The recent guilty plea by former solicitor Phil Shiner marks a pivotal moment for Public Interest Lawyers (PIL) as creditors anticipate payments.
- Phil Shiner pleaded guilty to three fraud counts linked to legal aid applications against UK soldiers.
- Liquidator PKF Littlejohn will distribute dividends to creditors due to Shiner’s admissions.
- Shiner’s previous asset transfers have complicated recovery processes, extending his bankruptcy.
- PKF has recovered significant sums, but unsecured creditors’ claims remain substantial.
The legal landscape surrounding Public Interest Lawyers (PIL) saw a significant development following the guilty plea of its founder, Phil Shiner, to three counts of fraud. These charges stemmed from legal aid applications made in cases alleging the mistreatment of Iraqi detainees by British soldiers. This admission now permits the liquidator, PKF Littlejohn Advisory, to declare a dividend to PIL’s outstanding creditors, which include several governmental bodies.
PKF Littlejohn has been at the helm of PIL’s liquidation process since 2017. However, the legal intricacies surrounding the fraud and subsequent financial recovery efforts meant that it was only recently feasible to begin the process of reimbursing creditors. Stratified Hamilton of PKF explained that Shiner’s plea rendered any potential recovery from the Legal Aid Agency unattainable, prompting them to file a claim against Shiner’s bankruptcy estate for the losses inflicted upon PIL.
Shiner’s journey through bankruptcy has been tumultuous, lasting six years until its conclusion in 2023. Originally, the period was to be a single year but was extended by an additional five years in 2018 after it emerged that Shiner had transferred assets worth nearly £500,000 to family members prior to declaring bankruptcy. Despite these setbacks, PKF has managed to recoup over £2.2 million, with a notable £1 million reclaimed from government departments and external entities.
The complexities of this case are heightened by the lack of secured and preferential creditors, leaving PIL with approximately £6.1 million in unsecured creditor claims. Among the payouts already made are priority creditor counsel fees, amounting to £416,000. According to PKF’s latest report, no further declaration of intended dividends can be made until remaining book debts are confirmed as irrecoverable, ensuring accuracy in counsel claims.
In spite of the challenges of this protracted and intricate case, PKF Littlejohn has achieved notable progress, recovering substantial funds and addressing creditor claims. To date, they have incurred fees amounting to £316,500 against the estimated total of £404,000. Additional significant costs include fees of £190,000 for Devonshires solicitors in London and £130,000 for NWL Costs Lawyers. Stratford Hamilton emphasised that the government is one of many victims of Shiner’s fraudulent activities, stating that the firm is committed to liaising with all creditors as they navigate this enduring issue.
The guilty plea by Phil Shiner represents a critical juncture in concluding the complex liquidation of Public Interest Lawyers.
