A former solicitor has successfully applied to the government for around £15,700 in payments after his firm went under.

In a reconsideration judgment published this week, Richard Clegg was awarded the sum by the secretary of state for business, energy and industrial strategy following an employment tribunal hearing in March.

Clegg was employed as a personal injury solicitor with Norfolk firm GMS Law from August 2003 to June 2018. In December 2018 he was struck off by the Solicitors Disciplinary Tribunal for dishonesty (he later lost an appeal against that decision).

The employment tribunal’s judgment states that Clegg continued to be a director of the company until it ceased to exist in November 2020, and he submitted claims to recover redundancy pay, arrears of pay, holiday pay and compensation for loss of notice pay.

Clegg had asserted he was entitled to recover monies under the government’s redundancy payments service, which compensates ex-employees of an insolvent employer where statutory conditions are satisfied.

Initially the secretary of state had not admitted GMS Law was insolvent and contended the state was not able to act as guarantor to the monies Clegg claimed.

Employment Judge Hutchings, sitting at the Norwich tribunal, awarded Clegg £6,600 last September but he applied for reconsideration on the calculation of holiday pay and offsetting of notice and redundancy pay.

In front of the same judge this year, the tribunal heard that Clegg’s salary was £50,000 by 2018. He could not produce payslips for 2018, saying that his wife had thrown them away, but his P45 notes total pay for two months in the 2018 tax year as £8,333.

In May 2018, the SRA confirmed closure of GMS Law for financial reasons. The regulator has since said that all ongoing matters and archived files were transferred to other firms, although in theory there was no reason why the GMS Law entity could not go on providing non-reserved legal services.

Other than Clegg and the office manager, all employees were made redundant in February 2018. The company terminated Clegg’s employment on 31 May 2018 and he was paid up until then as his leaving date.

The tribunal heard that Clegg did not receive written notice and his employment came to an end ‘when all the files had gone’. The tribunal’s judgment made no reference to Clegg being struck off.

Companies House records show that GMS Law Limited was dissolved by compulsory strike-off in November 2020 (although a more recent update from the start of March this year shows that the company has been restored by court order).

The judge ruled that GMS Law met the statutory definition of ‘insolvent’ and that the business secretary now accepted this conclusion. He awarded Clegg around £5,900 for notice pay, £2,200 for holiday pay and £7,600 for redundancy pay.

The government will also pay almost £5,000 to Suzanne Clegg, a paralegal with the firm for five years, after she also made a successful claim.

 

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