Senior Lawyer Banned For Propping Up Firm With Client Money

| General

On 26th October 2022 news emerged of a senior legal professional who had served just shy of fifty years in the profession who had been struck off by the Solicitors Regulation Authority when evidence came to light of him supporting up the finances of a legal services provider with monies being held in the sacrosanct client account. 

Until this time his career moved on swimmingly and he had achieved what aspiring lawyers could only dream of. His was a legal career packed with longevity, he had owned the firm in question and gained the respect of the profession. On this latter point to underline the respect bestowed upon him by the profession was responsible for signing off on payments on behalf of the legal services provider and was the only person in the organization with any form of permission to use the technology for banking purposes.   

Be Sure Your Sins Will Find You Out?

However, this all came crashing down when the SRA carried out a review of numerous client account entries and it discovered some alarming, concerning, and for the most part, frightening account entries needing further investigation. The first eye-brow-raising matter concerned five payments that appear to have fluctuated from just shy of one thousand five hundred pounds to a mammoth fifty thousand pounds which had seemingly been made from a client account. 

How Did The Legal Professional Explain This?

Far from taking the SRA advice and acting with honesty and integrity, the legal professional advised the investigators that the explanation that he reasonably believed that the movement of the monies represented a loan payment and was paid into a separate leger which belonged to a third party client. However, the SRA appears to have questioned the plausibility of this as there were no records showing the monies being returned to the original client account. 

Any Other Incidents?

This may have been forgiven. However, the investigation uncovered evidence relating to more transactions that an independent layperson may regard as dubious, to say the least. The dubious nature of the movement of the monies was underlined by the account entries appearing to  show monies being paid to other client accounts to fund outstanding stamp duty land tax on other independent and third-party client accounts. There were other examples of sceptical payments being paid which represented pending legal expenses due to being paid to other providers of legal services. Instead of doing the right thing and making the payments to the beneficiaries entitled under the estate the lawyer at the heart of these proceedings had never paid any of these monies to such entitled persons. 

However, this was not the end of the story, and more account entries were viewed dimly by the regulator. One appeared to show more client monies being sent from one unconnected account containing client monies to another independent client account. There was also evidence of another entitled beneficiary not receiving the legacy they were seemingly entitled to. 

Payback Time?

The legal representative admitted to the Regulator that he had decided to make the dubious payments because the provider of legal services was facing financial difficulties and planned to repay the monies in due course. However, he could not provide an exact date so it lacked credibility.  

Pages Turned…Lessons Learned?

Legal professionals should be ensuring they are:

  • keeping a full, verifiable, and complete set of client accounts 

  • acting with honesty and integrity

  • not sending correspondence with the intent of deceiving the SRA and 

  • avoiding incorrectly supporting a firm financially with client monies. 


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


[SOURCE 1] Hyde, John – Owner used £200,000 from client account to ‘prop up’ firm – 18 October 2022 – Law Society Gazette - Owner used £200,000 from client account to 'prop up' firm | News | Law Gazette

[SOURCE 2] Hyde, John – Owner fined for dipping into client funds to pay the bills – Law Society Gazette – 8 March 2022 - Owner fined for dipping into client funds to pay the bills | News | Law Gazette

[SOURCE 3] Rose, Neil – Solicitor used firm’s client account to administer family finances – Legal Futures =- 25 May 2022 - Solicitor used firm's client account to administer family finances - Legal Futures



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