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"A bit late, but thanks"

The SRA has fined a law firm almost £121,000 for paying out the wrong sums to beneficiaries of an estate, and then failing to replace the client money for eight years.

Norwich-based firm Hansells was instructed to deal with the administration of an estate in 2001. The firm distributed money from the estate incorrectly, “due to a mistake in the interpretation of the rules of intestacy," the SRA said in its statement on the decision. 

The firm paid out money to beneficiaries "in the wrong amounts" which meant that client money was "improperly withdrawn from the client account.”

When the firm became an Alternative Business Structure in 2014, it had a shortfall in its client account of £22,000, but this was not replaced until 2022, after a qualified accountant’s report. 

Although the breach was eventually rectified, the SRA held that it had persisted for "longer than was reasonable and only when prompted." The beneficiaries to the estate did not receive their proper entitlements for years, while some of them "were elderly, and passed away before they could be properly paid.”

The firm’s conduct was "serious" to warrant a fine, held the regulator, as "any lesser sanction would not provide a credible deterrent to the firm and others”. The firm had "failed to uphold public trust and confidence in the profession" and the conduct continued “even after it was known to be improper”.

The substantial fine, which represents 3.2% of the firm's turnover, partly reflects the fact that some of the beneficiaries died before the issue was resolved, said the SRA. 

In mitigation, the SRA noted that there were no findings of dishonesty or a lack of integrity, and the firm had made some admissions, “albeit only once the matter had been referred to a decision maker”.

The SRA also dished out a fine of around £3k to the solicitor who conducted the file, Roger Holden (now the firm's chair). The firm and Mr Holden were each ordered also to pay the SRA costs of £1,350.

The Norwich firm may be hoping for better headlines in the second part of the year, as an ex-partner featured in the news again recently for failing in his appeal against a jail sentence, after defrauding clients.

Kathryn Hirst, managing partner at Hansells told RollOnFriday: “We, at Hansells, extend our sincere apologies for the historical mishandling of an estate matter."

“We are committed to ensuring such errors do not recur, and to maintaining the trust and confidence of our clients and the public through exemplary service and adherence to the highest standards of professionalism," she said. "Indeed, we have bolstered our compliance support both internally and externally, and we have already introduced a buddying system, promoted collaboration amongst colleagues and undertake regular reviews." 

She added: "We are excited about the future direction of the firm, which includes further training at all levels".

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