• Application 11495-2016

• Hearing 4 October 2016

• Reasons 21 October 2016

The SDT ordered that the first respondent (admitted 1982) should be struck off the roll; and that the second respondent (admitted 2000) should pay a fine of £10,000.

The respondents had transferred a total of £38,244 in relation to professional disbursements for counsel’s fees, mediator’s fees and translation fees, from the firm’s client account to the firm’s office account between 31 October 2014 and 6 November 2014; had incorrectly retained the money in the office account until at least 5 December 2014; and had paid those who were entitled to the money between 5 December 2014 and 5 February 2015. In so doing they had: breached rules 7, 17.1(b)(ii) and 20 of the SRA Accounts Rules 2011 and, further, the first respondent had breached principles 2 and 6 of the SRA Principles 2011.

The respondents had improperly transferred £53,000 from client account on 7 November 2014 to the office tax reserve bank account and had utilised that money to pay the first respondent’s indebtedness to HM Revenue & Customs of £71,859.07 on 7 November 2014, and in so doing they had: breached rules 7 and 20 of the rules; and, further, the first respondent had breached principles 2 and 6; and acted dishonestly.

The respondents had transferred £60,000 from client account on 6 November 2014 to the office account, of which £22,455 was money which should have been used for the payment of counsel’s fees, but had utilised £20,000 of that money towards paying the first respondent’s indebtedness to HMRC of £71,859.07 on 7 November 2014. In so doing they had: breached rules 7 and 20 of the rules; and, further, the first respondent had breached principles 2 and 6; and acted dishonestly.

The respondents had made an unallocated transfer from client bank account to office bank account in the sum of £27,322.81 on 7 November 2014, which was not allocated to any individual account(s) in the client ledger(s) but was recorded on a ledger headed ‘SUSPENSE’. In so doing they had: breached rules 7 and 20 of the rules; and, further, the first respondent had breached principles 2 and 6; and acted dishonestly.

The respondents had made an unauthorised transfer from client bank account to office bank account in the sum of £6,000 on 25 September 2014, which was utilised to pay the firm’s professional indemnity insurance, the firm’s rent and the firm’s credit card bill. They had thereby: breached rules 7 and 20 of the rules; and, further, the first respondent had breached principles 2 and 6; and acted dishonestly.

The respondents had made improper transfers from client bank account to office bank account between 6 August 2014 and 30 December 2014 and had thereby breached principle 8.

The misconduct had arisen as a direct result of the first respondent’s deliberate and conscious actions to improperly utilise client money for the benefit of the firm. His conduct was aggravated by his dishonesty. There were no exceptional circumstances. The appropriate and proportionate sanction was to strike the first respondent off the roll.

The second respondent was strictly culpable for the breaches by virtue of rule 6 of the rules, which provided that, as a partner in the firm, he was responsible for ensuring compliance with the rules. The appropriate and proportionate sanction for the second respondent was a fine of £10,000.

The first respondent was ordered to pay costs of £17,293. The second respondent was ordered to pay costs of £5,764.