Legal Business Blogs

Partner fined after failing to report ‘serious financial difficulties’ to regulator

A former partner of now defunct firm Tracey Barlow Furniss & Co has admitted he failed to report his firm’s ‘serious financial difficulties’ to the Solicitors Regulation Authority (SRA), accepting a rebuke and over £2,000 in fines.

By admitting the failure, Jamie Lee Ratcliffe has avoided an appearance in front of the Solicitors Disciplinary Tribunal (SDT).

Tracey Barlow closed down in August 2014, after the SRA had sent its Forensic Investigation Unit to scrutinize the firm in April of that year. The SRA’s report into the firm indicated there were ‘a number of financial irregularities,’ and said its financial position was ‘a material risk to the firm and its clients.’ According to the report the firm owed the Bank of Scotland over £380,000 and was behind on HMRC payments with over £200,000 outstanding.

While Ratcliffe left the firm in the May of 2014, after more than a decade of service, he was reported to the SDT by the SRA.

Ratcliffe accepted the SRA’s findings that he failed to report the firm’s serious financial difficulties, breaching Principles 7 and 8, and Outcome 10.3 of the SRA Code of Conduct. The chapters outline a solicitor must ‘run [their] business or carry out [their] role in the business effectively and in accordance with proper governance and sound financial and risk management principles’.

Ratcliffe, who now works as a solicitor at Doncaster firm Grainger Appleyard, has been given one month to pay the fine, and cannot deny the charges he admitted, or he will risk facing the SDT.

A spokesperson for the SRA said it would try to work with a firm to look at ways in which a business can get back on track, but clarified: ‘Our first priority is to protect the public interest, so we have no choice but to intervene into a business when we believe these interests are threatened. It would be better for all concerned if we could avoid these situations in the first place. For that we rely on firms to look for help as soon as possible.’

Fox Williams partner Doug Preece said partners usually rely on a compliance office or managing partners to report serious financial difficulty to the SRA.

He added: ‘This serves as a reminder to all partners that they have a personal reporting obligation in those circumstances and cannot delegate that duty to others. If there was no report to the SRA by any partners, we would expect to see action being taken by the SRA against the other partners at the firm.’