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UK-Justice
UK-Justice, Barrister
Category: Law
Satisfied Customers: 16193
Experience:  Called to the Bar in 2007
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I, along with other creditors, installed a Liquidator into

Customer Question

I, along with other creditors, installed a Liquidator into a Company, whom we believed was fraudulently trading.

I was the sole funder of the Liquidator and his legal team i.e. his solicitors and Counsel. Initially I paid the Liquidator direct; I telephoned him direct and have one lever arch file of correspondence directly from him. The Liquidator then took a back seat and I had direct contact with the solicitors, I telephoned them direct and have a further 2/3 lever arch files of correspondence direct from the solicitors to myself, I also thereafter paid the solicitors directly, either by cheque or directly into a client account.

Would it be safe to assume that I was owed a duty of care by the Liquidator, the solicitors and Counsel, direct or otherwise?

I was asked by one of the solicitors, ten days before the time limitation period was up, if I could provide £100,000 to prove to the Liquidator, that I could pay an Insurance Premium, when one became available. I was told, should this money not be in the solicitors possession within these 10 days, the Liquidator would not enter the case into Court. This £100,000 was sent to the solicitors client account, within a few days. I received a fax from the solicitors, stating this money was for Adverse Costs, I telephoned the solicitor immediately and told him that the money sent could only be used for an Insurance Premium, the solicitor stated that that was what it was called “an Adverse Costs Insurance Policy” and that this money would be kept in the client account in my name, till an Insurance Premium was obtained.

One year later, I was told by the same Solicitor, that an underwriter he had been in contact with had offered £750,000 Insurance Cover for a Premium of £225,000. I raised this premium and it was agreed that £100,000 would be sent immediately and on the receipt of same, the Solicitors firm would cover the premium until the remaining £25,000 could be sent some 4-6 weeks after, wouldn't it be safe to assume that I had indeed paid the Premium for Insurance Cover of £750,000?

I believe that the 2 extracts of documentation below, that I had received from the solicitor involved, confirms that I had paid this money, on the belief that this Insurance Cover existed.

LETTER 1
"Further to my telephone conversation with ----- earlier today, I confirm that the proposed Underwriters have requested comfort that you are able to pay a premium of 30% of £750,000, before they continue with the processing of the application further.

I understand that you have a further £100,000 available in order to fund the premium together with the £100,000 ------ currently holds. I also understand that you are able to obtain a further £25,000 if necessary.

In order to give the proposed underwriter some comfort please forwards the £100,000 currently available to ------- client account, details of which are set out below."
Would it be naturally assumed, that the underwriter was the Insurer, as I had believed?

The £25,000 was sent 5 weeks later, as confirmed in Letter 2 below.

LETTER 2
"I confirm receipt of the cheque for £25,000 in respect of the anticipated insurance premium.

Also, I confirm I have discharged ------ fee’s to date amounting to £19,787.00 including VAT."


On receiving the above letter, I telephoned the Solicitor and asked what he meant by the “Anticipated Insurance Premium” as he had told me, as stated above that the premium would be covered until the remaining £25,000 was received. The solicitor involved stated that this was just a formality as it takes time for the insurance contract to be finalised.

The words “Anticipated Insurance”, does this give the solicitors the right to use this money any way the solicitors see fit, without our express permission, or can this money only be used for the premium for the specific £750,000 insurance cover for what the money was actually intended for?

I have recently found out that this Insurance Cover had not only never existed, but had never even been offered to the solicitor, by any Underwriter or Insurer. This money, we later found out was used to pay Adverse Costs amongst other things. Is this a fraud committed against myself i.e. to ask me for money with the intent that I a creditor believed, as seen in the enclosed letters, that it was for Insurance Cover, which actually never existed?

If the answer to 5 above is yes, what recourse do I have?

Thank you for your assistance
Submitted: 3 years ago.
Category: Law
Expert:  UK-Justice replied 3 years ago.
Thanks for your question, my name isXXXXX will do whatever I can to help you today.

Did you sign any terms and conditions?
Customer: replied 3 years ago.

I never signed any contract with the Liquidator, but during the time the Liquidators Solicitors took instruction from me, worked directly for me, in gaining an Assignment and advised me directly in various matters.

Expert:  UK-Justice replied 3 years ago.
Did you sign anything with solicitors?

So the sols used money given for one purpose but used it fir another?
Customer: replied 3 years ago.

No, I did not sign anything for the solicitors.



The two extracts of letters enclosed, show that I gave £225,000, specifically to be used for the cover of £750,000, which had been aggregated by the initial £100,000 then the following £100,000 and the further £25,000 I sent to the solicitors. These monies I had been told were used to fund the Cover of £750,000. I have just recently found out that there was never even the offer of the cover, as stated in the first letter and this money had therefore been asked for falsely.



