A solicitor already struck off in Ireland for a different offence has now been struck off in England and Wales after using one client’s money to pay another’s stamp duty land tax (SDLT) liability.
Oliver John Anthony Hanrahan also wrongly accepted a £10,800 payment from his client directly into his personal bank account, which was a ‘bonus’ for the extra work he had done on the file, and did not declare it to his employer.
His supervising partner, David Berens, was fined £7,501 and made subject to restrictions on his future practice for his various failures, including accidentally returning a £95,000 deposit to a client twice.
The Solicitors Disciplinary Tribunal (SDT) approved an agreed statement of facts and outcome between the pair and the Solicitors Regulation Authority (SRA). They had worked at Fuglers (in association with David Berens & Co), a London firm which closed in December 2019.
The agreement recorded that the SDLT payment in 2017 of nearly £130,000 – Mr Hanrahan was acting for both clients on separate matters – was “most likely” an error on his part.
“This failure damages the public trust and confidence in the solicitors’ profession and demonstrates that he did not act in the clients’ best interest and he failed to protect client monies.”
Accepting and failing to disclose the £10,800 payment “represents a lack of integrity and demonstrates behaviour which would damage the public’s trust in both him and the provision of legal services”, the SRA said.
Mr Hanrahan, who qualified in England and Wales in 1994, had been a salaried partner at Fuglers but was a consultant at the time of the misconduct. He told the SRA in 2020 that he had retired.
The SDLT payment was made on the wrong property in 2017 but the error only discovered in 2019 when HM Revenue & Customs said it was still outstanding. Fuglers’ professional indemnity insurer made good the money and the payment was made.
In mitigation, Mr Hanrahan said that, even though the original error was his, there were still two more steps required before the payment was made, for which he was not responsible.
He was struck off in Ireland in 2015 for failing to comply with an undertaking and not co-operating with his regulator in its investigation.
The fact the misconduct at Fuglers occurred shortly after this was a “significant aggravating feature”, the SRA said.
Mr Berens had worked at the firm since 1998, having qualified a decade earlier, and at the time held both compliance officer roles.
As the only personal responsible for authorising payments from client account, he admitted allowing the SDLT payment to be made from the wrong account and failing to notify the affected clients for at least eight months – although ultimately they did not lose out.
He also admitted authorising the duplicate payment of £95,000, which again led to a pay-out from the firm’s insurer, with the client not returning it to date.
Mr Berens admitted to multiple other accounts rules breaches, the firm having received a qualified accountant’s report for five years running to 2017.
This was his second appearance before the tribunal. In 2013, he was fined £20,000 for his role in allowing the firm’s client account to be used as a banking facility – out of a then-record £75,000 fine imposed and later upheld by the High Court.
“[This] demonstrates that he must have known the importance of managing the client account appropriately, and ensuring that all payments in and out of the account were ones that could properly be made,” the SRA said.
Included in Mr Berens’ mitigation was that no clients suffered any financial loss, he had spent £31,000 of his own money “indemnifying clients and fixing the client account shortfall”, and there were no allegations of dishonesty or a lack of integrity.
As well as the fine, Mr Berens was made subject to an order banning him from holding a managerial or compliance role or having responsibility for client money.
Mr Hanrahan was ordered to pay costs of £10,000 and Mr Berens £7,500.