Decisions and interventions

The SDT ordered that the respondent should be struck off the roll.

While in practice as a solicitor and partner at Fursdon Knapper, between around 2 May 2018 and April 2020, the respondent had misled clients, Dr and Mrs A, in respect of their claim against Galliard Developments Ltd by: (i) making a statement to the effect that he had lodged a claim in court on their behalf when he knew that that was untrue; (ii) stating that he had resubmitted paperwork in relation to their claim when he knew that was untrue; and (iii) creating the misleading impression that he had issued proceedings when he had not.

He had thereby breached principles 2, 5 and 6 of the SRA Principles 2011; principles 2, 4, and 5 of the SRA Principles 2019; and paragraph 1.4 of the SRA Code of Conduct for Solicitors, RELs and RFLs. The respondent had acted dishonestly.

Although the respondent’s initial action of informing the clients that he had filed the claim might not have been deliberately planned, his subsequent action in consistently maintaining that proceedings had been issued had involved some degree of planning.  

The misconduct had had a considerable impact on the clients, who had experienced a high degree of stress. The impact of the respondent’s actions had extended to junior staff at the firm who had repeatedly been contacted by the clients wanting to obtain updates from the respondent through them.

The respondent’s conduct was aggravated by the fact that it was dishonest and had been repeated over a two-year period. The reputation of the profession was undermined when a solicitor, particularly one in a senior role, misled clients over a significant period of time.

The SDT could not find any exceptional circumstances justifying a lesser sanction other than a strike-off, therefore the only appropriate and proportionate sanction was to strike the respondent’s name from the roll.

The respondent was ordered to pay costs of £19,877.

The SDT ordered that the respondent should be struck off the roll.

While in practice as a partner at Cunningtons LLP, on 2 July 2021, in a telephone conversation with a third party, the respondent had attempted to procure the backdating of a transfer form, thereby breaching principles 2, 4 and 5 of the SRA Principles 2019 and paragraph 1.4 of the SRA Code of Conduct for Solicitors, RELs and RFLs.

On 2 July 2021, in an email sent to a third party, the respondent had attempted to procure the backdating of a transfer form by a third party, thereby breaching principles 2, 4 and 5 of the Principles and paragraph 1.4 of the code. The respondent had acted dishonestly.

In the respondent’s case, it had been an isolated, discrete and momentary lapse, lasting 30 minutes, in which time he had engaged in one telephone call and an email.

The SDT had given significant weight to the nature of the dishonesty, as the respondent’s actions, if carried through, would have resulted in a deceit upon HM Revenue & Customs in the sum of approximately £6,000.

The integrity of the conveyancing process was founded upon the network of obligations which exist between the profession and others. There had to be unshakeable confidence that solicitors would record accurately and discharge a liability to HMRC as an integral part of that process.

Balancing all the matters in the round the SDT did not find that there had been exceptional circumstances and the appropriate sanction was to strike the respondent’s name from the roll.

The respondent was ordered to pay costs of £5,000.

The SDT ordered that the first respondent, WGS Solicitors, a recognised body, should pay a fine of £25,258.

The first respondent had caused or allowed money to be received to and paid from the firm’s client account in circumstances other than in respect of an underlying legal transaction being undertaken by the firm, or in respect of the delivery by the firm of normal regulated services, thereby breaching rule 14.5 of the SRA Accounts Rules 2011; principles 6 and 8 of the SRA Principles 2011; rule 3.3 of the SRA Accounts Rules 2019; principle 2 of the SRA Principles 2019; and paragraph 2.1(a) of the SRA Code of Conduct for Firms.

Being the ‘relevant person’ with ultimate responsibility for compliance with the prevailing anti-money laundering regulations, the first respondent had failed adequately or at all to:

(i) apply customer due diligence measures, contrary to regulations 27 and 28 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (2017 MLRs); (ii) apply enhanced customer due diligence measures and enhanced ongoing monitoring where indicated, contrary to regulation 33 of the 2017 MLRs; (iii) conduct ongoing monitoring of its business relationships with such entities, contrary to regulation 28(11) of the 2017 MLRs; (iv) conduct a risk assessment of the client and matter in accordance with regulation 28(12) and 28(13) of the 2017 MLRs; and that in doing so, it had breached or failed to comply with: principle 6 of the 2011 Principles; outcome 7.5 of the SRA Code of Conduct 2011; principle 8 of the 2011 Principles; principle 2 of the 2019 Principles; and paragraph 2.1 of the Code for Firms.

The SDT had reviewed all the material before it and was satisfied on the balance of probabilities that the first respondent’s admissions had been properly made.

The first respondent had failed to have proper procedures in place in order to ensure compliance with its regulatory obligations. It had allowed its client account to be used as a banking facility in circumstances where it had failed to ensure that proper checks were in place to militate against the risks of money laundering.

The appropriate sanction was a financial penalty and the parties had proposed a fine of £25,258. That had taken into account the first respondent’s turnover. The proposed amount was reasonable and proportionate. Accordingly, the SDT approved the proposed sanction.

The first respondent was ordered to pay costs of £18,000.

The SDT ordered that the second respondent should pay a fine of £20,000.

