SRA: involvement with firm not disclosed to insurer
Tribunal judgments in the cases of two non-lawyers involved in the finances of defunct law firm Cobbetts LLP have been published, marking the latest chapter in the disciplinary aftermath of the failure.
The Solicitors Disciplinary Tribunal approved agreed outcomes with the Solicitors Regulation Authority (SRA) relating to allegations against James Michael Boyd, the firm’s former financial director, and Stephen Thornton, its former partnership tax accountant.
Earlier this month six former leaders of Cobbetts were fined by the tribunal for their actions as the firm went under, before it was sold in a pre-pack deal to national firm DWF in February 2013.
Mr Boyd, a member of the firm, who was still working at the time of its administration, admitted that he was responsible individually for providing misleading information, and/or for failing to provide material information, to the SRA about the status of a bank loan.
He had been told by the bank’s broker that a loan had been refused, although the bank continued to reconsider it after being told that the firm’s position had changed.
Under the agreed outcome, it was agreed that Mr Boyd should pay a fine of £8,500 and costs of £10,000.
In mitigation, Mr Boyd said his admitted failures had not been “deliberate or intentional”, that he had an unblemished professional career and reputation, and that he had been overworked and was suffering from a “worrying illness” at the time.
Further, he said that following the firm’s failure he had found it hard to find employment, and his marriage had ended in divorce.
Meanwhile Mr Thornton, who was not a member of the firm, admitted only that he had failed to ensure that Cobbetts’ indemnity insurance proposal form included comprehensive information about the SRA’s involvement at the time it was signed in August 2012.
The form, which was submitted to the firm’s insurer, Libra, contained incorrect information and did not disclose the SRA’s ongoing supervision.
In mitigation, Mr Thornton said he was entitled to rely on the firm’s risk partner for compliance with the disclosure requirements of the form.
Mr Thornton was ordered to pay a fine of £2,500 and costs of £3,000. The tribunal held this was “appropriate and proportionate having regard to his level of culpability”.
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