A law firm that held nearly £600,000 in hundreds of residual client balances dating back almost 29 years has been fined by the Solicitors Regulation Authority (SRA).
Bradford firm Simpson Duxbury accepted a fine of £5,899 in a regulatory settlement agreement published last week.
The SRA recorded that the firm received a qualified accountant’s report for the years ending 31 May 2021 and 2022 on the basis that it held a number of client balances on which there had been no movement for the prior 12 months.
As of 2 February 2023, there was a total of 393 balances that added up £596,707, dating back to May 1995 and ranging from £78,847 in one to £0.01.
This was in breach of various rules, particularly the requirement that client money must be returned to the client promptly as soon as there was no longer any proper reason to retain those funds.
Simpson Duxbury explained that its focus on current client matters resulted in historic cases being left where the client could not be located or identified.
It has since put in place policies and procedures to prevent future breaches and said it was working to resolve the outstanding matters.
The SRA said a fine was the appropriate outcome because “the breaches formed a pattern of misconduct and continued after it was known to be improper”.
“The firm held onto funds which belonged to its clients for an unacceptable period. The delay in returning client funds increased the risk that the intended recipients would not be located and would not receive their funds.”
Further, it failed to act on the first qualified accountant’s report.
The SRA’s fining guidance led to a broad penalty bracket of 1.6-3.2% of Simpson Duxbury’s annual domestic turnover. This led to a figure of £6,554, which was reduced by 10% to reflect the firm’s subsequent remedial action and cooperation with the investigation.