Two equity partners at a firm who failed to notify the regulator that £327,000 from a property sale had been paid into the wrong account have each been fined.

The Solicitors Disciplinary Tribunal heard that Nicola Thompson and Ruth Rush, from Hertfordshire firm Bottrills Solicitors, both failed in their obligations to report the matter in March 2018.

The firm had acted for a couple in the sale of a property and received two emails from different addresses on the same day, asking for funds to be paid into different bank accounts.

The payment was arranged to the second emailer, but when the client informed the firm the money had not been received, the payment was recalled. The funds were returned to the firm’s bank account but despite the firm being under a Solicitors Regulation Authority investigation for other matters, no report was made to the regulator of what happened.

Thompson, a solicitor for 23 years, an equity partner since 2006 and the firm’s compliance officer for finance and administration, said that no report was made to the SRA because the money had been recalled. Rush, a legal executive and the firm’s compliance officer for legal practice, offered the same explanation.

The tribunal heard that the property sale issue was one of several rule breaches admitted by both Thompson and Rush about how the firm’s accounts were handled.

Both accepted that they caused or allowed payments out of the client account in excess of the funds held for individual clients. The firm failed to carry out client account reconciliations at least once every five weeks and accounts issues were not reported to the SRA as they should have been.

SRA investigators found 108 client debit balances totalling almost £56,000, which had arisen over more than a year. The longest time the firm had taken to rectify a debit balance was 493 days.

In 17 cases, duplicate payments were made from the client account and all took at least 40 days to rectify.

Thompson admitted in interview that she had no accounts rules training beyond what she had done for her LPC. The firm’s book-keeper had left in 2016 and the ‘migration period’ to a new system took several months.

Thompson, who left in 2019, said she was not as pro-active as she should have been in dealing with what she called a ‘chaotic and disorganised’ firm suffering a poor accounting regime.

Rush said she had been ‘horrified’ by the severity of the breaches and she had made a ‘substantial reduction’ in time devoted to fee earning to rectify the problems.

Thompson was fined £10,000 and Rush £7,501, with both parties agreeing to each pay £14,487.50 costs.