A partner who overcharged clients and then lied to the Solicitors Regulation Authority (SRA) about sending bills to them has been struck off
A fellow partner was suspended for a year because, despite being holding both compliance officer roles at the firm, he failed to step in.
The Solicitors Disciplinary Tribunal (SDT) found that Ieuan Michael Jones had “lifted monies out of the client account without any justification over a lengthy period”.
The SDT heard that a total of £102,400 had been taken from the client account of Jestyn Jeffreys in Neath, South Wales, without any bills being sent to clients on four probate matters where Mr Jones was the principal fee-earner.
The discovery came after the SRA launched an investigation, having received a qualified accountant’s report about the firm in July 2018. The regulator shut down the firm in February 2019.
The SDT said the sums taken “were clearly in excess of those which might properly be charged in that they were not justified by a bill and there was no evidence of work undertaken that would justify such a sum being transferred”.
In one of the matters, where £23,500 was transferred, the fees formula set out in the retainer generated a fee of less than £1,000.
Mr Jones accepted that there had been “numerous errors made due to the problems we faced with our accounting software”, leading to “transfers being taken that should not have been taken”. He also blamed the retirement of the firm’s bookkeeper.
Finding him to have been both lacking in integrity and dishonest, the tribunal ruled that Mr Jones knew he was overcharging the clients. “It was inconceivable that he could not know.”
The SDT said: “The making of improper transfers from client account and the gross overcharging represented a clear failure to adhere to an ethical code.
“This was not an isolated incident and involved very large sums of client money that had been misappropriated.”
An SRA forensic investigation officer said he received an email from Mr Jones in January 2019 attaching copies of letters and bills he had “just sent” to the wife of Client A, who had recently died, and Client B’s executor.
Client A’s wife told the officer that she had not received any bill and was not aware of any costs having been taken by the firm”. Client B’s executor also said he had received no bills.
The tribunal found that Mr Jones was acting with lack of integrity and dishonesty, since “he knew that he was providing misleading information to the SRA”.
The tribunal found that David Walter Phillips, another partner at Jestyn Jeffreys, had also displayed a lack of integrity in withdrawing money from client account in the absence of bills and without authority.
It said he had, “on his own admission”, failed to step in as required by his roles as partner, COLP and COFA.
“He admitted that he should have done more to involve himself in the accounts and he had also admitted that he made some transfers himself without bills to justify them.
Mr Phillips was admitted in 1980 and Mr Jones in 1999. Mr Phillips had been a partner with the firm since 1988, and it was not until 2004 that Mr Jones joined.
The SDT found that Mr Jones had been motivated by financial gain, and was “seeking to keep the firm afloat and to generate income for himself”.
Clients were in many cases “vulnerable” widows and beneficiaries, and the tribunal noted the “distress caused to Client A’s wife” when matters were explained to her by the SRA.
Mr Phillips was motivated was “taking shortcuts”. Although he had allowed the misappropriations to happen and “directed some of the withdrawals”, his misconduct was “mainly by way of omissions”.
The solicitor had “allowed advantage to be taken of clients”, but he had co-operated fully with the SRA.
Mr Jones was struck off and ordered to pay costs of £34,800. Mr Phillips was suspended for a year, with costs of £14,900.