The High Court has rejected a solicitor’s bid to overturn conditions placed on his practising certificate by the Solicitors Regulation Authority (SRA) – but also criticised the regulator for the time it has taken to act in the case.
Taher Moosavi, who qualified in 2002, was a sole practitioner at Chancery Solicitors until he closed down the firm last year.
The SRA investigated him over work done for two investment businesses which Mrs Justice Whipple said provided Mr Moosavi with “significant volumes of work” and saw millions of pounds placed in escrow in his client account.
In July 2015 the SRA imposed conditions on his practice, a decision upheld on appeal by an adjudication panel decided in January 2016.
The panel said they were needed because of Mr Moosavi’s “failure to understand the potential misuse of his firm’s client account despite the advice provided by Professional Ethics and the consequent risk of failure to comply with the SRA Accounts Rules 2011”.
It also identified his “failure to adequately assess the risk/potential dangers of receiving and holding large sums of money from individuals where there was a risk of money laundering or which bear the hallmarks of fraud”.
The panel ordered that Mr Moosavi could not act as a sole practitioner, manager or owner of a firm, or hold a compliance officer role. The court heard that the SRA was also preparing disciplinary proceedings against the solicitor.
Whipple J robustly dismissed Mr Moosavi’s appeal against the conditions. She said there was “a very real risk here that the appellant had simply allowed his client account to be used as a bank account, and thus that he had broken rule 14.5 [of the Solicitors Accounts Rules]. The appeal panel made no finding either way on that issue. It simply identified the risk, correctly. I agree with its evaluation”.
Mr Moosavi had already told the SRA that he had no intention of owning or running a firm, or being a compliance officer, in future, but the judge said this was “insufficient to displace the need for conditions”.
He also argued that the 19-month delay between the SRA’s first involvement and imposing conditions showed that the risks were not considered to be pressing or urgent, and that by July 2015 his circumstances had changed and he was longer a sole practitioner or acting for the two clients.
The judge said: “The SRA was first alerted to potential problems in the appellant’s practice in December 2013 and it will now be 2017 before this matter comes before the SDT. That seems a very long time.”
However, Whipple J said the delay did not affect the validity of the appeal decision. She found that the panel took the delay into account but concluded that the risk for the future remained. “That was a permissible, and in my judgment, correct conclusion.”
“The fact that the appellant had not been subject to conditions any earlier than July 2015 is surprising, but in the end to his advantage. It meant that he was allowed to continue to practice free of conditions for a period of 19 months during which time he arguably could have been subject to conditions, if the SRA had moved faster.
“In fact, the appellant was subject to conditions for the first time only around a year ago. To date that is not an unduly long period…
“I conclude that the appeal panel imposed a necessary, proportionate and reasonable set of conditions.”
An SRA spokesman said: “We aim to deal with disciplinary and regulatory issues as quickly as possible, as this is best for both consumers and the solicitors themselves. While Mrs Justice Whipple suggests that we could have been quicker in this instance, we welcome her decision to dismiss the appeal.”