THE BRISTOL & West Building Society is putting increasing pressure on the Solicitors Indemnity Fund to pay up the u500,000 compensation resulting from the alleged remortgaging frauds totalling u1 million by ex-solicitor Geoffrey Beccle.
The sale of a property in London last week acted as the trigger for Bristol & West and several other building societies, all of whom have charges on the property.
Abbey National has successfully sued Bristol & West and Barclays in order to stake a majority claim on the money arising out of the property sale, thought to be worth at least u400,000.
Meanwhile, Bristol & West has won an Order 14 judgement stating that Beccle owes it u500,000, and is already pursuing that money through a variety of routes.
A spokesman says the fact that Bristol & West will have none of the funds from the property sale will only intensify its pursuit.
However, legal action by Bristol & West against the SIF will drag into the public arena an issue that Bristol & West lawyers say is a major problem of the profession – the definition and extent of liabilities of a solicitor's partnership.
Because Beccle is no longer a solicitor, the Bristol & West's indemnity claim is through the cover of Morag Smith, an innocent party.
At the time of the alleged fraud, Smith was a salaried partner of Beccle in his firm Geoffrey Beccle & Co.
The SIF contests its liability, saying that Smith was only a salaried partner – to which she signed an affidavit – and that Beccle acted as a sole practitioner.
But Nick Eyre, Bristol & West's head of legal and compliance, says the Law Society's conduct rules say it treats salaried and equity partners equally.
“This is ridiculous and it raises a significant issue. It is an unjust situation if solicitors hold themselves to be partnerships on notepaper and in Law Society records, and then claim to be sole practitioners,” says Eyre. “Rest assured, we will be litigating this point.”