A former Bircham Dyson Bell partner has been struck off the Roll after knowingly overcharging clients, misusing client funds and making false expense claims to the tune of nearly £2m.
William Pencharz was asked to leave Bircham Dyson in February 2010 after a routine review of a file relating to the estate of ‘Ms JB’ raised concerns and led to the review of a further 181 files by the firm.
Of those files, 83 raised suspicions of client overcharging – with one client overcharged by as much as 1100% on a worst case scenario costs draftsman’s estimate. Thirty one files revealed misuse of client funds for minor expenditure and 85 files showed inadequate accounting to clients. Pencharz was also found to have forged three clients signature.
Bircham Dyson immediately reported both its initial and later suspicions to the Solicitors Regulation Authority and in July 2011 sent a letter of claim to Pencharz for the cost of auditing the files (£501,675.10); a demand for £1,944,500 for sums owed to clients; and £424,755 for the profit share paid in reliance that his billings were lawful.
As first revealed by RollonFriday, Pencharz was also found to have invested around £1m of client funds into the highly speculative Poop Company – of which he was a director and investor – which bankrolled the search for sunken Spanish Armada treasure.
Striking off Pencharz, the solicitors disciplinary tribunal in July found ‘dishonesty proved with regard to three distinct matters being overcharging by the respondent, false expense claims made by the respondent and forgery by the respondent or which he had permitted of clients’ signatures.’
The forgery, together with the fact that the misconduct occurred over a lengthy period and in two cases involved vulnerable clients with little family, were aggravating factors.
The tribunal said it had ‘rarely come across such serious misconduct carried out over several years on a number of different matters by a solicitor.’
Neither the firm nor any member of the firm were found to be at fault.
At the time of the tribunal, Bircham Dyson had yet to issue civil proceedings against Pencharz and the total amount refunded by the firm to clients was £2,005,000 plus £175,000 interest with provision for a further £795,000 which might have to be refunded. The firm has also refunded clients £232,420 where there had been inadequate or inappropriate accounting to clients, including £100,000 for fees relating to the Poop Company.
A statement from Bircham Dyson said: ‘A number of serious irregularities by William Pencharz, including breaches of the SRA Accounts Rules, were highlighted during a routine review of files under our internal risk management procedures in late 2009. Our findings were reported to the SRA in January 2010 and Pencharz left the firm at our request with effect from 28 February 2010.
‘We note and fully support the Solicitors Disciplinary Tribunal decision against Pencharz. The SRA has confirmed that no action is to be taken against the firm or any other member of the firm.
‘No client money has been lost and we continue to take all steps necessary to ensure that no clients have suffered as a result of the actions of Pencharz.’
Pencharz, who chose not to attend and was unrepresented in court, was ordered to pay £34,000 in costs.