The SRA prosecute breaches of the SRA Accounts Rules 2011 on a strict liability basis. This is their (and the Tribunal’s) interpretation of Rule 6. Consequently solicitors referred to the Solicitors Disciplinary Tribunal for breaches of the SRA Accounts Rules 2011 (and its predecessor rules) have no option but to admit to technical breaches even when no one has been prejudiced by them. This leaves the Respondent solicitor with a finding that is likely to be viewed as ‘professional misconduct’ even if in fact it isn’t. In a recent case before the Solicitors Disciplinary Tribunal we successfully argued that a breach of the Accounts Rules 2011 did not constitute professional misconduct.
On many an occasion, minor breaches of the Accounts Rules are alleged in the Tribunal e.g. what is now Rule 17.1(c) which requires funds paid into client account to be transferred into office account within 14 days if received as payment of a bill. Understandably solicitors don’t wish to take the risk of wrongly paying client money into office account and so many have all receipts of money paid into client account. Smaller firms without a great deal of bookkeeping support may not well consider which funds that can be transferred until after the monthly reconciliation has taken place and outside the 14 day time limit.
When facing an SRA investigation of your firm’s accounts, there are ways to minimise the risk of prosecution for breaches of Accounts Rules. If it’s too late and you are being prosecuted, it’s not necessarily the case that a finding of professional misconduct should additionally be made. If this blog is relevant to you, please feel free to give Robert Forman a call on 020 8530 7291 to discuss how we can assist.