Law firms should ensure they have an exit strategy to close down their businesses in line with proper procedures, the Solicitors Regulation Authority (SRA) has advised after a series of related Solicitors Disciplinary Tribunal (SDT) hearings.
The Tribunal fined five solicitors in April in cases brought by the SRA where the firms failed to follow the correct process for closure.
Gordon Ramsay, SRA Director for Legal and Enforcement, said: “Firms have professional responsibilities, and those responsibilities remain when a firm is closing down. The need to think about the impact on clients becomes more important when the firm faces closure, voluntary or otherwise.
“This is not an issue about affording run-off cover or finding a successor practice, which we know can often be a problem for those looking to close down. It is about ensuring the interests of clients and others are fully protected.”
The SRA provides detailed guidance on winding down on its website including an at-a-glance a checklist to help firms get it right and ensure their clients are not put at risk. The SRA’s guidance on closing down is available here:
Fines issued by the SDT for failure to close properly were:
- 14 April: David Alan Eager, fined £1,000 and ordered to pay £13,000 costs
- 15 April: John Bryon Sampson and Angela Susan Marshall, fined £2,500 and £1,000 respectively and ordered to pay £11,000 costs
- 21 April: Justin Philip Huntly Nelson, fined £2,500 and ordered to pay £5,200 costs
- 23 April: Ian Robert Gannicot, fined £5,000 and ordered to pay £12,770 costs
The SDT aims to publish its decisions on these matters on its website, www.solicitorstribunal.org.uk within seven weeks of each hearing. Appeals can be lodged within 21 days of these decisions being published.
The tribunal keeps a rolling log of decisions made on its sanctions sheet here: https://www.solicitorstribunal.org.uk/download.aspx?filename=Sanction%20Spreadsheet%202015.xlsx&ignoreCheck=1. This is an Excel spreadsheet.