‘Risk of substantial harm’
International law firm Kennedys has been fined £18,000 by the Solicitors Regulation Authority (SRA) after it allowed its client account to be used as a banking facility during a commercial property deal.
In a decision published last week, the regulator found that payments were made out of the firm’s client account between late 2016 and early 2018 during a commercial property matter that were not connected to any underlying legal services being provided by the firm.
The SRA said this amounted to a breach of its account rules, which prohibit firms from providing banking facilities through their client accounts. Any transfer of client money must relate to legal services or transaction being carried out by the firm.
In its decision, the SRA said Kennedys’ conduct created a “risk of substantial harm”, including the possible loss of funds entrusted to the firm by third parties.
Despite this, the regulator concluded that the misconduct was not deliberate or reckless. The firm admitted the breach and expressed “remorse and regret”, factors which were taken into account when determining the penalty.
Alongside the £18,000 fine, Kennedys was also ordered to pay £1,350 in costs.
The latest regulatory run-in comes less than a year after the firm apologised for a separate blunder involving a data leak of the email addresses of 194 individuals and law firms signed up for updates on the Church of England’s redress scheme for historic church abuse cases.
