• Application 11686-2017
  • Hearing 29 January-1 February 2018
  • Reasons 26 February 2018

The SDT ordered that the first respondent (admitted 1975) should pay a fine of £15,000. It made no order in respect of the second, third and fourth respondents (admitted, respectively, 1985, 1979, 1989). It ordered that the fifth respondent (a firm) should pay a fine of £35,000.

Between 27 July 2009 and 11 April 2012, the first respondent had facilitated the receipt of payments into, and caused payments to be made out of, the client account of the fifth respondent on behalf of Mr A which were unrelated to any underlying legal transaction, contrary to guidance note (ix) to rule 15 of the Solicitors Accounts Rules 1998 and in breach of rule 14.5 of the SRA Accounts Rules 2011.

Between 12 April 2012 and 27 January 2015, the first respondent had facilitated the receipt of payments into, and caused payments to be made out of, the client account of the fifth respondent on behalf of Mr A which were unrelated to any underlying legal transaction. At the time that each of those payments were made he knew that its making was prohibited by the rules, and had thereby breached principles 2, 6 and 8 of the SRA Principles 2011 and rule 14.5 of the rules.

Between 27 July 2009 and 5 November 2012, the second respondent had facilitated the receipt of payments into, and caused payments to be made out of, the client account of the fifth respondent on behalf of Mr A which were unrelated to any underlying legal transaction, contrary to guidance note (ix) to rule 15 of the Solicitors Accounts Rules 1998 and in breach of rule 14.5 of the 2011 rules.

Between 28 March 2011 and 28 May 2014, the third respondent had facilitated the making of payments from the client account of the fifth respondent on behalf of Mr A and companies with which he was associated which were unrelated to any underlying legal transaction, contrary to guidance note (ix) to rule 15 of the Solicitors Accounts Rules 1998 and in breach of rule 14.5 of the 2011 rules.

Between 28 April 2014 and 28 July 2014, the fourth respondent had facilitated the making of payments from the client account of the fifth respondent on behalf of Mr A, which were unrelated to any underlying legal transaction at the request of the first respondent and/or M, in breach of rule 14.5 of the 2011 rules.

Between 1 April 2011 and January 2015 payments were received into, and made out of, the fifth respondent’s client accounts on behalf of Mr A and companies with whom he was associated which were unrelated to any underlying legal transaction, in breach of guidance note (ix) to rule 15 of the 1998 rules and rule 14.5 of the 2011 rules.

From 12 April 2012 until 18 February 2015, the fifth respondent had failed to put in place any, or any adequate, measures to prevent the first respondent providing Mr A with a banking facility through its client accounts and had thereby breached and/or failed to achieve principle 8 and outcomes O(7.2) and O(7.3) of the Solicitors Code of Conduct 2011.

The first respondent’s motivation for his misconduct was his desire to keep Mr A happy, by continuing to provide him with services that were in breach of the accounts rules.

His misconduct was such that a reprimand was not a sufficient sanction. However, it was not so serious that it required his removal from practice for a definite or indefinite period. Accordingly, the proportionate sanction in his case was a financial penalty.

The allegations against the second, third and fourth respondents had been proved on a strict liability basis. There had been no intention by any of them to breach the relevant accounts rules. Their culpability was so low that it would be unfair and disproportionate to impose a sanction.

The fifth respondent’s level of culpability was high. The inadequacy of its systems had enabled the first respondent to continuously breach the accounts rules and, to some extent, was responsible for the appearance of the second, third and fourth respondents before the SDT.

The first respondent was ordered to pay costs of £24,300 and the fifth respondent costs of £46,950.