Solicitor suspended for two years over accounts failures

The former owner of Liverpool-based J A Simon & Co Limited has been suspended for two years and ordered to pay £12,000 costs after a string of accounting failures at the firm. 

Jonathan Andrew Simon, admitted in 1978, was the sole owner, director and manager of the firm, assisted by one qualified member of staff and one unadmitted employee. He was also the firm’s compliance officer.

Accountants reports dating back to 2013 identified issues and breaches of accounts rules. The firm was subject to forensic investigations in 2016 and 2018, which identified a host of failures. Simon assured the SRA the issues would be resolved, but they were not. 

The firm, whose main areas of work were conveyancing, wills and probate and matrimonial, closed after an SRA intervention on 6 July 2020. Simon’s practicing certificate was suspended, but this was lifted and made subject to conditions in September 2020.

The allegations heard by the Solicitors Disciplinary Tribunal (SDT) related to a lack of progress in rectifying the accounts issues. 

The SDT heard Simon had failed to maintain proper accounting systems, proper control of those systems or proper accounting records for a period of eight years prior to the firm’s closure in July 2020.

There was no evidence of loss of client money, but the firm had failed to return client money promptly or inform clients of money retained by the firm. It had also failed to promptly pay out legacies to beneficiaries of estates or to ensure adequate client account reconciliation. 

Numerous client files showed historic balances, some that were no longer on-going matters and some where no progress had been made for over a year. Simon had been advised by an accountant that clients should be contacted at least once a year where balances were held.

A 2017 accountants report noted several residual balances, including a balance of almost £350,000 which had not moved between August 2015 and June 2016. 

The figure included a balance of almost £40,000 understood to relate to a 2002 conveyancing matter, the file for which had been destroyed. There was also a potential unidentified surplus of just over £97,000 relating to another conveyancing matter.

A 2018 accountants report highlighted similar issues, but it appeared these were being addressed and accounting records had been brought up to date.

However, in 2019, the client account reconciliation showed £41,700.49 of unreconciled adjustments, an increase from the 2018 figure. 

As at February 2020, they had been reduced to £8,200.51; however, there remained adjustments that had not been dealt with from 2015 onwards. 

The SRA acknowledged significant progress had been made with remedial action before the intervention and that Simon’s conduct was not malicious or dishonest, but the tribunal said the maintenance of accurate accounts was a “vitally important responsibility” in which Simon had failed to a “very significant degree” over an extended period. 

The failure to remedy breaches highlighted by the regulator on numerous occasions amounted to a “complete dereliction of duty”. 

Simon told the SDT, “you… bury your head in the sand”. However, it was submitted that the notice of an intervention had been a “wake up call… evaporating any continuing procrastination on his part”.

Simon admitted the issues and accepted the agreed SRA outcome. Conditions will be placed on his practising certificate indefinitely at the end of the suspension.

He described himself as an “honourable, hard-working and honest solicitor”. The firm had switched book-keeper between 2012 and 2016 and “too much reliance” had been placed on the ability of the book-keeper. Simon said the pandemic also presented challenges with addressing the issues, with storage facilitates where historic files were archived being closed.