Law firm Harwood has been found liable for losses, damages and costs incurred by insurer Aviva.

Wasim Khan, who had a criminal record, was employed by Harwood as a fee earner with the authority to negotiate claims against insurers and process settlement funds. As an employee of a law firm, it is fundamental that clients and opponents could have confidence in his integrity.

Before his employment with Harwood, he had a string of criminal convictions. By 2020, he 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 clear evidence of criminality, Harwood solicitors employed him in a position of responsibility.

In one case, Khan gave Aviva his own bank details, pretending they were Harwood’s details, 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. He received a total of £21,128.75 from them.

Khan was found guilty in criminal proceedings and sentenced.

After his sentencing Aviva, advised by Alex Wilkinson, Partner and Vicky Barry, Associate of HF, decided 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, Harwood had not protected against him taking the action he did.

At trial, which took place on 7th March 2023, Harwood defended the claim, but it was argued that:

  • They are 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, placing him in a position of trust;
  • It appeared no risk assessment was completed to ensure there was no dishonesty on his part.

Harwood had given Khan unfettered authority to represent them in dealings with insurers and other parties even though they knew he was a dishonest individual – with predictable consequences.

During the trial, Raja Afzal, a director of Harwood and responsible for hiring Khan, declared he had no lessons to learn and would do the same again. He knew about Khan’s previous convictions but did not think they were relevant and he did not consider the SRA principles when offering Khan employment.

Deputy District Judge, Peter Causton, commented 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.”

Carl Mather, Manager, UKGI Special Investigations Unit of Aviva, commented, “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.”

Good Result