Babatunde Adetona Osibodu and Kolawole Atolagbe

• Application 10812-2011
• Hearing 1 March 2012
• Reasons 2 April 2012

The SDT ordered that the first respondent (admitted 1998) and the ­second respondent (admitted 2000) should each be reprimanded.

The respondents had failed to pay the ­premium due for indemnity insurance for the indemnity years 2009/10 and 2010/11 to Capita (which manages the assigned risks pool on behalf of the Solicitors Regulation Authority) within the prescribed period for payment and were thereby in policy default, in breach of rule 16.2 of the Solicitors Indemnity Insurance Rules 2009 and 2010.

It was clear to the SDT that the respondents had done their best to work their way out of their financial ­difficulties. They had moved premises so that a lower rent would be payable, they had reduced their staff and reduced their drawings, but had eventually been forced to close down their firm. They had made some repayments and it appeared that they had paid the amounts due up to January 2011.

The financial statements and accounts for the practice that had been provided indicated that the practice was not in a good financial position but, nevertheless, the respondents had found the funds to pay something towards the amount due. Their bank manager and a monitoring visit from the SRA had encouraged them to continue the ­business, and the SDT was of the view that an 18-month period was a reasonable time to try and turn around a practice that was struggling financially.

The respondents had been informed by the SRA in April 2011 that the firm should close down, and they had closed the practice shortly thereafter in May 2011, and as soon as efforts to obtain loans to pay the ARP had failed.

The SDT noted from the accounts provided that the indemnity insurance premium had jumped quite significantly in 2010 to over £20,000 when it had previously been £7,500 in 2009. The SDT was satisfied that the respondents had not walked away from their obligations, but that they had been victims of unfortunate financial circumstances. They had been open and honest with the SDT and the SDT had no doubt they would continue to try and repay the outstanding sums due to Capita.

The respondents had also had credible plans to meet their obligations and had specifically been allowed to stay in business and in the ARP in the light of those plans. As soon as it was clear they could not meet those obligations, they had closed the business.

In the ­circumstances of the case, the SDT was satisfied that the appropriate sanction was to reprimand each of the respondents. The respondents were each ordered to pay costs of £1,000, such orders not to be enforced without leave of the SDT.