Estate accounts: Misleading entries
A probate solicitor who blamed multiple breaches of the code of conduct on the “emotional entanglement” he felt when handling his brother’s estate has been fined and given a seven-year restriction order.
The Solicitors Disciplinary Tribunal (SDT) heard that Sarinjit Singh Bahia, the sole director and owner at Consilium Legal in Birmingham, created misleading accounts, retained client funds in his own personal bank account and misused client money.
The breaches spanned three years to 2020 and involved more than £60,000 in client funds and fees, related to a trust that his late brother had set up for his assets.
After his brother’s suicide, Mr Bahia, a sole practitioner, became a co-trustee of his estate.
In January 2021, the Solicitors Regulation Authority (SRA) received an anonymous tip-off about misuse of client funds, which sparked a forensic investigation.
When SRA investigators went into Consilium Legal, they found “significant financial irregularities”. Accounting records were “inadequately maintained” and key documents were “missing or unreliable.” It shut down the firm in July 2021.
Shortly before the SDT hearing, the SRA withdrew allegations of dishonesty and lack of integrity after a ‘without prejudice’ meeting with Mr Bahia.
Unusually, the SDT twice refused to approve an agreed statement of facts and outcome, first because it did not “contain sufficient clarity about Mr Bahia’s state of mind” at the time of the misconduct, and then because the proposed fine, £5,000, was too low given that this was his third appearance before the tribunal.
Mr Bahia, aged 59, who qualified in 1993, was found to have created two sets of misleading accounts relating to his brother’s estate between 2017 and 2020.
The estate accounts included a note saying “no fee to be charged” by Mr Bahia’s firm. However, hebilled the estate £5,000 in November 2017 and a further £15,000 two years later.
Mr Bahia described these breaches as “careless and inadvertently made”.
From April 2019 onwards, Mr Bahia failed to tell the beneficiaries of the estate – his two nieces – about interest payments worth £15,000, which had come from a loan of trust monies. The solicitor “utilised the monies for other purposes”.
Mr Bahia retained nearly £28,000 of client money in his personal bank account, which in turn caused a shortage in his firm’s client account.
This related to a lump sum payment from his brother’s pension. Mr Bahia was the nominated beneficiary and the Civil Service Pension Scheme insisted that the money was paid into Mr Bahia’s personal bank account.
However, in September 2017 the estate accounts recorded that the money was retained in the Consilium Legal client account. Mr Bahia said he had intended to donate this money to the beneficiaries of his brother’s estate in July 20217 but more than two years later, it had not been moved.
In February 2020, Mr Bahia transferred £27,700 from the client account into a designated trust account controlled by his co-trustee.
With the lump sum from the pension scheme still sitting in Mr Bahia’s personal bank account, this created a shortage of funds in his firm’s account.
Separately, Mr Bahia was found to have misused just over £13,500 of another client’s money, rather than paying their stamp duty on a property. The SRA accepted that the money was transferred in error by a third party and the solicitor replenished the client account two weeks later with his own money.
Mr Bahia said that the breaches were caused by “tragic circumstances” following his brother’s suicide.
He told the SDT that his mishandling of the estate was “motivated by a personal sense of guilt for failing to look after his brother, coupled with a sense of responsibility toward his nieces.”
In mitigation, which was not agreed by the SDT, Mr Bahia said the “unusual circumstances of this retainer resulted in an emotional entanglement, which clouded my professionalism.”
The SDT said Mr Bahia’s conduct was “seriously aggravated by his previous regulatory history”. He last appeared before the tribunal in 2019 when he was fined £30,000 after acting in a “surprisingly incompetent manner”.
In 2007, he was severly reprimanded after a conviction for assault by beating.
The SDT accepted that Mr Bahia did not profit from his latest breaches, but criticised his “sustained carelessness”. Further, “future misconduct” was possible.
The restriction order prevents Mr Bahia from acting as a manager or owner of any authorised body, acting as a COLP or COFA for any authorised body, and he cannot hold or receive any client money, or act as a signatory to any client or office account or have the power to authorise transfers from any client or office account.
Mr Bahia was fined £15,000 and ordered to pay costs of £20,000.
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