Three former directors at a defunct firm have been rebuked after investigators found six-figure sums languishing in the client account.
The Solicitors Regulation Authority team discovered in 2023 that north west London firm Hodders Law had 408 client ledgers, holding a combined total of more than £350,000, where there had been no activity for almost three years.
At one point the firm also had five client account suspense ledgers holding a total of £578,000. These are accounts not specifically allocated to a client or firm and used as a temporary repository for unallocated funds.
Aminta Silva, James Tompkins and Karen Rieveley, who were all directors of Hodders Law, were each found to have failed to ensure that client money was returned promptly to clients as soon as there was no longer any proper reason to hold it. They breached accounts rules by failing to keep and maintain accurate and up-to-date records for client ledgers with all receipts and payments clocked.
A rebuke was deemed appropriate for each as there was potential to cause harm. However there was no evidence of misappropriation and no shortage was created on the client account. There were no allegations of dishonesty or lack of integrity and none of the directors had acted intentionally or recklessly in breach of their regulatory obligations.
The three were each ordered to pay £1,350 in costs.
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Hodders Law, which had 48 staff and four offices, was placed into administration within weeks of the SRA investigation, ending a history that stretched back 150 years.
The amount owed to creditors within one year had increased from £970,000 to more than £2m. The firm went from having net current assets of £111,000 to an overall deficit of almost £400,000.
The business is currently in liquidation. The administration ended last year with around £263,000 realised from the firm’s assets but nothing available to pay unsecured creditors who were collectively owed £1.79m.
