The Firm, an SRA-authorised LLP, was owned by the Third and Fourth Respondents. In January 2019, the Second Respondent joined as a trainee solicitor but resigned in October 2019 after the Fourth Respondent raised concerns about the circumstances of her departure from her previous employer. Later that year, she re-established contact with the Third Respondent to introduce a prospective buyer— the First Respondent—who had agreed to supervise her training for £3,000 per month. Although the Second Respondent intended to fund the purchase, the Third Respondent agreed to sell the Firm solely to the First Respondent, who could appoint her (the Second Respondent) as a partner.

The sale completed on 24 January 2020 for £25,001. On the same day, the First and Second Respondents executed the TPA, and the First Respondent became a Firm member on 27 January 2020.

While the First Respondent nominally supervised the Second Respondent, she in practice assumed responsibility for managing the Firm’s operations and accounts. The Third and Fourth Respondents were retained as consultants under the AGBSA to facilitate transition and manage legacy files, with fees remaining in the existing Barclays account. The Second Respondent became a full Firm member on 24 February 2020, and new office and client accounts were opened with Metro Bank.

On 4 October 2020, the First Respondent terminated the consultancy agreements, alleging that the Third and Fourth Respondents had undertaken unauthorised conveyancing. Following this, the Fourth Respondent lodged a complaint with the SRA, asserting that the Second Respondent had received no meaningful supervision and that the TPA had been a means of facilitating payment for her training contract.

The SRA conducted a forensic investigation, which resulted in allegations being brought against all four Respondents.

The First Respondent admitted breaches of the SRA Accounts Rules but denied that his conduct breached the Principles or Code. The Second Respondent initially admitted all allegations but changed her position during the hearing.

The Third and Fourth Respondents denied that they had any knowledge of the TPA’s terms, had been misled as to the Second Respondent’s prior employment and denied any breach of the Principles. The Tribunal accepted their evidence.

The Tribunal found that the First and Second Respondents had breached the Principles, the SAR, and the Code. All allegations against the Third and Fourth Respondents were dismissed.