Application 11666-2017

Admitted 1973

Hearing 12 December 2017

Reasons 12 January 2018

The SDT ordered that the respondent should pay a fine of £2,500, and further that he should, for an indefinite period, be subject to the following conditions: that he might not practise as a sole practitioner or sole manager or sole owner of an authorised or recognised body; be a partner or member of a limited liability partnership, legal disciplinary practice or alternative business structure or other authorised or recognised body; be a compliance officer for legal practice or a compliance officer for finance and administration; hold client money; be a signatory on any client account; or work as a solicitor other than in employment approved by the SRA, with liberty to either party to apply to vary those conditions.

The firm in which the respondent was a partner had received payments in respect of professional disbursements totalling at least £53,634.79 which it had retained in office account, so he had breached rules 19(1)(b) and 21(1)(b) of the Solicitors Accounts Rules 1998, rules 1.02 and 1.06 of the Solicitors Code of Conduct 2007, rules 17.1(b) and 19.1(b) of the SRA Accounts Rules 2011, and principles 2, 6 and 10 of the SRA Principles 2011. He had acted recklessly.

The respondent had failed to keep the accounting records of the firm properly written up at all times, in breach of rule 32(1) of the 1998 rules and rule 29.1 of the 2011 rules. He had acted recklessly.

By failing to remedy breaches promptly upon discovery, he had breached rule 7.1 of the 1998 rules and rule 7.1 of the 2011 rules. 

He had failed to deliver accountant’s reports in relation to the firm for the accounting periods to 31 March 2015 and 31 March 2016 to the SRA, in breach of rule 32.1 of the 2011 rules.

By failing to run the business effectively, he had breached rule 1.2(e) of the 2011 rules and principle 8, and failed to achieve outcomes (7.2) and (7.4) of the SRA Code of Conduct 2011.

While acting as the COLP and the COFA of the firm, he had failed to report as soon as reasonably practicable material failures to comply with obligations imposed upon it by the principles and 2011 rules, and had thereby breached rules 8.5(c)(iii) and 8.5(e)(iii) of the SRA Authorisation Rules 2011, and principle 7 of the SRA Principles 2011, and failed to achieve outcome (10.1) of the 2011 code. 

By failing to notify the SRA promptly that the firm was in serious financial difficulty following service of a statutory demand by HMRC claiming a debt of £230,035.54, he had breached principle 7 and failed to achieve outcome (10.03). 

The respondent’s culpability was significant. There had been a direct impact on the individuals who had not been paid what they were owed.

Having regard to the mitigation and all the circumstances of the case, the respondent did not require to be removed from practice. The appropriate sanction was a financial penalty of £12,500. In view of the very limited state of the respondent’s finances, the fine was reduced to £2,500.

Although the respondent intended to retire from practice, it was necessary to impose restrictions for an indefinite period on him, in case he should change his mind.

The respondent was ordered to pay costs of £2,000.