Accounts: Multiple rule breaches
A solicitor who admitted to a “serious breach” of the accounts rules – in part due to the impact of Covid – has escaped with a rebuke from the Solicitors Regulation Authority (SRA).
The multiple failures by Alisha Butler, owner and sole director of Birkenhead firm Phoenix Legal could have led to a referral to a disciplinary tribunal but her misconduct was instead resolved through a regulatory settlement agreement between her and the SRA.
An investigation triggered by a qualified accountant’s report found that the firm was unable to demonstrate that reconciliations had been carried out at least once every five weeks and had failed to keep and maintain proper and accurate accounting records.
Further, there was a shortage on client account of £2,072 as at 31 March 2021, caused by liabilities in six client matters not being shown in the books of account. Ms Butler addressed this by “making the appropriate payments from the office account during the SRA inspection”.
In addition, client money had been dealt with through a non-client bank account between September 2017 and October 2020.
Ms Butler admitted breaching several accounts rules and SRA principles.
In mitigation, she said the issues were “exacerbated due to the difficulties in recruiting experienced staff during the height of the Covid-19 pandemic”.
The use of a non-client bank account was not intentional “as the bank erroneously advised her and issued a paying in book that incorrectly stated that the account was a client account”.
Ms Butler also co-operated with the investigation and “took prompt steps” to rectify the problems.
In deciding that a written rebuke was an appropriate sanction, the SRA said the issues found “resulted in a serious breach of the SRA Standards and Regulations”.
However, Ms Butler had shown insight and taken steps to strengthen accounting procedures at the firm, while there was no loss or “lasting significant harm” to any clients or third parties.
All outstanding issues have now been dealt with “and there is a low risk of repetition”.
At the same time, the SRA said, “some public sanction is required to uphold public confidence in the delivery of legal services”.
