time came for the law firm to transfer the funds received from the bank involved in the transaction to our clients account, the law firm was contacted ostensibly by our clients, who told them to transfer the funds to a different account. The law firm duly obliged and sent the funds on to the newly given account number.
What had in fact happened was our client’s email account had been compromised by fraudsters, who had intercepted our client’s correspondence relating to the remortgage funds. The solicitor at our client’s law firm did not think the change of account details, made on the day the funds were scheduled to be transferred, was suspicious. The solicitor did not check with our clients, via telephone, and confirm these new details with our clients. The solicitor did not regard the emails received from the fraudsters as oddly out-of-keeping with our client’s previous correspondence, as the email providing the new account details contained misspellings and grammatical errors. The funds were intercepted by the fraudsters and were duly siphoned off into a multitude of accounts.
Our clients, concerned at not having received their funds, notified the law firm concerned and the fraud was uncovered. Contacting the authorities, our clients received correspondence from the law firm which sought to absolve them from any responsibility for their actions in transferring the funds. At this point Blake Morgan were instructed to recover the funds if possible.
Seeking to recover the funds for our clients, our Insolvency team sought the aid of Blake Morgan’s Risk and Compliance team who advised that the law firm’s client account would have to be readjusted and the funds restored. Relying on regulatory principles in the SRA’s Code of Conduct and Accounts Rules, the Thames Valley Insolvency team was able to tenaciously and effectively negotiate with the law firm concerned and liaise with the SRA to restore the funds expeditiously, and given the completion of the client’s related property transaction depended on a swift resolution this speediness proved to be of paramount importance to our clients. The matter was successfully resolved with our clients receiving their funds from the law firm concerned within a week of the initial complaint arising.
This successful outcome shows Blake Morgan’s Thames Valley Insolvency practice at its best, fighting hard to successfully recover funds for its clients. It is also a matter which highlights the need for legal practitioners to show great care in transferring funds to clients, especially where there has been a change in account details, and to always confirm such details over the telephone.
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