Money: $4.1m passed through firm’s accounts
A specialist sports law firm has been fined £36,000, and its COFA rebuked, for allowing its client account to be used as a banking facility.
Onside Law self-reported to the Solicitors Regulation Authority (SRA) about $4.1m that was paid into and out of its client account in July 2021 on behalf of a long-standing corporate client.
According to a notice published by the SRA yesterday, the firm did “very little work” for the client on the sale of its minority shareholding in another company – insufficient to justify the money passing through its client account.
“The firm had subsequently become aware that some of this money did not belong to its client but had been received for and paid out to a third party (for whom it did not act),” the SRA said.
Simon Thorp is both Onside Law’s COFA and the partner responsible for the file. He was rebuked for failing to ensure that he and others complied with the accounts rules.
“The failure to meet the SRA’s standards arose from a lack of knowledge which Mr Thorp should or could reasonably be expected to have acquired,” the SRA said.
“This was not a minor breach of the rules. Mr Thorp had a serious responsibility, as COFA, to ensure compliance.
“He failed to do so and as a result, the firm allowed its client account to be used to transact money in circumstances where it had not provided sufficient regulated services, or where it had no contract whatsoever with the individual to whom the money belonged.”
Mr Thorp knew that he had done “very little work and had only billed the client a small amount”, the notice went on.
“He could and should have known that this meant there was a considerable risk in allowing the client to pay money through the firm’s client account”.
In deciding to fine Onside Law, the regulator said the findings were “of greater than moderate seriousness”.
“The firm’s conduct involved breaches of principles and rules which were designed to mitigate misuse of the client account and encourage and protect the trust in the profession.”
In mitigation, it said, there was no evidence of lasting harm, it was an isolated incident and the firm had expressed insight.
The financial penalty was set at 0.8% of Onside Law’s domestic turnover and reduced by 30% in recognition of the fact that the firm had self-reported, co-operated and made some admissions in respect of the allegations.
This led to a figure of £36,517, plus costs of £600. As Onside Law is an alternative business structure, the £25,000 cap on fines for traditional law firms does not apply.
The SRA said a rebuke for Mr Thorp was “sufficient to uphold public confidence in the profession and maintain professional standards”.
Leave a Comment