An accountant found to have “improperly” issued a report to the Solicitors Regulation Authority (SRA) about a law firm has been severely reprimanded by his regulator.
The decision of the Institute of Chartered Accountants in England and Wales (ICAEW) followed a complaint by Susan Hirst (formerly Barrington-Binns) of Barringtons Legal in Wakefield, the law firm involved.
The case of Nicholas Charles Duncan Taylor, who practises from Patro Ltd in Skipton, was dealt with by the ICAEW’s investigation committee with a consent order.
This said that, in May 2014, Mr Taylor improperly issued an accountant’s report about ‘A Limited’ (Barringtons Legal) because he failed to report a breach of the accounts rules, specifically that £1.3m of client money was paid into an office account without client instruction and not transferred to the client account until six working days later.
Further, he “failed to make appropriate enquiries” over whether: client accounts were being reconciled at least every five weeks; accounts were properly opened and held as client bank accounts; accounting records were properly written up; and the £1.3m was made in respect of instructions relating to an underlying transaction or to a service forming part of the firm’s normal regulated activities.
As well as the severe reprimand, Mr Taylor was fined £3,150 and agreed to pay costs of £5,605.
The SRA closed down Barringtons Legal in September 2015. In March 2017, the Solicitors Disciplinary Tribunal suspended Ms Hirst for a year after she admitted multiple accounts rule breaches, allowing her client account to be used as banking facilities, failing to conduct proper due diligence on the £1.3m, which was sent offshore, and not being alert to the suspicious features of the transaction.
There was no finding of dishonesty or lack of integrity against Ms Hirst, nor any loss of client money and no criminal charges were brought against her clients. The tribunal said the suspension would ensure she was “meticulous in her compliance with the rules” in the future. She is back in practice.
Ms Hirst said in a statement that this had been Barrington Legal’s first accountant’s report and argued that Mr Taylor’s failure to advise her of the problems, so that she could rectify them, had led to the intervention.
She said Barringtons Legal was in the process of issuing proceedings against Patro Ltd for breach of contract and negligence, while she was also suing for her personal losses, including the suspension and costs of the tribunal proceedings.
She said she considered that the ICAEW decision “clearly establishes liability against Patro Ltd”, but that the firm has refused to accept this.
Mr Taylor declined to comment except to say that he disputed Ms Hirst’s allegations. “The matter is in the hands of my solicitors,” he said.
Ms Hirst also said that Mr Taylor’s solicitors, Bristol firm Beale & Company, had acted for Barrington Legal’s insurer over the intervention and she considered there was a “significant risk” of conflict of interest. She also criticised the tone of its correspondence with her.
Beale partner Joe Eizenberg had no comment, “save that we do not accept any of the allegations levelled against this firm”.