A solicitor is fighting a fine imposed by the Solicitors Disciplinary Tribunal, claiming the watchdog ‘erred in judgment’ when it found he acted improperly when dealing with client money.

Naim Lone, admitted in 1996, is appealing the SDT’s findings, while the Solicitors Regulation Authority is asking the High Court to dismiss the appeal.

Mrs Justice Collins Rice heard that a dispute arose following divorce proceedings in which Lone acted. The client believed they owed fees of £29,000 while Lone said the correct figure was £134,000.

A third-party order was made which stated the disputed sum would remain in Lone’s firm’s client account until the dispute was resolved. The firm closed later that same year after it was unable to obtain professional indemnity insurance cover. As a result, the order could not be fully complied with as the firm’s client account no longer existed.

Lone, who opened a new firm, later faced allegations in relation to two clients at the Solicitors Disciplinary Tribunal.

Some of the allegations before the tribunal related to the money Lone had transferred into his new business account and the client account of 'firm B', which was later the subject of an SRA intervention on grounds of suspected dishonesty.

Lone also allowed ‘person B’ to work or assist on another client’s matter when person B held around £43,000 belonging to the client and failed to take adequate steps to register a legal charge. 

The SDT fined Lone £8,000 and he was ordered to pay £29,359.05 in costs. The tribunal said the fault of the matter lay in Lone’s ‘incompetent execution’ of matters.

The administrative court heard how Lone had submitted 1,000 pages of evidence during his three-day tribunal hearing. Stuart Cutting, for Lone, said: ‘He was a solicitor acting correctly'. The tribunal cleared him of allegations of lack of integrity, he said. Rather, it found he 'had been seriously inept in handling the situation and demonstrated a significant level of incompetence such that large sums of money had been in breach of a court order'.

However the misconduct had been of limited duration, with the money unprotected for only five weeks.  

Cutting said: ‘Firm B was intervened and the principal [person B] was struck off for dishonesty but at the point money was put over, the appellant did not know and had no reason to believe that person B, who he had a relationship with for a number of years on a professional basis, was dishonest or that firm B would be intervened.'

Benjamin Tankel, for the SRA, said that the issue the tribunal was concerned with was risk to client’s money rather than any actual losses. He added: ‘We are a regulator. We have got important public business to get on with including protecting the public. This has been dragging on for two years now. Your ladyship will note that each delay just increases expenditure, time, and resources.’

He added: ‘It is an £8,000 fine. We have had this hanging over our head for two years, proceedings should have been done and dusted a long time ago.

‘How to sanction such misconduct in order to protect the public, Mr Lone chose not to give oral evidence [at the SDT]. The tribunal has the ability to draw adverse inference from that, it did not in this case. This is an appeal, not a retrial.’

Judgment was reserved.