The law firm Harwood has been found vicariously liable for losses, damages and costs incurred by the insurer Aviva, after recruiting a solicitor with a criminal record.
In a Press release from the insurance law firm HF, it was revealed that Wasim Khan was engaged by Harwood as a fee earner with the authority to negotiate claims against insurers and process settlement funds. However, before he came to the role, Khan had a string of criminal convictions and by 2020 had racked up 11 previous appearances before the criminal courts and been charged with 16 different offences, including burglary, robbery and possession of weapons.
Despite this evidence of criminality, Khan was given a position of responsibility within Harwood. HF noted that in one case, Khan gave Aviva his own bank details, claiming they were Harwood’s details and resulting in payments being made directly to him. Aviva then updated their system using those details, meaning further payments were made to Khan on other cases.
In total, Khan received £21,128.75 from Aviva. He was found guilty in criminal proceedings and sentenced.
After his sentencing, Aviva – advised by Alex Wilkinson, Partner and Vicky Barry, Associate, of HF – looked to pursue recovery of their money from Harwood solicitors, with HF arguing that Harwood was, ‘vicariously liable for Khan’s actions as he had committed the fraud by abusing his position within the firm’. In effect, HF contested that Harwood had not protected against him taking the action he did.
During the trial which took place on March 7, 2023, Harwood defended the claim but it was argued that:
• Harwood is a regulated firm of solicitors and owe duties to the Court, the SRA etc;
• There was no evidence any DBS checks were performed;
• Harwood knew about Khan’s convictions and yet employed him in a position of trust
• It appeared no risk assessment was completed to ensure there was no dishonesty on his part.
During the trial, HF revealed that Raja Afzal, a director of Harwood who was responsible for hiring Khan, declared he had, ‘no lessons to learn and would do the same again’ despite the fact that he knew about Khan’s previous convictions.
Commenting on the case, Deputy District Judge Peter Causton said that it was remarkable Khan had ever been appointed in the first place and held Harwood responsible for the foreseeable risk.
Damages were also awarded – amounting to £22,866.63, along with Aviva’s costs at £22,076.16.
Alex Wilkinson, partner at HF and head of the firm’s Technical Fraud Team, said: “It was staggering to see that a firm of solicitors would seemingly have such poor processes in place when recruiting staff. I’m pleased to see the court found them responsible for Khan’s actions. This result should stand as a warning to other employers to ensure their recruitment and vetting processes are fit for purpose.”
Also commenting on the case, Carl Mather, manager, UKGI Special Investigations Unit of Aviva, said, “While very satisfied with this judgement Aviva is also disappointed that it had to take this action against another regulated professional. Harwood created a rod for their own back by refusing to accept responsibility for the actions of an employee acting in the normal course of their duties and in addition to being ordered to pay Aviva’s claim in full, they are now also left with legal costs.
“The outcome is another example of Aviva putting customers at the centre of every business decision we make and the determination to use all means at our disposal to mitigate the impact of fraud losses on policy premiums, especially at a time when real economic hardship is being faced by many people in the UK.”
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