SDT: Solicitors paid themselves nearly £250,000 over 15 months
A law firm owner who has cost the profession £450,000 in payouts from the SRA Compensation Fund because of money missing from client account has been struck off.
The Solicitors Disciplinary Tribunal (SDT) said Fiona Jane Smith had breached the trust placed in her as a solicitor.
Ms Smith, who qualified in 2000, set up Hartlepool firm MSP Legal Services with her husband in 2007; he was the COLP and she was the COFA. It had seven staff and specialised in conveyancing, private client and personal injury work.
The Solicitors Regulation Authority (SRA) closed it down in April 2023.
According to a statement of agreed facts and outcome put before the tribunal, the SRA’s investigation found a shortage of nearly £640,000 in MSP’s client account, most of which had been improperly transferred to the office account.
Of that, £451,000 was then “dissipated” and has not been recovered.
Some of it purportedly went on salaries – although the round-sum nature of the payments made it “unlikely” that this was really where the money went, the SRA said – and on other firm expenses.
Further, in 2022, the couple took total net drawings of £196,500, and a further £49,000 in the three months before the intervention.
The SRA said: “The unexplained nature of these transfers from the client to office account, the timing of the payments to meet the firm’s liabilities and the round sum transfers all indicate that these transactions represent inappropriate and unlawful transfers of client money, rather than simply issues with the firm’s books or accounting.”
The Compensation Fund has had to pay out nearly £1m to 23 clients over missing money, some of which was covered by the £533,000 the SRA recovered from MSP’s bank accounts on intervention.
In mitigation, which was not agreed by the SRA, Ms Smith explained that MSP encountered difficulties in managing its practice during Covid.
“Following the pandemic, the firm undertook a period of expansion, including the undertaking of bulk property work from several major referring agencies, which, whilst done with the best of intentions in seeking to develop the firm, with hindsight it was the wrong decision, and a contributory factor to the difficulties exemplified by these proceedings.
“The firm employed staff that were not as experienced as initially understood. Additionally, the firm’s longstanding bookkeeper retired, leading to a change in financial and case management systems at the firm.”
Ms Smith also cited “personal difficulties linked to family illness” but did not contend that any of these amounted to exceptional circumstances which would justify the SDT making any order other than a strike-off.
Agreeing, the SDT said: “Ms Smith had breached the trust placed in her to treat client monies as sacrosanct. The conduct was deliberate, calculated and repeated over a period of time.
“The misconduct had caused significant harm to the reputation of the profession. The tribunal determined that given Ms Smith’s admitted dishonesty, the only appropriate and proportionate sanction was to strike her off the roll.”
She was also ordered to pay costs of £41,000.
Her husband, Andrew Lynsey Jones, was struck off in 2024 after the SDT found he dishonestly misled his client, his client’s son and the other side about the progress of litigation he was conducting.
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