Decisions

 

The Solicitors Disciplinary Tribunal ordered that the respondent should be suspended from practice as a solicitor for six months to commence on 3 May 2022. Upon the expiry of that fixed term of suspension, she should be subject to conditions imposed by the SDT as follows. She might not: act as a manager or owner of a firm; act in any management or compliance role, including as a compliance officer for legal practice, compliance officer for finance and administration or money laundering reporting officer for any authorised or recognised body; or hold or receive client money, or act as a signatory to any client or office account, or have the power to authorise transfers from any client or office account, with liberty to apply to the SDT to vary those conditions.

The SDT had reviewed all the material before it and was satisfied on the balance of probabilities that the respondent’s admissions had been properly made.

The SDT considered that the misconduct was such that the respondent ought to be immediately removed from practice in order to protect the public and the reputation of the profession. She was aware that she was in breach of her obligations as regards the management of the accounts. Notwithstanding that knowledge, she had breached further obligations by failing to report the accounting breaches and other failures to the Solicitors Regulation Authority. Her conduct had caused harm to clients and staff, and had caused harm and distress to bereaved family members. The SDT noted that she had made admissions, and also noted the medical evidence upon which she relied.

The SDT considered that in all the circumstances, the appropriate sanction was to suspend the respondent for a period of six months, and thereafter to impose conditions upon her practice so as to protect members of the public from any risk of future harm by her. The tribunal considered that, given the serious nature of the misconduct, the conditions should be imposed indefinitely. If she were, at some future date, able to demonstrate that she no longer posed any risk such that some or all of the conditions were no longer necessary, she was at liberty to make an application to the tribunal to vary or remove some or all of them.

The respondent was ordered to pay costs of £15,000.

The SDT ordered that the respondent should be struck off the roll.

While in practice as a solicitor at Morgan Mark Solicitors, between around 8 July 2019 to 20 August 2019, the respondent had caused or allowed improper transfers of at least around £198,000 from the firm’s client account, thereby breaching rule 20.1 of the SRA Accounts Rules 2011; and breaching principles 2, 4, 6 and 10 of the SRA Principles. He had acted dishonestly.

Between around 8 July 2019 to 20 August 2019, he had caused or allowed all or part of the clients’ money referred to above to be misused and/or misappropriated, thereby breaching principles 2, 4, 6 and 10. He had acted dishonestly.

The SDT had found dishonesty proved in relation to the allegations with regard to numerous transactions over a six-week period in 2019. No exceptional circumstances had been advanced by the respondent to explain his misconduct, nor were any exceptional circumstances evident on the papers.

Given the seriousness of the misconduct, the fact that the respondent was solely culpable, the serious harm caused to numerous clients and the amount of client monies misused and/or misappropriated, the overarching public interest required that the respondent should be struck off the roll.

The respondent was ordered to pay costs of £25,314.

The SDT ordered that the respondent should pay a fine of £15,000.

While in practice as a solicitor of Kenwright Lynch LLP and while in the positions of COLP, COFA and MLRO of the firm:

• Between 2 April 2001 and 15 May 2018, the respondent had allowed the firm’s client account to be used as a banking facility for third parties otherwise than in respect of instructions relating to an underlying transaction or to a service forming part of her normal regulated activities, contrary to the principle that a solicitor is not a bank and should not use their client account as a banking facility, and had also acted contrary to rule 14.5 of the SRA Accounts Rules 2011, thereby breaching rule 1(d) of the Solicitors Practice Rules 1990, rule 1.06 of the Solicitors Code of Conduct 2007, and principle 6 of the 2011 Code of Conduct.
• Between 2 September 2002 and 22 October 2013, she had caused or allowed cash shortages to arise on the client account, thereby breaching rules 1(c) and 7.1 of the Solicitors Accounts Rules 1998; rules 1.01(c) and 1.01(d) of the 1990 rules; rules 1.04 and 1.06 of the 2007 code; rules 1.2(c) and 7.1 of the 2011 rules; and principles 6, 8 and 10 of the 2011 principles.
• Between 14 July 2008 and March 2019, the respondent had caused or allowed the firm inappropriately to hold residual balances and/or had failed to promptly inform clients in writing of the amount of client money retained, thereby breaching rules 15.3 and 15.4 of the 1998 rules; rules 1.04, 1.05 and 1.06 of the 2007 code; rules 14.3 and 14.4 of the 2011 rules; and principles 4, 5, and 6 of the 2011 principles.

The parties had invited the SDT to deal with the allegations against the respondent in accordance with a statement of facts and agreed outcome.

The SDT had reviewed all the material before it and was satisfied on the balance of probabilities that the respondent’s admissions had properly been made.

The respondent had used her client account as a banking facility for an extended period of time, thereby placing client funds at risk for the benefit of her family members. In mitigation, there had been no actual loss to any clients and the misconduct was not deliberate. All shortfalls on client account had been remedied within a short time of their discovery.

The misconduct was not such that the respondent’s ability to practise should be suspended, removed or otherwise restricted. The appropriate sanction was a financial penalty, and a fine of £15,000 appropriately reflected the seriousness of the misconduct.

The respondent was ordered to pay costs of £20,000.

On Monday 9 May 2022, the SRA intervened into the recognised body, John W Davies Legal Ltd, formerly of

27 Bridge Street, Newport NP20 4BG and Unit 1b, Beaufort Park Way, Chepstow NP16 5UH, and into the practice of Danielle Evans at John W Davies Legal Ltd.

The grounds of intervention into Evans’ practice were:

• It was necessary to intervene to protect the interests of clients and/or former clients and any beneficiaries of any trust of which Evans is or was a trustee – paragraph 1(1)(m) of Schedule 1 to the Solicitors Act 1974 (as amended).
• The grounds of intervention into John W Davies Legal Ltd were:
• A resolution for the voluntary winding-up of the firm was passed on 17 March 2022 without a declaration of solvency under section 89 of the Insolvency Act 1986. This is a relevant insolvency event in relation to the firm – paragraph 32(1)(c) of Schedule 2 to the Administration of Justice Act 1985.
• It was necessary to intervene to protect the interests of clients and/or former clients of the firm – paragraph 32(1)(e) of Schedule 2 to the Administration of Justice Act 1985 (as amended).

Evans’ practising certificate was not affected by the intervention.