A national firm fined £160,000 by the Solicitors Regulation Authority has blamed legacy issues from the businesses it had acquired. The regulator today announced it had sanctioned Taylor Rose Limited after the firm failed to reconcile items in the main client account and failed to promptly return money to clients.
The firm subsequently entered a compliance plan with the SRA and had met the targets to bring its accounts into line by August last year.
In a statement, the firm said the issues round bank reconciliations and residual balances primarily related to the acquisitions of Breeze & Wyles and McMillan Williams, both of which had entered administration.
A spokesperson for Taylor Rose said: ‘While the issues predominantly stem from cases taken on with acquisitions of other firms between 2018 and 2020, we fully accept that we didn’t adequately deal with these issues at the time, partially due to a number of external factors impacting the capacity of our finance team. They have now been fully resolved, and we have since put robust procedures in place to ensure strong governance of these matters.’
Under the SRA accounts rules, client money must be returned to the client as soon as there is no longer any proper reason to retain it. Firms must complete a reconciliation of all client accounts every five weeks and should promptly investigate and resolve any anomalies. Any serious issues should be reported to the SRA.
The regulator’s investigators established that from 2022 to 2025 Taylor Rose failed to have in place effective systems and controls to ensure compliance. It also failed to promptly return client money from 2018 to 2025. Possible breaches of the accounts rules were not promptly reported.
The conduct was found to have continued for longer than was reasonable and the SRA deemed that the fine should be up to 0.3% of annual turnover. This was reduced by 30% to take account of the firm’s apology, remorse and remedial action. The regulator was able to exceed its £25,000 fining limit because Taylor Rose is an alternative business structure. There was no loss to clients and a low risk of harm.
Taylor Rose said its strengthened financial compliance team has put in place robust procedures to prevent any future issues across the whole business, including companies it has acquired and integrated. Reconciliations are now undertaken daily, thanks to a new case management system, and will be automated with stronger controls in place. The firm has also restructured its finance team to put greater focus and tighter controls on residual balances.