I have been given various different ways this money has been used, inclusive of Adverse Costs, Insurance cover of only £400,000 (which I have seen no proof of), Bills, Expert Witnesses

Expert:  UK-Justice replied 3 years ago.
But it was your underatanding that it was for insurance?
Customer: replied 3 years ago.
The answer to your question is yes, the full £225,000 was specifically asked for and given to be used specifically for an insurance premium.


I was specifically asked to send £100,000 to the solicitors, 10 days before the limitation period of the liquidation was up, to give the Liquidator some comfort that I could pay the premium of Insurance Cover when one became available, this money was to be held in a client account. I sent the first £100,000 specifically to be held in the client account for an Insurance Premium.


One year later, the extract of the first letter, was confirmation that I had raised the money for the Insurance Premium, specifically asked for by the solicitor, who had told me that the underwriter had offered specific insurance cover of £750,000, if I could pay the 30% premium asked for. I raised the further £125,000 needed for this premium and this also was sent to the solicitors to be aggragated with the first £100,000, to cover the specific premium asked for. The letters confirm that the solicitor had told me what the money was needed for.
Expert:  UK-Justice replied 3 years ago.
Does the liquidator owe you a duty of care - no.

His duty is to get the best result for creditors.

Although you paid for the liquidator he owes you no specific duty as such, he is there to provide a function that being t get the best result.

The solicitors should also not be acting without a signed times and conditions.

It also sounds I proper that they have asked for £ for one purpose and used it for another,

I would write to the managing partner and complain as this sounds like a breach of the solicitor rules.

Also the money in your client account can not be used without permission of you for anything. They must use it for the insurance.

If your complaint to the partner is not resolved then you should complain to the solicitors regulation authority.

They regulate solicitors, can investigate and prosecute if necessary.

They can be found at www.sra.org.uk

If there you have any questions or if I can help you with anything else please let me know.


Please remember to click *** OK SERVICE *** or above so that I am credited for my time. The question does not close and you can ask follow ups.

Important: If you feel the need to rate as one of the lower two scores, it counts as negative feedback so please reply to me via the REPLY with any further questions you may have. I will be happy to assist you further.
Customer: replied 3 years ago.

1. Would the "Special Circumstances" or " Close Proximity" Rule not work here with the Liquidator?



2. Would the solicitors not directly owe me a duty of care with the handling of my money?


 


3. Does the fact that I was specifically told by the solicitor, that an underwriter had offered Insurance Cover of £750,000, for a premium of £225,000. I was induced to pay this money, believing that such an offer was true. I later found out that no such offer of insurance had existed. would this not be constituted as fraud?

4. Would this not constitute a criminal act. i.e.Giving a deceptive statement of fact intending that another person acts on it.



Thank you for your assistance
Expert:  UK-Justice replied 3 years ago.
A. They may but the main duty is to maximise return for creditor.

B. yes the solciitor would which is why you may need to go via sra

C. Fraud, maybe not but certainly you paid for one specific purpose.

D. No it's not criminal I don't think

If there you have any questions or if I can help you with anything else please let me know.


Please remember to click *** OK SERVICE *** or above so that I am credited for my time. The question does not close and you can ask follow ups.

Important: If you feel the need to rate as one of the lower two scores, it counts as negative feedback so please reply to me via the REPLY with any further questions you may have. I will be happy to assist you further.
Customer: replied 3 years ago.

Could you be more specific with your answer to question1:-

I was the main creditor and had paid approximately £70,000 to the Liquidator and the solicitors, before the solicitors said they would work for a CFA, and before the Insurance was asked for, over and above the direct communication to both Liquidator and solicitors as stated earlier.

Could you clarify your answer to question 3.

As I was deceived by the solicitor into supplying this money, as the Insurance Cover specified did not exist. I therefore lost the £225000 specifically asked for as seen in the letters, sent for this non existant premium. Surely this is the act of Fraud

Expert:  UK-Justice replied 3 years ago.
The liquidator does not owe you a specific duty but works to secure the best amount for all creditors.

The duty is to secure funds rather than one owed to a particular party.

It is only fraud where one person makes a representation to make a gain for himself and to cause loss to another which turns out to be false.

The funds were paid into the client account and not to the solicitor so no fraud, but a regulatory matter.

If there you have any questions or if I can help you with anything else please let me know.


Please remember to click *** OK SERVICE *** or above so that I am credited for my time. The question does not close and you can ask follow ups.

Important: If you feel the need to rate as one of the lower two scores, it counts as negative feedback so please reply to me via the REPLY with any further questions you may have. I will be happy to assist you further.
UK-Justice, Barrister
Category: Law
Satisfied Customers: 16193
Experience: Called to the Bar in 2007
UK-Justice and other Law Specialists are ready to help you
Customer: replied 3 years ago.

Thank you for your help

Expert:  UK-Justice replied 3 years ago.
Welcome
Expert:  UK-Justice replied 3 years ago.
I'm just following up with you to see how everything is going. Did my answer help?

UK-Justice

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