• Application 11500-2016
• Hearing 11 October 2016
• Reasons 18 November 2016
The SDT ordered that the first respondent (admitted 1996) should pay a fine of £4,000; that the second respondent (admitted 1994) should pay a fine of £1,000; and that the third respondent (admitted 1987) should pay a fine of £4,000.
Between August 2014 and March 2015, the respondents had made withdrawals from client account and transfers from client to office account in excess of funds held on 19 client matters, resulting in debit balances in client account amounting to £13,370.83, and had thereby breached rule 20.06 of the SRA Accounts Rules 2011.
The respondents had failed to carry out the client account reconciliation for February 2015, in breach of rule 29.12 of the rules.
The respondents had failed to notify the SRA promptly that they were in serious financial difficulty in being unable to pay various taxes due to HM Revenue & Customs for 2012-2014 totalling £380,778.99, which had culminated in a winding-up petition being presented by HMRC on 25 September 2014. In so doing, they had failed to achieve outcome 10.03 of the SRA Code of Conduct.
During the course of an investigation by the Legal Ombudsman into a complaint made by Mr BK, which had commenced in about June 2014, the first and third respondents had failed to deal with the ombudsman in an open, timely and cooperative manner, in breach of principle 7 of the SRA Principles 2011.
During the course of an investigation by the ombudsman into a complaint made by the client Ms CH, which had commenced in about September 2014, the first and the third respondents had failed to deal with the ombudsman in an open, timely and cooperative manner, in breach of principle 7.
The first respondent had failed to provide a proper standard of service to his client Mr EP, the executor of the estate of Mr MFL, in that he had failed to keep Mr EP informed of the status of the estate over a period of approximately three years and nine months, and long delays were encountered with the administration of the estate, and in so doing he had breached principle 5.
While the first respondent was not the complaints partner of the firm at the material time, he should have taken steps to ensure that a proper standard of service was provided to Mr EP, who had made many attempts over a very long period of time to contact the first respondent regarding his matter.
A fine of £4,000 was the appropriate and proportionate sanction in his case and would adequately reflect the seriousness of the misconduct while maintaining the reputation of the profession.
The second respondent had made admissions relating to the accounts breaches on a strict liability basis, and had admitted the failure to notify the SRA promptly that the firm was in financial difficulty. It was accepted that she had been going through difficult personal circumstances at the time. The appropriate and proportionate sanction which would reflect her misconduct was a fine of £1,000.
As the third respondent was the complaints partner of the firm, he had the responsibility and obligation to obtain the files and could and should have taken a proactive approach on the issues in question. He could have investigated matters himself and/or arranged for the transfer of the files to other fee-earners. The appropriate and proportionate sanction in relation to him was a fine of £4,000.
The first and second respondents were ordered to pay costs of £8,000 on the basis of joint and several liability, not to be enforced for 12 months, save that the applicant might apply for a charging order in respect of any property owned by the first or second respondent.
The third respondent was ordered to pay costs of £4,000.