A solicitor who retained nearly £50,000 of client money for up to five years instead of paying professional disbursements has accepted a rebuke and fine to halt her referral to the Solicitors Disciplinary Tribunal.
Nancy Kan-Hai Beeley, formerly of Beeley & Co in Stockport, was found to have allowed a cash shortage of £49,849 to build up in the firm’s client account.
A regulatory settlement agreement published by the Solicitors Regulation Authority last week said this was caused by unpaid professional disbursements ranging in value of between £8,172 and £25 which had been received into the firm’s office account and retained there for periods of between 54 and 1,763 days – dating back to 2010.
The position was remedied in September 2015, less than a month after the SRA first visited the firm and uncovered the problem, but in June 2016, an SRA official decided that Ms Beeley should face proceedings before the tribunal.
However, Ms Beeley has instead accepted the terms of the agreement, in which she acknowledged her breach of the SRA principles and the accounts rules and was rebuked and fined £2,000. She also agreed to pay £1,134 in costs.
In mitigation, she said that at the time she had been ignorant of rule 17.1(b) of the accounts rules, which says that by the end of the second working day following receipt of money from the client, a solicitor must either pay any unpaid professional disbursement, or transfer a sum for its settlement to a client account.
Ms Beeley also pointed out that she remedied the breach promptly upon discovery, and that “she made full and prompt admissions of her misconduct to the SRA”.
In another agreement published last week, Mark Periklis, formerly of Mark & Co in Potters Bar, Hertfordshire, was also rebuked and fined £2,000 for multiple accounts rule breaches. He agreed to pay £600 in costs.
The SRA found 71 debit balances on the firm’s client account, ranging from £3 to £12,437, “which arose because Mr Periklis paid out more money on some matters than he was holding for them”.
The SRA also found that £28,794 of client funds had been held in respect of 359 clients for more than 12 months.
“There was no evidence to show that the funds had been returned to clients promptly following conclusion of the matter or that clients had been contacted and provided with an update on why their funds were still with the firm.”
The agreement said that as a result of ill health, Mr Periklis had decided that he no longer wished to run his own practice and in April this year it was taken over by a successor practice. Mr Periklis has decided to retire from practice.
“The successor practice has provided evidence to the SRA of the steps they have taken to reduce the debit balances, with most balances now having been cleared. In addition they have also taken over the responsibility of returning client funds and have contacted clients to return money which is owed to them,” the SRA said.
“In deciding that the agreed outcome is proportionate, the SRA has taken into account Mr Periklis’ mitigation that he employed experienced book keeping staff following the initial attendance by the SRA to ensure that there was adherence to the accounts rules and that all breaches which had been identified were rectified.”