Prowse Phillips Law Limited (Prowse Phillips Law Limited)
158a Liverpool Road North, Maghull, Liverpool , L31 2HP
Recognised body
621870

Decision - Agreement

Outcome: Regulatory settlement agreement

Outcome date: 16 August 2021

Published date: 25 August 2021

Firm details

No detail provided:

Outcome details

This outcome was reached by agreement.

Decision details

1. Agreed outcome

1.1 Prowse Phillips Law Limited (the Firm), a licensed body, agrees to the following outcome to the investigation of its conduct by the Solicitors Regulation Authority (SRA):

1. it is fined £3,500
2. to the publication of this agreement
3. it will pay the costs of the investigation of £1,350.

2. Summary of Facts

2.1 From around April 2018 to March 2020, the Firm failed to maintain its books of accounts in accordance with the SRA Accounts Rules 2011 and the SRA Accounts Rules (the accounts rules).

2.2 During this period, the Firm failed to maintain individual client ledger accounts or a client cash book in a format which was compliant with the accounts rules. This meant the Firm’s books of accounts could not be relied upon.

2.3 The client account reconciliations conducted by the Firm were not compliant with the accounts rules because it did not compare monies held in the Firm’s client account to the Firm’s liabilities to clients.

2.4 Monies due to the Firm had been retained in the client account for longer than permitted by the accounts rules. The Firm made several payments from its client account for liabilities owed by the firm.

2.5 Since April 2020, the Firm has demonstrated that it has taken steps to ensure it properly maintains accurate accounting records and carries out proper client account reconciliations. The Firm now ensures that monies due to it are not retained in client account for longer than permitted by the accounts rules.

3. Admissions

3.1 The Firm makes the following admissions which the SRA accepts:

1. By failing to keep and maintain accurate, contemporaneous, and chronological records the Firm has breached Rules 29.1, 29.2, 29.4 and 29.9 of the SRA Accounts Rules 2011 and Rule 8.1 of the SRA Accounts Rules.
2. By failing to conduct client account reconciliations in accordance with the accounts rules the Firm has breached Rule 29.12 of the SRA Accounts Rules 2011 and 8.3 of the SRA Accounts Rules.
3. By retaining funds due to the Firm in its client account, the Firm failed to keep its money separate from client money and therefore breached Rule 14.2 and 18 of the SRA Accounts Rules 2011 and Rule 4.1 and 4.2 of the SRA Accounts Rules.

4. Why a fine is an appropriate outcome

4.1 The SRA’s Enforcement Strategy sets out its approach to the use of its enforcement powers where there has been a failure to meet its standards or requirements.

4.2 When considering the appropriate sanctions and controls in this matter, the SRA has taken into account the admissions made by the Firm and the following mitigation which it has put forward:

1. there was no loss suffered by any client
2. it has co-operated with the SRA’s investigation
3. it has taken steps to ensure future compliance with the accounts rules.

4.3 The SRA considers that a fine is the appropriate outcome because:

1. the misconduct continued for an unreasonable period of time
2. the Firm had control over and an obligation to ensure compliance with the accounts rules and so it was directly and solely culpable for the misconduct.

4.4 A fine is appropriate to maintain professional standards and uphold public confidence in the solicitors' profession and in legal services provided by authorised persons, because it reflects the seriousness of the misconduct and provides a credible deterrent to the Firm and others. A financial penalty therefore meets the requirements of rule 4.1 of the Regulatory and Disciplinary Procedure Rules.

5. Amount of the fine

5.1 The amount of the fine has been calculated in line with the SRA’s published guidance on its approach to setting an appropriate financial penalty (the Guidance).

5.2 Having regard to the Guidance, the SRA and the Firm agree that the nature of the misconduct was low. The Firm has taken immediate steps to ensure compliance with the accounts rules, has no similar regulatory history and co-operated with the SRA’s investigation. The Guidance gives this type of misconduct a score of one.

5.3 The SRA considers that the impact of the misconduct was medium because while no clients suffered a loss, the failure to properly maintain its books of account had the potential to cause a moderate impact and loss to its clients. The Guidance gives this level of impact a score of four.

5.4 For the purposes of the Guidance, the Firm is not a firm of greater means. The nature and impact scores add up to five. Therefore, the Guidance recommends a broad penalty bracket of £1,001 to £5,000.

5.5 In deciding the level of fine within this bracket, the SRA has considered the mitigation at paragraph 4.2 above which the Firm has put forward.

5.6 The SRA considers a penalty of £3,500, which is just above the middle of the bracket, to be appropriate because the conduct had the potential to cause moderate harm to the Firm’s clients and it was culpable for the failure to ensure its books of account were properly written up. This is balanced by the steps it has taken to ensure it now complies with the accounts rules.

5.7 The Firm did not make any financial gain nor receive any other benefit as a result of its conduct. Therefore, no adjustment is necessary to remove this and the amount of the fine is £3,500.

6. Publication

6.1 The SRA considers it appropriate that this agreement is published in the interests of transparency in the regulatory and disciplinary process. The Firm agrees to the publication of this agreement.

7. Acting in a way which is inconsistent with this agreement

7.1 The Firm agrees that it will not deny the admissions made in this agreement or act in any way which is inconsistent with it.

7.2 If the Firm denies the admissions or acts in a way which is inconsistent with this agreement, the conduct which is subject to this agreement may be considered further by the SRA. That may result in a disciplinary outcome or a referral to the Solicitors Disciplinary Tribunal on the original facts and allegations.

7.3 Acting in a way which is inconsistent with this agreement may also constitute a separate breach of principles 2 and 5 of the Principles and paragraph 3.2 of the Code of Conduct for Firms.

8. Costs

8.1 The Firm agrees to pay the costs of the SRA's investigation in the sum of £1,350. Such costs are due within 28 days of a statement of costs due being issued by the SRA.