A London firm and its compliance officer have each been fined £25,000 after admitting multiple failings before a tribunal.
The Solicitors Disciplinary Tribunal heard that Solicitors Regulation Authority investigators found a client shortfall of more than £40,000 by the end of 2021 when they assessed the books of Law and Lawyers Limited, based in East Ham. These shortfalls were spread over 423 client matters. The firm also held £288,000 in residual balances across 1,786 matters which had not been touched for at least a year.
Investigators reviewed AML documents provided by the firm on a total of 15 conveyancing matters: of those 15, issues were identified with 12. Source of funds checks were found to be inadequate in certain matters and the firm did not have a compliant risk assessment in place.
A second respondent before the tribunal was the firm’s manager Francis Mathew, who was compliance officer for finance and administration. He was found to have failed to remedy any of the firm’s accounts rules breaches or report them to the SRA.
Mathew had made a declaration to the SRA in February 2020 that the firm had a fully compliant firm-wide risk assessment in place, as required by money laundering regulations. But this document was not drafted until February 2022.
Mathew admitted that he had realised a firm-wide risk assessment was required only after the SRA investigation had begun. The tribunal found that he acted recklessly in making a declaration without making sure that he understood exactly what a firm-wide risk assessment was.
In mitigation, Rory Dunlop KC said none of the misconduct had been planned or deliberate. The allegations dated to a period when the firm had a spike in work and the pressures of this led to delays in reconciliation of the client account. Mathew, it was submitted, was ‘confused’ in answering the AML declaration and ‘was by no means the only person to have ticked “yes” in answer to a question from the SRA in a mistaken belief that his firm had a compliant FWRA when it did not’.
There was no question of any client being left out of pocket from shortfalls in the client account, with enough cash reserves to cover these several times over. These proceedings had been a ‘wake up call’ which had prompted the firm to seek remediation of the issues.
In terms of personal mitigation, Dunlop explained that Mathew, a solicitor for 21 years, was a ‘remarkable person’ dedicated to serving his community, who had raised thousands for charity, worked with church organisations to help individuals in need and even donated his own kidney in 2015. Mathew and the firm each had an unblemished regulatory record.
Both respondents were fined £25,000 and jointly ordered to pay £38,000 costs. Mathew was also barred from being a head of legal practice or compliance officer without SRA permission.
