Decisions

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

While in practice as a solicitor, manager and owner at Grazing Hill Ltd, the respondent had made improper transfers of funds totalling £230,000 from: (i) the firm’s client account into her personal account; and (ii) her personal account into a purported investment scheme, thereby breaching principles 2, 4, 6 and 10 of the SRA Principles 2011, and rules 14.1 and 20.1 of the SRA Accounts Rules 2011.

The respondent had drafted and entered into a ‘Financial Loan Agreement’ with STK in circumstances where there was an own-interest conflict or a significant risk of an own-interest conflict, thereby breaching principles 2, 4 and 6, and failing to achieve outcome 3.4 of the SRA Code of Conduct 2011.

The respondent had failed to repay client monies owed to STK in a timely manner, thereby breaching principle 4 of the 2011 Principles, rule 7.1 of the SAR 2011, principle 7 of the SRA Principles 2019, and rule 6.1 of the SRA Accounts Rules 2019.

The respondent had provided misleading and/or inaccurate information to the firm’s professional indemnity insurers, prior to inception of the policy for the year beginning 1 April 2020, in that she had failed to disclose the circumstances of the loss of STK’s funds and STK’s demands for repayment, thereby breaching principles 2, 4 and 5 of the 2019 Principles. The respondent had acted dishonestly.

The respondent had failed to make an accurate and/or timely report to STK of the loss of £230,000 of his funds, thereby breaching principles 2, 4 and 6 of the 2011 Principles, and failing to achieve outcome 1.16 of the 2011 Code. The respondent had acted dishonestly.

The SDT accepted that the respondent had not intended to harm the client but it was reasonably foreseeable that harm would result from a high risk investment which she was not qualified to advise on or to make. There were aggravating factors in the case: dishonesty had been found proved in respect of two allegations. The misconduct had continued over a period of time and was deliberate, calculated and repeated in terms of the lies which she had told the client about the whereabouts of his money.

Having regard to the number and seriousness of the allegations found proved, particularly the allegations of dishonesty, none of the lesser penalties than strike-off would be appropriate.

The respondent was ordered to pay costs of £52,686.

The SDT ordered that the first and second respondents should each pay a fine of £8,000.

While in practice as the owners and partners at Winters and Co Solicitors the respondents had breached the approval of an employment decision dated 30 April 2018, by permitting OW (their son) to undertake work outside the scope of the approval, thereby breaching principles 2, 6 and 7 of the SRA Principles 2011, and principles 2 and 5 of the SRA Principles 2019. The allegation was alleged separately as against the first and second respondent.

The parties had invited the SDT to dispose of the matter by way of approval of a statement of agreed facts and proposed outcome.

The respondents had both made full admissions to the allegations and the SDT was satisfied that those admissions had been properly made.

They had admitted to acting without integrity. The matter had been hanging over their heads since October 2019. They were both in the latter stages of their careers, having previously had 40 and 43 years of exemplary conduct. The financial impact of the fines and costs was significant. The stigma of the matters was hardly the way they had wanted to end their careers. It was not a dishonesty case.

The two solicitor members of the tribunal were satisfied that the proposed sanction met the seriousness of the misconduct. The majority did not consider that the misconduct was so serious as to require a suspension and agreed that it fell within the ‘more serious bracket for a financial penalty’.

The lay member of the tribunal considered that the matters were of a greater level of seriousness than was reflected in the proposed sanction. A section 43 order relating to the respondents’ son had been made because he had been found to have acted dishonestly. He had been fortunate to be granted permission to work in a firm following that order, and there were strict rules in place which governed his employment. It was the responsibility of the respondents to be meticulous in ensuring the rules were complied with.

The risk of harm was high and in view of the fact that the person being supervised was the son of both respondents, the harm to the reputation of the profession was especially significant.

The lay member was of the view that the only appropriate sanction was a short period of suspension.

The respondents were ordered to pay costs of £12,000, to be paid on the basis of joint and several liability.

The SDT ordered that the first respondent should pay a fine of £5,000, and that the second respondent should pay a fine of £7,501.

The first respondent had failed to ensure the prompt return of client funds from the proceeds of sale of two property transactions, as soon as there was no longer any proper reason to retain those funds, in breach of rule 14.3 of the SRA Accounts Rules 2011.

In respect of the sale of a property at 7A Oxxxx Terrace, the first respondent had authorised payment of the proceeds of sale to third parties in circumstances amounting to the provision of a banking facility in breach of rule 14.5 of the rules, and principle 6 of the SRA Principles 2011.

As COLP, COFA, MLRO and sole principal of the firm, the first respondent had failed to run the business in accordance with proper governance and sound financial and risk management principles, in breach of principle 8.

The second respondent had failed to conduct adequate client due diligence and/or ongoing anti-money laundering and risk assessment checks in respect of the sales of 7A Oxxxx Terrace and 12 Cxxxx Avenue, thereby breaching principles 6 and 8.

In respect of 7A Oxxxx Terrace and of 12 Cxxxx Avenue the second respondent had failed to ensure the prompt return of client funds from the proceeds of sale, as soon as there was no longer any proper reason to retain those funds, in breach of rule 14.3 of the rules.

In respect of the 7A Oxxxx Terrace transaction, the second respondent had initiated payment of the proceeds of sale to third parties in circumstances amounting to the provision of a banking facility in breach of rule 14.5 of the rules, and principle 6.

The parties submitted an agreed outcome proposal for approval by the SDT, out of time. The SDT was persuaded to allow the proposed agreed outcome to be considered, on the basis that it would be unfair to the respondents, who were not at fault in any way for the delay, to do otherwise.

The SDT was satisfied that the admissions made by each respondent had been properly made and were supported by the evidence.

It was satisfied that the parties had correctly identified all the relevant factors present in the misconduct. The proposed sanctions reflected the fact that the actions of the first respondent were ‘moderately serious’, whereas those of the second respondent were ‘more serious’, albeit at the lowest end of that scale.

The SDT was therefore content to approve the sanctions proposed in respect of each respondent. The first respondent was ordered to pay costs of £9,723, and the second respondent to pay costs of £12,500.

On 10 March the Adjudication Panel resolved to intervene into the above-named Heselwood & Grant Solicitors Ltd, based at 4A Clifton Square, Lytham St Annes FY8 5JP. The intervention was effected on 14 March.

The grounds of intervention in relation to Heselwood & Grant Solicitors Ltd:

• Heselwood & Grant Solicitors Ltd entered into administration on 29 October 2021 which is a relevant insolvency event (paragraph 1(2)(c) of Schedule 14 to the Legal Services Act 2007).

Chris Evans of Lester Aldridge LLP, Russell House, Oxford Road, Bournemouth BH8 8EX (email: enquiries@LA-Law.com) has been appointed as the Society’s agent.