A firm has agreed to pay the Solicitors Regulation Authority’s costs of £35,000 in a case where the fines totalled just one tenth the sum.
North London firm YVA Solicitors agreed with the regulator that it should pay a fine of £2,500 after holding onto funds in the client account and then sanctioning seven payments not related to the delivery of legal services. Two partners with the firm, Christopher Yiannakas and Nicholas Kephalas, were each fined £500.
Proceedings were brought before the Solicitors Disciplinary Tribunal despite the eventual outcome being well within the SRA’s fining powers. The regulator had initially proposed that the partners should each be reprimanded rather than fined, but their sanction was upgraded by the tribunal, which had invited them to propose an appropriate sum.
The tribunal heard that £12,800 was retained in the firm’s client account following a commercial property sale in 2022, even where there was no longer any proper reason to hold onto the money. The partners and the firm admitted breaching accounts rules.
The SRA had received a qualified accountant’s report from the firm in 2022 referring to breaches of the rules. An investigation followed, culminating in an agreement that the sum was held while the firm awaited instructions and the client established a new banking facility.
In non-agreed mitigation, YVA and the partners said they regretted the admitted breaches and stated that the firm had invested heavily and taken significant steps to prevent any repetition. Steps include an enhanced training programme, a stricter approval process for opening accounts and a register tracking key details and review dates for each client account.
Every action taken by the partners and firm was on the instruction and knowledge of the underlying clients who also received payment of interest on the money held in the designated deposit client account.
The SRA withdrew allegations before the tribunal relating to the refinancing of a further £335,000. There was no explanation of why the SRA's costs were so high.
