A High Court judge spoke out against the dangers of solicitors acting as bankers this week - in a damning statement in which he criticised a Law Society Council member as being 'grossly negligent'.

Matthew Gauntlett, council member for Berkshire and north Hampshire, and Sarah Beveridge, his former partner at Yateley firm Beveridge Gauntlett, were acquitted of money laundering offences at Southwark Crown Court last week.


However, Laurence Ford, a legal executive at the firm, was given a six-year sentence after the jury found that he had channelled some £200 million in carousel fraud proceeds through the two-partner Hampshire firm - without the solicitors' knowledge.


Mr Justice Rivlin said: 'There is a real concern that any solicitors should be permitted to provide banking services to clients where otherwise there are no legal services being provided. It is fraught with [potential for fraud].'


He added: 'The partners Matthew Gauntlett and Sarah Beveridge were acquitted [because] the jury accepted their case that on any view they were both wholly unsuited to the responsibilities of running a practice on their own. That not merely were they inexperienced, but they were quite out of their depth, neither having the strength of personality to run a firm themselves. They were woefully [unable to] fulfil the responsibility expected of partners.'


He added: 'Mr Gauntlett was said by his own counsel to have been a foolish man, and has been described in less flattering terms by others. He was on any view careless, unprofessional and grossly negligent in the performance of his duties to the practice.'


The judge asked for a copy of his remarks - in particular relating to law firms acting as banks - to be sent to the Law Society. A spokesman said: 'The Law Society is of the view that it is improper for solicitors to act as mere bankers for their clients... the Solicitors Disciplinary Tribunal (SDT) has also consistently viewed it as misconduct for solicitors to act as a conduit for monies without an underlying legitimate purpose.'


The Society has referred Mr Gauntlett and Ms Beveridge to the SDT. They face allegations of unbefitting conduct in permitting their client account to be used for payments where there were no underlying transactions, and failing to supervise their clerk Ford. The Law Society intervened in Gauntlett Beveridge in February 2003.


Mr Gauntlett's lawyer Tom Epps, a partner at Russell Jones & Walker, said his client had been 'exonerated of any criminal complicity in money laundering', and that he denied any suggestion that he had been negligent. He added: 'It is difficult to see how the deliberate and dishonest actions of Ford, in hiding his activities from the partners, can amount to negligence by the partners.'


Sarah Beveridge's solicitor Elizabeth Robertson, a partner at London firm Peters & Peters, said her client 'would not move away from' the judge's comments that she was out of her depth. However, she said Ms Beveridge would be resisting the SDT proceedings, particularly any charge of dishonesty.


Ford's solicitor said he had not yet decided whether to appeal.