• Application 11733-2017
  • Hearing 6-7 March 2018
  • Reasons 13 April 2018

The SDT ordered that the first respondent (registered foreign lawyer) should pay a fine of £12,500; that the second respondent (admitted 2003) should pay a fine of £12,500; and that the third respondent (admitted 2011) should pay a fine of £10,000.

The SDT further ordered that as from 7 March 2018, except in accordance with Law Society permission, no solicitor should employ or remunerate the fourth respondent in connection with his practice as a solicitor; no employee of a solicitor should employ or remunerate him in connection with the solicitor’s practice; no recognised body should employ or remunerate him; no manager or employee of a recognised body should employ or remunerate him in connection with the business of that body; no recognised body or manager or employee of such a body should permit him to be a manager of the body; and no recognised body or manager or employee of such a body should permit him to have an interest in the body.

The first, second and third respondents had made or allowed transfers from the client account to the office account of the firm in excess of funds held on client matters, resulting in debit balances in client account, in breach of principles 2, 6, 8 and 10 of the SRA Principles 2011 and rule 20.06 of the SRA Accounts Rules 2011. They had acted recklessly .

They had failed to carry out proper reconciliations, in breach of rules 29.12 and 29.14 of the rules.

They had failed to give or send a bill of costs or other written notification of costs on at least two occasions before withdrawing money from client account, with the resulting invoices being backdated to when the transfer had been made, in breach of rules 17.2 and 20.3 of the rules.

The fourth respondent had occasioned or been a party to an act or default in relation to legal practices, which had involved conduct on his part of such a nature that it would be undesirable for him to be involved in a legal practice in that he, while remunerated by and under the direction of solicitors in the firm, had allowed debit balances to occur in client account as detailed above and had backdated bills.

The overall seriousness of the first respondent’s misconduct was high because it involved client money. He was the sole equity partner, there was no evidence that he had taken an interest in the financial running of the firm, and he had a previous matter that had involved breaches of the accounts rules.

A financial penalty was sufficient sanction, and his misconduct was assessed as falling within ‘level 3’ of the SDT’s indicative fine bands.

The overall seriousness of the second respondent’s misconduct was high. He had made the actual transfers concerned. At the time he did not appear to have had a grip on the finances of the firm despite the fact that he was managing the business.

A financial penalty was sufficient sanction, and his misconduct was assessed as falling within ‘level 3’ of the SDT’s indicative fine bands.

The overall seriousness of the third respondent’s misconduct was also high. She had been the compliance officer for finance and administration. Yet, at the time, she did not appear to have had an active role in the finances of the firm. She had lacked experience.

A financial penalty was sufficient sanction, and her misconduct was assessed as falling within ‘level 3’ of the SDT’s indicative fine bands.

In making a section 43 order in respect of the fourth respondent, the SDT had in mind the protection of the public and the maintenance of the good reputation of the solicitors’ profession, rather than punishing him. His actions had been misguided.

While it was appropriate to make the order sought, the SDT hoped that the applicant would permit the fourth respondent to be employed in a legal practice. However, it acknowledged that whether or not to grant that permission was entirely a matter for the applicant.

The first, second and third respondents were ordered to pay costs of £15,600, to be paid on the basis of joint and several liability. The fourth respondent was ordered to pay costs of £1,500.