Insurance: Firm operated without cover
A solicitor who admitted telling his indemnity insurer that he was the sole signatory on client account when he was not a signatory at all has been suspended for two years.
Mohamed Faisal Mamon also admitted practising for six months without professional indemnity insurance (PII) – during which time £1.7m passed in and out of client account – and failing to maintain proper accounts for former London law firm Ivy Solicitors.
The Solicitors Disciplinary Tribunal (SDT) approved a statement of agreed facts and outcome between the Solicitors Regulation Authority (SRA) and Mr Mamon, which said the solicitor’s misconduct was “serious and involved multiple instances of recklessness and lack of integrity”.
Mr Mamon was an experienced solicitor with “direct control and responsibility” for the circumstances giving rise to the misconduct.
It was aggravated by the fact that it took place over a “significant period of time”, but mitigated by the solicitor’s “remorse and co-operation with the SRA” once the investigation into his firm, followed by an intervention, took place.
The tribunal heard that Mr Mamon, born in 1985 and admitted in 2014, became a co-director of Ivy Solicitors in April 2022. The other director resigned in December 2022, leaving him as sole director. He had taken over the compliance officer roles the previous month.
In January 2023, the SRA asked Mr Mamon for a copy of Ivy’s PII certificate. The SRA launched an investigation in April 2023 and closed the firm in June 2023.
Ivy Solicitors’ PII with Aspen Insurance UK ran to 31 October 2022 and was not renewed, but Mr Mamon provided the SRA with a copy of a Hera Indemnity PII proposal form that he had completed in October 2022, when he still had a co-director.
Asked at what threshold two signatures were required to authorise payment from a client account, he replied that he was the sole signatory.
However, Mr Mamon later admitted that his co-director had sole control of the office and client accounts at the time.
Mr Mamon admitted acting recklessly in providing inaccurate and/or misleading information on the application.
He also admitted failing to tell the SRA that, following the expiry of its indemnity insurance, Ivy entered the regulator’s extended policy period, followed by the cessation period.
Further, he admitted then acting recklessly by carrying on practice between 1 December 2022 and 1 June 2023 without cover.
From 31 October, Mr Mamon also failed to maintain proper books of account, including recording dealings with client money and completing client account reconciliations.
As a result, the SRA said it could not be sure the firm had sufficient funds to meet its liabilities.
In non-agreed mitigation, Mr Mamon said that, following “this experience and a sustained period of reflection”, it was “unlikely” that he would return to legal practice.
The SDT said neither a reprimand nor a fine was appropriate, since they were not “commensurate with the seriousness of Mr Mamon’s regulatory failing”.
He was suspended for two years and ordered to pay £24,700 in costs.