Bookkeeper Banned For Causing Major Deficit

| General

In mid-November 2022 news emerged of a ruling handed down by the Solicitors Regulation Authority in which it decided to ban a professional bookkeeper, employed by a legal services provider and was given personal responsibility for payments on behalf of the organisation, from working in the legal profession indefinitely regarding  allegations of carrying out incorrect money transfers which on the evidence appeared to have led to a financial deficit of more than ninety thousand pounds to the respective organisation. 

What Happened In The Case?

Everything on the surface appeared to be progressing well and there was nothing to see here. However, evidence emerged in the form of notifications that the legal services provider was seemingly negating to make payments about payments linked to matters the provider had received instructions upon. On this basis, the SRA launched an investigation to find out what had been going on in the circumstances of the case. When the regulator did so the professional bookkeeper’s false front appears to have not stood up to scrutiny and quickly melted away in the face of questioning. 

Be Sure Your Sins Will Find You Out… 

When the SRA began its investigation into what events had been taking place and the circumstances surrounding them. When it did so, it found evidence seeming to suggest that the professional bookkeeper, far from acting professionally, had:

  • compiled questionable documents such as invoices

  • issued billing paperwork relating to professional disbursements between the costs in terms of profits accumulated by the legal service provider between the fifteen months from April 2018 and July 2019

  • inappropriately moved monies the legal services provider had received into an account relating to profit costs. Lay persons may not have seen anything amiss with this behaviour. However, this conduct was unacceptable as these payments were supposed to be allocated for payments of disbursements and had paid them 

  • adulterated financial documents with handwritten notes that purported to detail the outstanding amounts and labelled them as disbursements and

  • maintained a detailed ledger showing the disbursements which the professional bookkeeper had recorded as profit costs.

The extent of the Damage?

However, this was nothing compared to what the SRA discovered about the damage inflicted upon the provider of legal services in terms of finance. In fact, on the evidence there appears to have been a correlative and causative link between the incorrect movement, the labelling of the monies and, the monetary deficit of just shy of one hundred thousand pounds. In more detail information the facts highlighted a cash deficiency in the amount of approximately eight and a half thousand pounds.     

What Did The Solicitors Regulation Authority Say?

The SRA reviewed the evidence, her admission of dishonesty in falsely representing that disbursements had been incorporated into the documents as profit costs. The regulator was also damning over the somewhat devious behaviour of sending the monies in this way. The SRA found that the behaviour shown by the professional bookkeeper had breached her obligations under section 43 and unceremoniously prevented her from holding a post as a provider of legal services indefinitely.    

Way Forward?

Legal service providers should be taking into account the way the Regulator decides this area, the SRA consider:

  • if the person deals with clients in a public-facing capacity

  • the likelihood of harm done to the wider population and individual customers

  • whether a person is operating in a senior oversight function

  • if an individual can access cash held in the designated office or client accounts and 

  • the person’s conduct during the misdemeanour

Written by Adam Green         


#DLAPiper #CliffordChance #HoganLovells #Linklaters #Allen&Overy #Latham&Watkins #FreshfieldBrukhausDeringer #Ashurst #NortonRoseFulbright


[SOURCE 1] Castro, Bianca – Bookkeeper banned over ‘dishonest’ £39,000 transfers – Law Society Gazette – 14 November 2022 - Bookkeeper banned over ‘dishonest’ £93,000 transfers | News | Law Gazette

[SOURCE 2] Solicitors Regulation Authority – Approval of employment under section 41 and section of the Solicitors Act 1974 – 25 November 2019

[SOURCE 3] Section 43 applications and order – Weightmans - Section 43: Unqualified persons and the SRA | Weightmans

[SOURCE 4] Section 99 – How we regulate non-authorized persons – 17 November 2021 – Solicitors Regulation Authority - SRA | Guidance | Solicitors Regulation Authority



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