- Publication Date
- 2022-04-14
The SRA conducted an audit which led to the discovery of several issues within the law firm. The findings indicated that the relevant lawyer acted for personal injury clients where there was a significant risk of a conflict between obligations to act in the clients’ best interests and their own financial interests. The clients, unless they already had relevant insurance, were required to take out a particular after the event (ATE) insurance policy for which a separate business received commission on policies taken out between March 2015 and January 2017.
Additionally, the relevant lawyer did not inform clients of the commission received from the sale of ATE insurance policies through the separate business. Money meant for professional disbursements was deposited into the office bank account but was neither used to pay the professional nor transferred to the client bank account between May 2017 and November 2017.
The audit further revealed a failure to ensure proper governance of the law firm, characterized by inadequate systems and controls for monitoring the financial stability of the firm. This led to the firm operating from June 2017 to December 2017 while it was experiencing serious financial difficulties.
As a result of these findings, the relevant lawyer was made subject to a disqualification order preventing them from holding roles such as Head of Legal Practice, Head of Finance and Administration, a manager, or an employee in a licensed body. A financial penalty of £18,000 was directed to be paid.