- Publication Date
- 2023-10-05
The Solicitors Regulation Authority (SRA) conducted an investigation after receiving two reports from the law firm in September 2021 and October 2021. The investigation identified areas of concern regarding the firm's compliance with the Solicitors Accounts Rules from 1998, 2011, and 2019, as well as the Solicitors Code of Conduct from 2007 and 2011, and the Code of Conduct for Firms 2019.
The investigation revealed that the law firm did not have or failed to implement adequate procedures to manage residual client balances on inactive or closed matters. Additionally, the firm used processes that did not correctly identify and allocate unidentified receipts in the client account and utilized its client account as a banking facility. The firm also retained rent deposits in the client account even when it no longer provided legal services connected to those deposits.
The law firm admitted that from July 2008 to around October 2021, it failed to have or implement adequate procedures for dealing with residual client balances on inactive or completed matters, leading to a total of £104,966.68 being held in the client account by October 2021.
The SRA decided that the law firm had to be accountable for these compliance failures, given that the continued misconduct could have potentially caused harm to clients or third parties despite there being no lasting significant damage. Consequently, disciplinary actions were taken including the imposition of a fine.
The SRA reported that the law firm had taken several mitigation measures: - The law firm self-reported its conduct to the SRA. - It showed remorse for the inadequacy of its compliance systems and processes. - In October 2021, the law firm implemented a Financial Compliance Action plan and established a Task Force to oversee the process and improve the firm’s financial compliance quality. - The firm provided regular updates to the SRA regarding its progress with the Action Plan. - It undertook a review of its compliance policies and procedures and provided training to staff to raise awareness about the SRA Accounts Rules. - The law firm fully addressed the issues identified in their report.
These actions were monitored by the SRA, who received regular updates about the firm's progress in executing its Action Plan.