SDT: Solicitor put his head in the sand
A solicitor who held nearly 1,500 historical client balances and whose failure to remedy accounts rule breaches was described as a “complete dereliction of duty”, has been suspended for two years.
Jonathan Andrew Simon admitted that he buried his head in the sand over the multiple breaches, which he failed to remedy despite seven accountant’s reports and three forensic reports by the Solicitors Regulation Authority (SRA).
The SRA found that residual balances dating back to the beginning of the century.
In an agreed statement of facts and outcome with the solicitor approved by the Solicitors Disciplinary Tribunal (SDT), the SRA went on: “Files were archived without money being returned to clients or paid to beneficiaries, or without the clients being informed of the sums retained, for lengthy periods of time.
“At a most basic level it is clear that for years the respondent failed to establish and maintain proper accounting systems or to have proper control over those systems, to ensure compliance with the rules and the state of the accounting records was dire.”
Acknowledging that there was “no evidence of dishonesty or malicious intent” on the part of Mr Simon and no loss of client money, his failure to comply with the accounts rules “at the very least put client monies at risk”.
Mr Simon, sole principal of JA Simon & Co in Liverpool, was admitted in 1978 and his main areas of work were conveyancing, wills and probate and family law. The regulator shut down the firm in July 2020 after three forensic investigation reports in three years.
The SRA said that, as at December 2019, there were 1,422 historical client balances which totalled over £232,000 on files that had not moved for over a year.
“Ten files were reviewed, of which eight had balances which had not moved for over 12 months. One file had been destroyed, one had been removed from the practice by a previous employee and six were in storage.”
Mr Simon admitted to the SRA that he had known about the problem of historic balances for four years and replied: “I’m the first to admit that probably you, you then bury your head in the sand, and you say yes, we’ll get round to doing it.”
In one matter, a client died in 2011, leaving his estate to charity. The SRA discovered in early 2020 that £80,000 had been retained by the firm and not paid.
“The only set of estate accounts on the file were partially completed and were undated. The details of the proceeds of the sale of the property, legal fees and totals were left blank.”
Asked why the file had been archived, Mr Simon said: “I think at the time when it was archived I had planned to deal with the account balances, and it was just one of those, it just fell through the gap.”
Following the investigation, the charity was paid the £80,000 and plus £1,000 compensation for interest and delay, and a £1,000 reduction in Mr Simon’s bill of £7,500 plus VAT.
In relation to another matter, he said that once archived it was “out of sight out of mind [and] just gets forgotten about”.
The solicitor admitted failing to maintain proper accounting systems or records, failing to promptly return money to clients or pay legacies to beneficiaries, and failing to carry out client account reconciliations.
Mr Simon contested an allegation of manifest incompetence and the SRA withdrew it on the basis that it would not be proportionate to hold a hearing just on that point in the circumstances.
The SDT said the maintenance of accurate accounts was a “vitally important responsibility in which the respondent had failed to a very significant degree over an extended period of time”.
The failure to remedy breaches “highlighted on numerous occasions” by his regulator amounted to a “complete dereliction of duty”.
Mr Simon agreed that he should be suspended for two years, pay costs of £12,000, and when the suspension ended, be subject to conditions on his practising certificate preventing from being a manager or owner of a law firm, a COLP or COFA, or handling client money.