COFA did not know to submit accountants’ reports


Accounts: Firm had not submitted reports

A partner and compliance officer of a law firm who told the Solicitors Regulation Authority (SRA) he did not know about the requirement to send accountants’ reports has been fined £10,000.

The Solicitors Disciplinary Tribunal (SDT) found that Harmail Gill, who said he was also unaware of the need to carry out reconciliations, displayed “manifest incompetence” in his handling of the firm’s finances.

Mr Gill, born in 1970 and qualified in 1997, was the compliance officer for legal practice at Gill & Bassi Solicitors in the West Midlands, and shared the role of compliance officer for finance and administration (COFA) with his former partner, referred to as ‘Person A’.

Mr Gill stated in his evidence that he understood the accounts rules. However, the SDT said this was contradicted by the answers he provided in an interview with the SRA.

Asked if he was aware of the requirement to send accountants’ reports to the SRA within six months of the end of each accounting period, Mr Gill replied: “I have to say, the intimate details in dealing with a client account, no”.

Mr Gill admitted that he “became aware of the requirement” from the SRA.

The SDT said it accepted that the solicitor later “delegated his COFA responsibilities to Person A”, but there had been a “complete lack of governance and meaningful oversight” and a competent solicitor “would have kept a check on what was going on”.

Mr Gill admitted transferring a total of £400,000 from his firm’s client account to his personal bank account. The money was later returned to the firm.

The SDT heard that the firm started trading as a specialist criminal law firm in 2010, but in 2013 decided to diversify and started holding client money. Criminal work had fallen to 40% of the firm’s income by October 2015.

Another law firm reported G&B in May 2016 to the SRA, which found that the firm had never submitted accountants’ reports. Mr Gill “confirmed the intention to close the firm”.

The firm later submitted three accountants’ reports to the SRA, all of which were qualified and showed discrepancies. The SRA launched an investigation, interviewing Mr Gill and Person A.

Mr Gill said he withdrew the £400,000 because “he had become concerned about Person A’s conduct”. He returned £100,000 to the firm’s client account in August 2015 and transferred the remaining £300,000 “once the concerns about Person A had been resolved”. Mr Gill admitted breaking a long list of accounts rules.

The solicitor and his former partner were found to have failed in their joint role as COFA to ensure that the firm complied with the rules and to record any breaches.

Mr Gill admitted all the allegations made by the SRA, but denied acting with manifest incompetence.

The tribunal said there had been “no criticism of the respondent’s ability to manage the firm in a wider sense” and it was not being asked to make a finding of manifest incompetence “in relation to his overall conduct as a solicitor”.

The SDT accepted that Mr Gill had been “distracted by significant life issues” in the form of a family bereavement.

The tribunal concluded that there was “no motivation” for the misconduct, which had been the result of “naivety and carelessness”, and although Mr Gill was experienced, “privately funded work was a new field for him”.

There had been no loss to or complaints from clients. Mr Gill had acted, once alerted to the issues, and closed the firm “in an orderly manner”, including writing off costs.

He was fined £10,000 and ordered to pay just under £8,000 costs.




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