Bills: Firm was not paying what it owed
The HOFA of a consumer claims firm that went bust in 2023 concealed its financial difficulties from the Solicitors Regulation Authority (SRA) in the run-up to its collapse.
Victoria Powell admitted what she had done in a regulatory settlement agreement with the SRA and accepted a disqualification from holding a compliance or managerial role at a law firm in future.
Despite holding a key role at High Street Solicitors (HSS), the SRA said “she demonstrated little knowledge of the financial discussions and arrangements being made at director level, nor did she have a full picture of the firm’s finances and as such failed to make the SRA fully aware of the firm’s true financial position”.
Ms Powell began work at the Liverpool alternative business structure in 2008 as a legal cashier, and later became a finance manager. She became head of finance and administration around November 2021, only to leave in June 2023 when the firm went into administration.
The SRA began an investigation in January 2023 over complaints that HSS was not paying bills.
Ms Powell and one of the firm’s partners told the SRA at a meeting in early February that the firm owed around £4m. However, a schedule of liabilities and loan agreements disclosed later that month showed balances of more than £9m and £17m respectively.
In April, HSS’s solicitors, Pinsent Masons, provided the SRA with a ‘regulatory self-report’ detailing a proposed financial restructuring.
A day after another meeting at the firm that Ms Powell attended, the SRA became aware that HSS had been subject to a winding-up order by a supplier owed more than £340,000 since January 2021, after it failed to satisfy a statutory demand.
This was the second time the supplier had brought a winding-up petition, but none of this information was given to the SRA at either of the meetings.
At another meeting soon after, an SRA officer expressed concern that Ms Powell “didn’t have any idea about what was going on”.
Ms Powell told the SRA during its investigation that at no point did she consider that a report to the regulator was required as she “felt that we would get that back on board and sorted going forwards”.
She accepted that, with hindsight, she should have made a report but stated that she “tried her best” within the role of HOFA.
In the agreement, Ms Powell accepted that she failed to uphold her duties as HOFA during the investigation.
The SRA said she had “demonstrated that she is unsuitable to hold responsibility for compliance roles in a licensed body”, making disqualification “a proportionate outcome in the public interest”.
She also agreed to pay costs of £600.
The report of HSS’s administrators showed that a number of adverse costs awards pushed its insurance premiums up and contributed to its collapse.
It was sold for £340,000 in a pre-pack to Angelus Law, a practice co-owned by HSS’s owner, Tom Hardwick. All 18 staff were made redundant. The SRA then shut down Angelus Law in April 2024.
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