Accounts: COFA failed to disclose they had been qualified in PII applications
A senior solicitor has been reprimanded and banned from being a compliance officer for finance and administration (COFA) for a year over multiple compliance failures.
The Solicitors Disciplinary Tribunal (SDT) also ordered Gordon Mcpherson Keir to take a COFA training course should he want to resume the role at Birmingham firm Hadgkiss Hughes & Beale.
Mr Keir, who qualified in 1985, is an equity partner and held both compliance officer roles.
Throughout his evidence, the SDT recorded, he accepted responsibility for what had gone wrong.
“He accepted that, with hindsight, he should have taken a more robust approach in a number of respects.
“He maintained, however, that he had acted in good faith, had sought to address the issues identified by the firm’s accountants and the SRA [Solicitors Regulation Authority], and that none of the matters relied upon by the [SRA] involved deliberate wrongdoing.
Mr Keir admitted that, on four occasions between 2018 and 2022, he signed professional indemnity insurance proposal forms which incorrectly stated that the firm’s accounts had not been qualified within the preceding five years.
He said this was the result of “genuine mistake rather than any deliberate attempt to mislead”.
Evidence from the firm’s insurance broker was that it would not have altered the insurer’s decision had this been disclosed – and indeed, when it was, the insurer continued to provide cover.
The solicitor admitted breaching public trust but denied lacking integrity – the SRA had dropped an allegation of dishonesty, saying the conduct was “more appropriately characterised as raising issues of integrity and professional standards”.
The SDT said: “The tribunal considered that the repeated nature of the inaccuracies demonstrated a serious lack of care and a failure to exercise the degree of scrutiny required when completing professional indemnity insurance proposal forms.
“However, the tribunal was not persuaded that the conduct crossed the line between carelessness, even repeated carelessness, and a departure from the ethical standards of the profession sufficient to establish a lack of integrity.”
Mr Keir also admitted allowing residual balances to exist. While steps had been taken to address the problem, “the tribunal noted [his] own concessions that no formal written plan existed, that compliance was not adequately monitored or recorded and that, with hindsight, he should have taken a more robust approach”.
This amounted to professional misconduct, as did the delays in submitting qualified accountant’s reports for 2020 and 2021.
Though the SDT accepted Mr Keir’s evidence that these were caused by the pandemic – and this placed the misconduct “at the lower end of seriousness” – he had failed to obtain the SRA’s approval for an extension of time to submit them.
The final allegation concerned a fellow partner authorising payment of a residual balance to charity without obtaining the SRA’s permission.
The unauthorised transfer of client money to charity, together with Mr Keir’s failure in his capacity as COFA to ensure compliance, “rendered the conduct sufficiently serious to amount to professional misconduct”, the SDT concluded.
Deciding on sanction, the tribunal found that the misconduct “arose from repeated failures in compliance and management over a prolonged period, including failures in his capacity as COFA”.
He was a senior solicitor and the firm’s reporting accountants had repeatedly raised concerns about residual balances and non-compliance. But while there was a risk of harm, no actual harm occurred.
The SDT identified “substantial mitigating features”: Mr Keir had enjoyed “a long and otherwise distinguished career without criticism of his client work”, had cooperated fully with the SRA and had made “significant admissions”.
“He had accepted shortcomings in his approach to compliance and demonstrated genuine insight into the matters giving rise to the misconduct.
“The tribunal also took into account the testimonials and positive character evidence before it, the absence of any finding of a lack of integrity, the absence of personal gain or client loss and the considerable personal burden imposed by the proceedings.”
It decided that a reprimand would be the appropriate sanction, while “the protection of the public and the maintenance of proper professional standards” required a restriction preventing Mr Keir from acting as COFA for 12 months.
Before undertaking that role again, he should complete an SRA-approved COFA training course.
Mr Keir was also ordered to pay costs of £39,000.
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