A law firm owner who admitted she lacked knowledge of the accounts rules has been fined after a five-figure shortfall was found in the client account.
Danielle Louise Shawcross, a solicitor and sole principal of Cheshire firm DLS Legal Services Limited, admitted that she placed her trust in her appointed bookkeeper and that her knowledge of the rules around reconciliations had ‘massive holes in it’.
She agreed that there was a client account shortage of almost £41,000 by September 2018, less than two years after the firm started trading. The firm failed to keep proper accounting records, made incorrect client to office account transfers and held client money incorrectly in the office account.
Shawcross and the Solicitors Regulation Authority agreed to a fine of £5,000. Rubber-stamping the decision, the Solicitors Disciplinary Tribunal made it clear that there were no allegations of dishonesty or lack of integrity, and no harm or even inconvenience was caused to clients.
Shawcross, admitted in 2013, agreed that she did not fully understand the system for reconciling ledgers. The firm had received client money totalling £24,477 into the office account on 67 matters. However, it had recorded the receipts incorrectly on the client side of the ledgers and the wrong balances were shown.
All but £737 of the shortfall was remedied by November 2018 but the shortfall was not fully remedied in full until June 2019. The SRA said the shortfall and the breaches continued longer than they should have, and that Shawcross was responsible for compliance with the rules and for remedying any issues, even if they were caused by a system put in place by her bookkeeper.
Shawcross said she had ‘taken extensive steps and incurred significant costs’ in rectifying the issues, including instructing accountants to rewrite the books from day one and undergoing training to fill the gaps in her own knowledge. She agreed to pay £10,000 costs in addition to the fine.
