SDT: No reason to keep client account open
A solicitor who allowed his firm’s client account to facilitate a suspicious £1.1m property transaction 20 months after it had closed has been struck off.
The Solicitors Disciplinary Tribunal (SDT) found that Liaqat Ali had also lied to the Solicitors Regulation Authority (SRA) in initially denying any knowledge of what had happened.
Mr Ali, who qualified in 2008, was the owner, director and compliance officer of West London law firm BK Solicitors, which ceased trading in April 2020 after failing to renew its professional indemnity insurance.
Mr Ali confirmed this to the SRA with a firm closure notification form. The regulator twice asked him to file a confirmation statement at Companies House to change its categorisation as a solicitor’s practice but he failed to do so.
The SRA intervened in BK in July 2022, after an intervention into an unrelated firm, Cardinal Solicitors, showed that BK had received the proceeds of a £1.1m conveyancing transaction for which Cardinal had acted for the vendor.
All but £12,100 of the money was then paid out to different third-party accounts.
The SRA told the tribunal that it was not clear why the fee-earner at Cardinal had told the buyer’s solicitor to send the money to BK’s account instead of its own.
Following completion, Cardinal acknowledged receipt of funds and released the transfer form. The seller also confirmed receiving the funds from Cardinal.
In his initial interview with the SRA in June 2022, Mr Ali claimed to have no knowledge of the transaction and denied authorising any of the payments. However, when he was interviewed again a couple of weeks later, he said he had panicked when questioned and that this had been a lie.
He claimed that he had been pressured to make these payments by a non-solicitor who had been added as a signatory to the client account in 2021. He accepted that he had acted naively in relying on what the non-solicitor had told him but denied being dishonest.
The SDT rejected this contention. “As BK was a dormant firm which had closed and ceased trading as of 20 April 2020, there was no legitimate reason to keep BK’s client account open beyond that date,” it said.
“There was no legitimate reason for [the non-solicitor] to be added as a signatory to BK’s bank accounts and no legitimate reason for the payment of £1,102,199.31…
“[Mr Ali] did not make any or any adequate enquiries regarding the purported property sale or as to why the funds were being paid into BK’s client account.”
It should have been “obvious” to him that the payments in and out “clearly [bore] the hallmarks of fraud or other illegality”. He was a director and owner of BK and “participated in or facilitated in the transactions. He played a central role”.
Mr Ali was in Pakistan at the time of the hearing and the SDT refused his application to adjourn. It said the justifications he had provided to the SRA “lacked credibility in that they did not constitute anything approaching a consistent or logical explanation for his actions”.
The SDT also found he had been dishonest in his dealings with the SRA – “It is entirely unclear how exactly the respondent can advance the contention that he lied in the 21 June 2022 interview, but he was not dishonest when he did so” – and failed to effect an orderly shut-down of BK Solicitors.
It struck Mr Ali off and ordered him to pay costs of £30,000.
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