The matter arose following a referral to the Solicitors Regulation Authority (“the SRA”) by RPC, who acted for the Firm’s professional indemnity insurers. The referral itself arose out of a claim brought against the Firm by a former client (“Client A”) alleging unauthorised deductions from client account monies in connection with a commercial conveyancing transaction.

Upon receipt of RPC’s report, the SRA commenced an investigation into the conduct of the First and Second Respondents. Following the conclusion of that investigation, the SRA decided to bring disciplinary proceedings before the Tribunal.

At the material time, the Respondents were solicitors practising as AAG Legal Services Limited (later Eldons Berkeley Limited) (“the Firm”). The First Respondent was a director of the Firm and held compliance roles. The Second Respondent was also a director of the Firm for part of the relevant period.

The events giving rise to the allegations arise out of the Firm’s involvement in a number of interconnected matters, including litigation conducted on behalf of a commercial client (“Client D”), a dispute concerning an alleged entitlement to part of the Firm’s fees by a third party, Mr Mark Berman (“Mr Berman”), and a commercial conveyancing transaction undertaken for Client A relating to the sale of a property (“Property E”).

Following completion of the conveyancing transaction in respect of Property E, monies held to the credit of Client A’s client account were utilised to make (i) a payment to Mr Berman, and (ii) a further payment representing additional costs said to have been incurred by the Firm. It is the propriety of those payments, and the Respondents’ respective involvement in them, which form the core of the allegations before the Tribunal.

Broadly stated, the SRA alleged that the Respondents caused or permitted client monies held for Client A to be used to satisfy liabilities of the Firm without Client A’s authority, in breach of the Solicitors Accounts Rules and applicable Principles. In the case of the First Respondent, the SRA further alleged that additional client monies were withdrawn in respect of costs without proper notification.

The First Respondent denied acting dishonestly and disputed that he caused or permitted the improper use of client monies. He maintained that the payment to Mr Berman was the result of actions taken by others and that, in respect of the additional costs, there was a legitimate basis for recovery. He further disputed the allegations concerning statements made in later court proceedings and the loan application.

The Second Respondent also denied acting dishonestly and contended that he believed any payment made to Mr Berman would be met from the Firm’s own funds rather than client monies. He maintained that he did not authorise, and was not aware of, the use of Client A’s monies held in the Firm’s client account.

The Tribunal sat for 12 days. It heard oral evidence from both Respondents and five other witnesses and considered substantial documentary material.

Both Respondents were found to have participated in the misconduct forming Allegations 1.1 and 2.1, and the associated breaches were proved. The Tribunal also found the remaining allegations and associated breaches against the First Respondent proved, save for Allegation 1.3.2, which was not proved. In light of its findings, the Tribunal directed that both Respondents be struck off the roll.