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The funds were transferred from the caravan business in a deliberate attempt to conceal income by hiding it in a client account. In other words an attempt to evade tax. The correct and appropriate action for the SRA to take should have been to report the respondent to HMRC for tax fraud, however...

I have recently heard from the SRA's legal team after posing the question why they hadn't alleged fraud (or dishonesty) in the Ecohouse case and pursed convictions for fraud in collaboration with the Police. They responded that it was neither necessary nor appropriate to establish fraud against their members - WTF? What the SRA meant is that they didn't want to have to settle a large compensation claim by inferring dishonesty (like it wasn't obvious anyway). The SRA has never conceded the dishonesty of the firm's partners despite a £33,000,000 misappropriation of client funds.

As a consequence of the SRA not alleging dishonesty, none of the solicitors were struck off for their part in the immense fraud. The SRA is deemed to have concealed dishonesty (and so perverted the course of justice) in order to evade a large compensation claim. The SRA is also deemed to have avoided an intervention for the exact same reason - ie. To avoid implying dishonesty. The SRA's failure to intervene meant that client fund misappropriation continued for a further 11 months, dramatically increasing the seriousness of the fraud and causing hundreds more clients to suffer loss.

The SRA's eagerness to evade compensation claims is preventing the regulator from protecting clients from loss and is also preventing the SRA from delivering proper justice. The SRA is hopelessly conflicted between conserving compensation scheme funds and delivering justice and is proving itself unfit and untrustworthy to regulate the solicitor profession effectively. Due to its failure to protect and prosecute adequately, the SRA is in breach of the Legal Services Act 2007.

What use is a regulatory authority that fails to strike off solicitors who have facilitated fraud ? In the meantime the insurance indemnity crisis escalates and more insurance firms collapse due to misconduct giving rise to unsustainable compensation claims.