Accounts: Client money held longer than necessary
Three former directors of a now-defunct North London law firm have been rebuked for allowing it to accrue hundreds of dormant balances and five suspense ledgers that between them held £930,000.
James Mark Tompkins, Aminta Sherine Silva, Karen Rieveley were all sanctioned for breaches of the accounts rules at Hodders Law, which was sold in a three-way pre-pack in September 2022.
According to the Solicitors Regulation Authority (SRA), it identified that, on 23 September 2022, the firm had 408 client ledgers holding a combined total of £351,141, where there had been no transactions since 31 December 2019 at the latest.
Further, the firm had five client account suspense ledgers holding a total of £578,337. This amount had been reduced to £21,115 by the date of the SRA’s forensic investigation report in August 2023.
Suspense ledgers should only be used as a short-term ‘holding’ account and firms should deal with any funds placed in them within 30 days
The regulator said each solicitor had failed to ensure that client money was returned promptly to clients as soon as there was no longer any proper reason to hold those funds, and failed to ensure the firm kept and maintained accurate, contemporaneous and chronological records in client ledgers.
A rebuke was an “appropriate and proportionate” sanction. While a solicitor’s stewardship of the public’s money should be “beyond reproach” and their actions had the potential to cause harm, there was no evidence that client money had been misappropriated and no shortage on client account.
Further, there were no allegations of dishonesty or lack of integrity and the trio had not acted intentionally or recklessly in breach of their regulatory obligations.
Hodders Law, which had four offices and 40 staff, went into administration having racked up £1.8m in liabilities to HM Revenue & Customs during the pandemic and struggled to repay them.
Its practice was split up between Taylor Rose – where Ms Silva and Ms Rieveley now work – JPC Law, where Mr Tompkins works, and Hunters Law.
