Two former partners have each been fined £2,000 for not closing down their firm properly once insurance cover had run out.

Anthony and Nicholas Bond, partners at Kent firm A J Bond & Co, agreed the settlement with the Solicitors Regulation Authority after an investigation found that they continued to keep client accounts worth £175,000 even when insurance was not in place.

The firm had not obtained professional indemnity insurance by 1 October last year and entered the extended policy period (EPP), giving it 90 days to secure cover.

Any firm still without insurance at the end of that period had an obligation to close down immediately.

This is believed to be one of the first disciplinary actions taken by the SRA against a firm in the EPP for not winding down properly.

An SRA statement said A J Bond & Co closed on 29 December but continued to hold client files and monies after that date.

An inspection of the firm was started on 13 January, with the SRA identifying from a schedule of residual balances that £175,555 in funds was being held in the firm’s client account in respect of 29 closed client matters. The largest of these was £131,859 in respect of one particular client.

The SRA said both partners had ‘failed to deal with all live matters on or before 29 December 2013, account to clients for all monies due in accordance with the SRA Accounts Rules 2011, effect an orderly wind-down of the firm and deal with any historic client balances’.

As compliance officers as well as partners, both admitted all allegations against them.

In mitigation, both apologised for the breaches and said all clients were contacted prior to closure. They added that no complaints or indications of dissatisfaction were received from any clients.

Anthony Bond said he intends to retire as soon as possible, while Nicholas Bond said he has 'no intention of being involved in the ownership, or membership or running of any practice in the future and would be more than willing to give an undertaking to the SRA or anybody else in that regard at any time'.

All live client matters have now been transferred and all monies repaid.

Each partner was rebuked by the SRA and fined £2,000 – the maximum financial penalty available to the regulator. They will also both pay £300 costs.

Both partners have agreed to only work as solicitors in future and not be involved in the management of a law firm or regulated practice.