Between 3 May 2018 and 15 August 2020, the second respondent had caused or allowed receipts to and payments from the first respondent’s client account in matters for Person A or entities connected to Person A, in circumstances other than in respect of an underlying legal transaction being undertaken by the first respondent, or in respect of the delivery by the first respondent of normal regulated services.

He had thereby breached rule 14.5 of the Solicitors Accounts Rules 2011; principles 2, 6 and 8 of the 2011 Principles; rule 3.3 of the Solicitors Accounts Rules 2019; and principles 2 and 5 of the 2019 Principles.

Between 3 May 2018 and 15 August 2020, being at all relevant times a member of the first respondent and the partner with primary responsibility for its relationship with Person A1, in respect of matters connected to Person A1 he had materially contributed to the first respondent’s anti-money laundering failures alleged above (or any of them). He had thereby breached principles 6 and 8 of the 2011 Principles; principle 2 of the 2019 Principles; and paragraph 7.1 of the SRA Code of Conduct for Solicitors, RELs and RFLs 2019.

Given the facts of the matter, the SDT had found a clear case of providing a banking facility in breach of the accounts rules.

The second respondent’s motivation for his misconduct was to ensure that he retained the client.

The second respondent had direct control and responsibility for the circumstances giving rise to the misconduct. While the first respondent had admitted its systemic failings, the second respondent was one of three equity partners at the time, and was thus responsible for ensuring that there were no systemic failings.

His conduct had been repeated over a significant period of time in circumstances where he had failed to make proper enquiries as to his regulatory obligations, notwithstanding his awareness that he should make such enquiries.

No loss had been suffered by any client. Further, the second respondent had self-reported, and had taken significant steps to ensure that the first respondent and its staff would in future comply with their regulatory obligations. He had made open and frank admissions, and had demonstrated genuine insight into his misconduct.

The second respondent’s misconduct was not so serious that there should be any interference with his right to practise.

A fine in the sum of £20,000 was proportionate and reflective of the seriousness of his wrongdoing.

The respondent was ordered to pay costs of £10,000.

The SDT ordered that the third respondent should pay a fine of £3,500.

Between 26 June 2017 and 1 November 2020, being a member of the first defendant and, at all relevant times, the partner with primary responsibility for its relationship with Person B1, in respect of matters connected to Person B1, the third respondent had materially contributed to the first respondent’s anti-money laundering failures.

She had thereby breached principles 6 and 8 of the 2011 Principles; principle 2 of the 2019 Principles; and paragraph 7.1 of the code for solicitors.

The parties had invited the SDT to deal with the allegations against the third respondent in accordance with the statement of agreed facts and outcome annexed to the judgment.

The SDT had reviewed all the material before it and was satisfied on the balance of probabilities that the third respondent’s admissions had been properly made.

The SDT had found that the third respondent, as the solicitor with conduct of the matters for Person B1, should have ensured that the necessary customer due diligence measures information had been obtained. As an experienced solicitor and partner in the first respondent, the third respondent should have been aware of the relevant rules and principles.

The appropriate sanction was a financial penalty of £3,500, that sum taking account of the third respondent’s means, and being reasonable and proportionate.

The third respondent was ordered to pay costs of £6,500.

The SRA has intervened into the practice of Regan Peggs and into the recognised body Regan Peggs Solicitors Ltd. The firm went into liquidation on 24 June 2024 and was formerly based at 521 The Greenhouse, Custard Factory, Gibb Street, Birmingham B9 4AA, and then at 1 Victoria Square, Birmingham B1 1BD.

The grounds of intervention into the practice of Regan Peggs were:

• There was reason to suspect dishonesty on the part of Peggs in connection with his practice as a solicitor – paragraph 1(1)(a)(i) Schedule 1 Part I Solicitors Act 1974 (as amended).
• Peggs had failed to comply with rules – paragraph 1(1)(c) Schedule 1 Part I Solicitors Act 1974.
• It was necessary to intervene to protect the interests of clients or former clients and any beneficiaries of any trust of which Peggs is or was a trustee – paragraph 1(1)(m) Schedule 1 Part I Solicitors Act 1974.

The grounds of intervention into Regan Peggs Solicitors Ltd were:

• There was reason to suspect dishonesty on the part of Peggs, as a manager of the firm, in connection with the firm’s business – paragraph 32(1)(d) Schedule 2 Administration of Justice Act 1985.
• Peggs, as a manager of the firm, and the firm itself, had failed to comply with rules applicable to them both by virtue of section 9 of the Administration of Justice Act 1985 – paragraph 32(1)(a) Schedule 2 Administration of Justice Act 1985.
• It was necessary to intervene to protect the interests of clients or former clients, the interests of beneficiaries of any trust of which the firm is or was a trustee, or the interests of the beneficiaries of any trust of which a person who is or was a manager or employee of the firm is or was a trustee in that person’s capacity as a manager or employee – paragraph 32(1)(e) Schedule 2 Administration of Justice Act 1985.

Peggs does not hold a current practising certificate.

Richard Thorpe of Shakespeare Martineau, SHMA SRA Interventions, PO Box 18228, Birmingham B2 2HX (tel: 0300 247 2470; email: interventions@shma.co.uk) has been appointed as intervention agent.