Money: Client funds held in employee’s bank account
Four partners at a Birmingham law firm have been fined a total of £35,000 by the Solicitors Disciplinary Tribunal (SDT) for failing to keep dealings with client money “properly written up in its books of accounts” for almost six years.
Zain Siddiqi, Afifa Kiran, Nusrat Hussain and Safdar Akhtar, members of Saints Solicitors LLP, agreed that “certain ledgers were inaccurate”, meaning that “a precise comparison of liabilities to clients with cash held in the client bank account could not be accomplished”.
The SDT heard that, in one case, funds were held for a client in the bank account of an employee of the firm.
“The client in question had consented to such a course of action but the firm had not given proper consideration as to why it was convenient to the client and had failed to obtain proper written consent from the client.”
The partners admitted that, by January 2017, two months before Saints Solicitors ceased practising, debit balances totalling just under £29,000 existed on the ledgers of 29 clients.
They also admitted that between for the previous six years, the firm’s books of account were not “properly written up to date”.
Mr Siddiqi, the only one of the four to have been a partner since the law firm was founded in 2006, also admitted to making inaccurate statements on an indemnity insurance proposal form.
Delivering judgment on an agreed outcome between the partners and the Solicitors Regulation Authority (SRA), the SDT said the firm, based in Handsworth, Birmingham, ceased practising in March 2017.
However, all four former members of the firm currently hold practising certificates, subject to conditions.
Mr Siddiqi, born in 1973, was admitted as a solicitor in 2004. Ms Kiran was admitted in 2011 and became a member of Saints in the same year.
Ms Hussain was admitted in 2013 and became a member the same year. Mr Akhtar was admitted in 2013 and became a member the following year.
They admitted that by failing to keep dealings with client money properly written up, they had breached the SRA Principles and Accounts Rules.
By holding cash for a client “otherwise than in the client account”, the four partners of Saints breached further accounts rules, as they did by allowing debit balances of almost £30,000 on client account and failing to write up dealings with office money in relation to client matters.
Mr Siddiqi admitted three offences of making inaccurate statements on an indemnity insurance proposal form, all of them taking place in September 2016.
In mitigation, the partners said they had been “unaware of the scale of the problem” and “remedial steps had been taken by the time of the forensic investigation [in January 2017] although they were not complete”.
The partners said bookkeeping errors had been caused “in significant measure, by the migration of the firm’s accounts from one computerised system to another” and no allegation of dishonesty had ever been made against any of them.
Ms Hussain and Mr Akhtar argued that they did not have “administrative or management duties” and “both were effectively consultants”. The SRA said it had reduced proposed fines to reflect their “lack of involvement and limited authority”, but “strict liability” applied.
Mr Siddiqi admitted he made “genuine errors in completing the insurance proposal form” and, in the first case mentioned, “his error served to increase the premium payable”.
Mr Siddiqi was fined £15,000, Ms Kiran £10,000, Ms Hussain £5,000 and Mr Akhtar £5,000.
They were each ordered to pay £2,000 in costs and made subject to conditions preventing them from being a sole practitioner or manager of a law firm, from handling client money or acting as COLP of COFA.
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