Fine for partners over years of multiple accounts rules breaches

SDT: Very serious breaches

Two partners at a former London firm have been fined a total of £25,000 for an improper transfer of a client’s funds and allowing more than 1,700 matters to go stale, among other accounts rules breaches.

The Solicitors Disciplinary Tribunal (SDT) said Miramar Legal invoiced a client for just under £3,200 in additional legal fees following a conveyancing transaction when the money should have been used to pay stamp duty and Land Registry fees.

Miramar Legal was founded in 2009 by Mohit Chopra, who was fined £20,000, Paul Levy, fined £5,000 and another partner referred to as Partner A.

Both Mr Levy and Partner A had sold their equity to Mr Chopra by April 2013; Partner A left the firm later that year.

Mr Levy remained a partner until December 2020, when the firm closed, but “effectively stopped conducting any work for the firm” after 2018.

The allegations against Mr Chopra and Mr Levy were identical but Mr Chopra was sanctioned first, by way of an agreed outcome with the Solicitors Regulation Authority (SRA) and approved by the SDT. A separate tribunal then held an oral hearing to discipline Mr Levy.

Mr Chopra admitted all the allegations as part of the approved outcome, while Mr Levy admitted them on a “strict liability basis”.

The SRA said that Miramar Legal raised an invoice for £3,181 in August 2015 as the balance of fees in a conveyancing transaction which completed in October 2013. The money, the “exact sum” remaining in client account, was then transferred to the firm’s office account.

However, the SRA said both the completion monies and legal fees had been paid out, meaning the remaining balance “should have been used” for the stamp duty and Land Registration fees.

The mistake was only rectified in July 2018, when the client sought to sell the property and it “transpired” that neither the stamp duty nor the Land Registry fee had been paid.

Separately, the solicitors admitted that, for six years to September 2018, the firm had overpaid money out of client account on 18 matters – sums ranging from 25p to £1,141 – resulting in debit balances on client account totalling £4,440 by the end of the period.

The debit balances – the longest of which was there for over six years – were rectified in November 2018.

Meanwhile, a client account reconciliation showed that 23 items had not been properly recorded between May 2014 and September 2018. Mr Chopra took “remedial action” and these were reduced to 10 by April 2019.

Mr Chopra produced a ‘slow moving matters report’ in December 2018 which listed matters that had not moved since 1 December 2017. It ran to 85 pages and included 1,744 ‘active’ matters; the total of the client balances was £26,000.

The SRA found that, in August 2020, 199 client balances were the same as they had been in November 2018, the largest of which, for £4,170, had been on client account for three years.

Mr Chopra and Mr Levy admitted causing or allowing an improper transfer to office account and a range of accounts rule breaches, including failure to maintain accurate accounting records and failing to promptly return client money to clients.

In mitigation, Mr Chopra said he “regrets that he was unable to implement procedures to avoid the breaches”. All shortages were made good on discovery and the sums of money involved were “relatively small”.

The SDT said: “The admitted breaches were very serious, undermined public trust and Mr Chopra was on notice of these issues given the references within the accountants’ reports. He did thereafter make good the shortfalls and no client lost out financially.”

The solicitor was fined £20,000, ordered to pay costs of £15,700 and banned from being a sole owner or compliance officer, or holding client money.

In mitigation, Mr Levy’s advocate pointed out that he had admitted the allegations at the earliest opportunity and offered “a sincere and genuine apology to the tribunal, the regulator and the profession for his appearance at the tribunal, the worst day of his professional life”.

As a non-equity partner from 2012, his involvement in the management, accounts and bookkeeping was “nil”. He had received indemnities from Mr Chopra and Partner A for any losses suffered as a result of remaining a partner.

The SDT accepted that his role had been “passive” said of Mr Levy: “As an experienced solicitor Mr Levy should have anticipated that by allowing someone else to have control of the firm where he had liabilities as a partner, problems could arise.”

Mr Levy was fined £5,000 and ordered to pay costs of £7,500.

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