The solicitors regulator is to prosecute Mishcon de Reya, one of the UK’s most prestigious law firms, along with a former partner in its high profile sports practice.
los Solicitors Regulation Authority (SRA) announced on Thursday it would bring a case against the firm – known for representing Princess Diana during her divorce, and more recently the businesswoman and pro-EU campaigner Gina Miller – before the Solicitors Disciplinary Tribunal.
The regulator said the tribunal had found Mishcon de Reya has a “case to answer” about allegations the firm allowed its client bank account to be used to make certain payments in breach of SRA rules.
In notices published on its website, the SRA said it would prosecute both the firm and Liz Ellen, who until April 2020 was a partner and head of its sports group which represents elite athletes, sports agents and top football clubs.
The SRA said its allegations relate to the “failure to take any or adequate steps to prevent payments to be made into and from the firm’s client account in circumstances amounting to the provision of a banking facility”.
Under SRA rules, solicitors cannot provide banking facilities to clients and payments to and from its client account must be in respect of an underlying regulated legal service.
The regulator noted that its case against Mishcon de Reya and Ellen were unproven and subject to a full hearing.
According to two sources familiar with the matter, the case relates to payments linked to the transfer of a Premier League footballer in 2011.
The decision to prosecute comes at an awkward time for Mishcon de Reya as it explores floating on the London stock exchange. In April, partners at the 83-year-old firm voted in favour of taking it public with senior management eyeing a £750m valuation.
Mishcon, whose success has been built on a roster of wealthy private clients which has grown along with London’s popularity as a hub for the global super-rich, has seen revenues surge from £48m in 2009-10 to £188m in 2019-20.
El año pasado, the Guardian reported the SRA had spent at least two years conducting a complex investigation into Mishcon de Reya, involving anti-money laundering inquiries. The probe was launched after the SRA received reports relaying a series of allegations about the firm.
One of the reports is understood to have included concerns about payments linked to the transfer of a Premier League footballer and allegations that the bulk of a £1.9m fee paid by Newcastle United football club to a football agent was transferred via Mishcon de Reya’s client account.
A source familiar with the SRA’s case said the allegations against Mishcon de Reya relate to payments connected to this transaction. The agent involved in the deal is understood to have been a client of the firm.
Ellen was seen as one of the firm’s “rising stars”, climbing rapidly through its ranks before she left Mischon last year to establish her own sports advisory and management business. She remained a consultant for the firm, according to her LinkedIn profile.
It is understood there will be a substantive hearing over three days in September at the tribunal where the SRA will present its case. The tribunal adjudicates on alleged misconduct by solicitors. It will make its own decision whether to impose any sanctions in the matter.
A lawyer for Ellen said: “This matter refers to historical issues occurring more than a decade ago when our client was a junior lawyer working under the supervision of various partners at MDR.”
He said he could not comment any further on the case, but insisted Ellen “will defend those aspects of the proceedings that concern any alleged breaches involving her.”
A spokesperson for Mishcon de Reya said the SRA had conducted an investigation into “a historical matter” which the firm had self-reported to the regulator. She said the case before the tribunal “principally relates to admitted technical breaches made in 2011 which are connected to a former colleague and have been fully addressed.”
She added that the firm “will continue to cooperate fully with all regulatory authorities.”
Asked whether Mishcon de Reya faces any other outstanding SRA investigations, the spokesperson said it was for the regulator to comment on the current status of any of its investigations.
The SRA declined to comment.