A sole practitioner’s wife, who worked at his firm as bookkeeper before being dismissed by her husband, is set to escape a hearing at the Solicitors Disciplinary Tribunal (SDT).
Mrs H admitted withdrawing and transferring money from client account without sending a bill of costs, misappropriating client money by making unauthorised withdrawals and failing to co-operate with the SRA.
The SRA said in a regulatory settlement agreement that if the SDT withdrew proceedings against Mrs H, she would be banned from working for law firms.
The regulator said proceedings would continue to be taken at the SDT against her husband, Mr H, who ran the firm, supervised his wife and “was primarily responsible” for the misconduct.
Mrs H was responsible for maintaining the account books at H Solicitors in London’s East End. She was dismissed in March 2014, and the firm “later ceased” in September that year.
In the agreement, the SRA said Mrs H was “provided with details for firm’s client account online banking facility, which included passwords for the account, to enable her to authorise online transactions”.
The SRA said the first report by its forensic investigation unit in May 2013 found that the account books were not in compliance with the accounts rules and there was a cash shortage on client account of £18,387.
The shortage was caused by unpaid professional disbursements of £14,746 being incorrectly retained in the office bank account, and a debit balance on client account of £3,640.
A second report, completed in May 2014, found that there was a cash shortage in client account of £85,824, “which was not shown by the books of account”. It was “partially rectified” during the investigation, so that only around £5,800 remained outstanding.
The SRA said: “Mrs H was responsible for the shortage on client account which was created by her transferring funds from client to office account and subsequently to a joint bank account, which was in her name and that of her husband.
“From July 2013 to December 2013, the investigation officer (IO) identified 28 transactions totalling £64,700 where round sum transfers had been made from client account to office account.
“The IO noted there was no documentation or invoices raised to support these transfers. Between 12 July 2013 and 27 December 2013, £44,570 was paid into the joint bank account. The IO was not able to identify what happened to the balance of £20,130.
“The firm confirmed that client funds had been misappropriated by the incorrect transfer of funds into the office account and subsequently into the joint bank account.”
The SRA said the IO continued to request accounting information from Mrs H, with limited success, until she was dismissed.
The regulator decided in February 2015 that Mrs H and her husband should be referred to the SDT. The tribunal has been invited to withdraw the SRA’s allegations against her on the basis of the regulatory settlement agreement.
In mitigation Ms H confirmed she had made transfers totalling £64,700 between July 2013 and December 2013, but said “bills had been rendered for most of the transfers”.
“[She] stated that no clients had suffered any loss. She was very sorry that her actions had led to proceedings and was sorry for the trouble that she had caused.”
Mrs H provided medical evidence that she was “severely unwell” and “it was unlikely that there would have been any periods between July 2013 and December 2013 when Mrs H would have been able to fully recognise and understand the impact of what she was doing”.
The SRA said that, once the SDT agreed that proceedings could be withdrawn against Mrs H, she would be subject to a section 43 order, banning her from working for law firms.
The regulator added that she had agreed to pay legal costs of £5,500.
We anonymised the details of Mr and Mrs H in July 2021 given the passage of time and the fact that he now has a full practising certificate with no conditions.