THE Bishop of Leeds, Rt Revd Nick Baines and the Diocese of Leeds CFO (LDBF) remain in doubt whether money stolen from the diocese by imprisoned attorney Linda Box can be recovered after two court rulings in July and August. via Mrs. Box, a former Diocesan Chancellor of Wakefield and Chancellor of Southwell & Nottingham.
Ms. Box, one of three partners at Dixon, Coles & Gill (DCG) law firm in Wakefield, stole more than £ 4 million from more than 75 client funds and the estate of ten deceased between 2003 and 2016. More than £ 3 million has been spent on American Express cards in their own names and on behalf of their sons.
DCG kept all customer funds in a single account rather than separately, which the court said would have made it easier to identify whose money was stolen whenever Ms. Box was stolen.
The appeals court judges said, “If each customer’s money was in a separate box in the form of gold coins, it would depend on which box of gold coins Ms. Box searched on each occasion. Each customer’s claim would then result from a certain theft of that customer’s money. This can be compared to a single box of gold coins that belong to all of the company’s customers: When Ms. Box dips into the box and takes a handful of coins, who are they? “
She was excluded from the partnership in 2016 after the fraud was uncovered and in 2017 sentenced to seven years in prison for 12 theft, fraud and counterfeit offenses. DCG, which closed in 2016, had a long association with the Church serving the Bishop of Wakefield and the Wakefield DBF. Ms. Box stole £ 65,000 from the Bishop of Wakefield’s fund and more than £ 1 million from the estate of deceased customers.
The Diocese (now Leeds) was among the plethora of clients, including four prominent charities that sued Ms. Box, the law firm, and insurers to get their money back (News, Sept. 4, 2020).
Since then, the insurers HDI Global Specialty SE have paid out £ 2 million: their limit for each individual claim. They have an aggregation clause that treats all claims arising out of a series of related “acts or omissions” as a single claim, thereby asserting that their obligations have been met. Those customers whose claims had not been paid first asked for a judgment as to whether the two remaining shareholders were still liable for breach of trust even though they were not involved in the attempted fraud.
The diocese announced that each of the three partners was the trustee of the money in the customer account and was therefore responsible for what happened to the money in this account on behalf of the diocese.
However, the court ruled on July 20 that a co-trustee should not be treated as a “party or initiate” in the fraudulent breaches of trust of another trustee and that the innocent partners can invoke the statute of limitations, according to which they are not liable for transactions, made more than six years before legal proceedings were initiated. This would rule out claims from theft before September 25, 2012.
Bishop Baines and the LDBF therefore lost this appeal. But the second judgment was in their favor. This was about aggregation: the summary of all claims in one. The judges concluded that Ms. Box’s actions, which had been committed over a number of years, could not be considered one act and that each embezzlement was a separate violation and therefore a separate lawsuit: “These acts have different customers Result in losses. In my opinion, that can’t be a single loss. “
The question now depends on whether the innocent partners are entitled to compensation for the outstanding claims of clients such as Bishop and Leeds DBF.
When sentenced, Ms. Box was asked to repay £ 1,943,045 in three months, or another eight years on top of the seven. Her son Edward, who was not involved in her criminal activities but benefited from more than £ 1 million, was ordered by the Leeds Crown Court to repay that sum in March of this year.
A spokesman for the Anglican Diocese of Leeds said: “We have no comment at this point as the process is ongoing.”