A Norfolk firm which paid out wrong sums to estate beneficiaries and then failed to rectify the issue for eight years has been fined almost £121,000.
The Solicitors Regulation Authority said the financial penalty against Hansells was an appropriate and proportionate sanction, reflecting the seriousness of the misconduct.
The regulator was able to issue such a penalty because Hansells is an alternative business structure and therefore not subject to the SRA’s £25,000 fining power limit for traditional firms.
The firm’s predecessor, Hansells Solicitors, had been instructed to deal with the administration of an estate in 2001 but due to a mistake in the interpretation of the rules of intestacy, it distributed the estate incorrectly.
Incorrect sums were paid to beneficiaries, which meant that client money was improperly withdrawn from the client account.
When the firm became a licensed body in 2014, it had a shortfall on the client account of £22,000, but this was not replaced until 2022 following a qualified accountant's report.
The SRA said that for eight years the firm had failed to replace client money and so breached various accounts rules.
Explaining why it opted to fine the firm the equivalent of 3.2% of its gross annual turnover, the regulator said a lesser sanction would not have provided a credible deterrent to the firm and others.
Hansells’ conduct had failed to uphold public trust and confidence in the profession and continued even after it was known to be improper.
The breach was rectified, but had persisted for ‘longer than was reasonable and only when prompted’, added the SRA.
‘The client account is sacrosanct and any failure to protect client money is serious. The beneficiaries of the estate did not receive their proper entitlements for years. Some of these beneficiaries were elderly, and passed away before they could be properly paid.’
The SRA accepted there was no dishonesty or lack of integrity and that the firm did make some admissions and eventually replaced the missing funds from its office account.
Hansells, headquartered in Norwich, was directed to pay a fine of £120,885 and costs of £1,350.
Roger Holden, a solicitor and manager of Hansells, was fined £3,223 and ordered to pay £1,350 costs for acting as the administrator of the estate from 2014 to 2022 where there was a conflict of interest.
