Legal Professional Banned By SRA For Stamp Duty Irregularities

| General

In late January 2023 legal industry regular the Solicitors Regulation Authority released its decision into the public domain its decision in the case of a legal professional who had used deceitful means to embezzle more than three hundred and thirty thousand pounds in payments connected to stamp duty. The SRA usually takes cases of this type extremely seriously as it wants to keep up standards in the legal profession. In this regard, the regulator ruled that the behavior of the legal professional was so unprofessional that it perceptively believed that it had no reasonable alternative open to it but to prevent her from operating in the legal industry unless the person first approaches the Solicitors Regulation Authority and obtains its consent.      

What Happened In the Case?

The person employed in this capacity had been working for a provider of legal services for some time and there were seemingly no problems with the way she was conducting herself in her role.  However, the Solicitors Regulation Authority investigated how the legal professional had acted in the period from mid-October 2020 and late into November 2021 as on the evidence the circumstances of the case seemingly demonstrated that the legal professional had embezzled a monetary amount of just over three hundred thousand pounds from the respective provider of legal services which provided her with employment.

The Solicitors Regulation Authority put forward some serious  allegations that the legal professional at the center of the case had made assertions regarding the purported deflating of property valuations or the incorrect categorization of matters. When the Solicitors Regulation Authority delved slightly deeper into the goings on in the case it discovered that the legal professional had sent financial documents relating to the completion of transferred properties. These documents included the right amount of tax owed.

Such payments would be sent into their account designated for client monies. The legal professional would then progress to adding in the wrong figure at the time when the tax return was entered into HMRC. This appeared to have resulted in an excess. The legal professional would then ask the provider of legal services’ internally located accounts department to provide financial transfers to separate third parties whom she had a relationship with.

The legal professional purported to third parties that a cash transfer had been incorrectly made and requested for it to be returned to the provider of legal services. However, when the Solicitor Regulation Authority examined the facts of the case, it discovered evidence seeming to suggest that instead of doing do the monies were inexplicably transferred to her private account. The regulator also commented that the legal professional at the heart of the proceedings had neglected her duty to pay disbursements in connection with property transfer matters.            

Pages Turned…Lessons Learned?

Persons involved in legal practice should be mitigating the risks of being sanctioned by the regulator for embezzling monies by taking on board the lessons from this case and taking the following steps by considering:  

  • not embezzling monies from the respective provider of legal services providing them with employment
  • avoid making written representations to the tax authorities assessing the price of pieces of land at too low a level
  • not categorizing the property
  • aligning the tax figures in the property finance documents, paperwork and forms in relation to the completion of property transfers and the tax authorities to ensure they are consistent
  • avoid receiving monies into the designated client account and causing excesses and
  • not getting into a position whereby client monies would be received into their private bank accounts. 

ASSESSING FIRMS

#AddleshawGoddard #CMS #EvershedsSutherlandLLP #DLAPiper #PinsentMasonsLLP #Shoosmiths #BrabnersLLP #DavittJonesBould #DWF #GateleyPlc #HillDickinsonLLP #JMWSolicitorsLLP #KuitSteinartLevy #Mills&Reeve #SquirePatonBoggs #TLT #Clyde&CoLLP #BrowneJacobson

SOURCES USED WHEN WRITING THIS ARTICLE

[SOURCE 1] Castro, Bianca – Employee collected ‘at least’ a£338,000 in land tax fraud – 1 February 2023 - Employee collected 'at least' £338,000 in land tax fraud | News | Law Gazette

[SOURCE 2] Solicitors Regulation Authority – Approval of employment under section 41 and section 43 of the Solicitors Act 1974 – 25 November 2019 - SRA | Guidance on approval of employment under s41 and s43 of the Solicitors Act 1974 | Solicitors Regulation Authority

[SOURCE 3] Section 41 Solicitors Act 1974

[SOURCE 4] Section 43 Solicitors Act 1974

[SOURCE 5] Regulation 10(2)(a) Authorisation of Individuals Regulations

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