Tribunal lifts practising controls from ABS accountant

SDT: Exemplary conduct

The Solicitors Disciplinary Tribunal (SDT) has lifted practising restrictions on a finance director who was sanctioned less than three years ago, over the objections of the Solicitors Regulation Authority (SRA).

Jon Paul Else is the finance director of Forster Dean, a four-office law firm in the north-west and also of its subsidiary alternative business structure (ABS), Hayes Connor.

In December 2016, he admitted to acting with a lack of integrity over accounts rule breaches when he was its compliance office for finance and administration (COFA).

He admitted five allegations of wrongdoing and was made subject to an order under section 43 of the Solicitors Act 1974, which prohibits him working for an SRA-regulated business without its permission.

The SRA’s outline response to Mr Else’s application to revoke the order so he could become a full director of the ABS was that this would be “catastrophic”; although at the hearing its counsel accepted that the word was “pejorative”, he maintained that Mr Else operating in an ABS without any regulatory constraint was an “obvious risk”.

The SDT said it was impressed with testimonials and by the fact that the accountant had continued to work at Forster Dean, with the SRA’s permission, with no negative consequences.

Forster Dean was subject to a pioneering management buy-out in 2007 and quickly grew its network of offices – to 29 by 2012 – as it looked to establish a national high street presence. However, since then, the firm has changed and contracted the number of offices significantly.

In 2016, Mr Else was one of six directors of Forster Dean accused of near-identical charges dating back to 2011 of retaining money received for disbursements in the firm’s office account for periods longer than those prescribed by the accounts rules.

They were further charged with failing to remedy the breaches promptly on discovery and, with one exception, allowing the firm to “revert to such practices” around May 2012.

They were also alleged to have failed to run the firm effectively by not having systems in place to “identify, prevent and rectify” the breaches, while Mr Else was charged also with failing to ensure the firm’s compliance with the accounts rules and failing to act with integrity.

Five of the six accepted fines as part of agreed outcomes – Mr Else was fined £10,000 – with only former chief executive Greg Shields contesting his charges; he was suspended for nine months.

The SRA allowed Mr Else to continue in his role, with the title of director but not in a statutory sense, and earlier this year he applied to lift the section 43 order.

He told the tribunal that it was “a stigma” and that he was required to disclose it in every meeting.

The SDT recorded: “It had not affected his ability to do his job but it has made it harder. [Mr Else] told the tribunal that the application was being made not for his personal financial gain but because the other three directors wanted him to play an equal role.”

The evidence from Forster Dean director William Betts was that Mr Else had helped avert the possible collapse of the firm in 2013.

Mr Else’s counsel said the application was not premature; the issues had been reported to the SRA in 2013 and the order should have been imposed the following year, not in 2016.

He also referred the tribunal to a large number of testimonials, including from the firm’s bank and its auditors.

The SRA argued that the section 43 order was a measure of regulatory control that was working and should continue.

“The application was predicated on [Mr Else’s] future ambitions in that he wanted a highly significant role in the profession, which connoted a degree of risk,” it said, pointing out that the matters that had given rise to the order were serious. He had been aware of the breaches “and had done nothing during a 13-month period to stop them”.

Revoking the section 43 order, the tribunal noted six years had passed since the misconduct, from which time Mr Else’s conduct had been “exemplary”.

Both his evidence and that given on his behalf had been “open, honest and straightforward”.

The SDT found the SRA’s use of the word ‘catastrophic’ to describe lifting the restrictions to be “inconsistent” with the fact that the regulator had approved his current role.

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