Solicitor helped himself to money in client account after ‘tidying -up” exercise

A solicitor who helped himself to client money while carrying out what he claimed was a “tidying-up” exercise of historic client account balances has been struck off by the Solicitors Disciplinary Tribunal (SDT).

The tribunal decided [1] that Vernon Burke’s actions showed a “lack of moral soundness, a lack of rectitude and no adherence to an ethical code”.

It said Mr Burke had “maintained that bills had been sent out but had provided no evidence to support this assertion and he had not been believed in this regard”.

Acknowledging that this was a “sad case”, the SDT went on: “If the tribunal did not strike the respondent off, there was risk of harm to the public, not from the respondent who the tribunal considered would have learnt his lesson, but from the message that would be sent to the profession that it was acceptable to help oneself to small amounts of client money if subsequently it was repaid.”

The tribunal said client money was “sacrosanct” and had to be safeguarded.

Mr Burke, 57, was a sole principal, practising family law from Bridge Burke Solicitors in Kingston, Surrey, since 2005. He qualified in 1992.

The Solicitors Regulation Authority (SRA) found out in 2015 that the firm’s accountant’s report had been qualified the previous year for having debit balances on client account. An investigation was launched and Mr Burke was referred to the tribunal last autumn.

The tribunal said Mr Burke was not a “credible witness”, and was “evasive” in his oral testimony, often failing to answer the questions he had been asked.

There were “stark inconsistencies” in his evidence, which the tribunal described as “wholly unconvincing”.

Mr Burke was found to have acted dishonestly and with a lack of integrity when he “cleared off residual balances on client accounts to a total value of £3,826 by issuing bills of costs and paying them from client funds when there was no proper justification to do so and without first sending those bills or other written notifications of the costs to the relevant clients”.

The tribunal said a “solicitor of integrity did not clear off residual balances, however small, without first taking steps to be absolutely certain he was entitled to the money”.

If there was no evidence on the files, he would “simply rely on his memory as to the work he thought he had done for each client”.

The SDT said that Mr Burke had argued that 17 bills were sent as part of a “tidying-up” exercise, but it found that the evidence did not support this – all the bills were for precisely the amount on client account and marked as paid the day after they were raised.

Everything pointed to the raising of the invoices as being a “paper exercise”, it found.

“Had this been a genuine ‘tidying-up exercise’, then an honest solicitor looking at his residual client balances and determining what could be billed would take steps to assure himself that the monies were due and would also have ensured that the bills were sent to the clients.”

The invoices were all reversed during the SRA’s investigation, but Mr Burke argued that this was about returning to a “state of compliance” rather than an admission of dishonesty,

Mr Burke admitted the other three charges against him, primarily improperly withdrawing a total of £47,205 from client account mainly as a result of transfers being made by the firm in excess of funds held by the client, although the withdrawals were all eventually rectified.

He also admitted failing to carry out reconciliations and operating two suspense ledgers in breach of the accounts rules.

On sanction, the tribunal said the mitigating factors were that once the SRA investigation had started, the “loss to the clients was made good”, and the misconduct was a “single episode in a previously unblemished career”.

However, an allegation of dishonesty had been proved against Mr Burke and there were no exceptional circumstances. It ordered that he should be struck off and pay £21,000 in costs.

Lawyers face prosecution over financial sanctions compliance

Passmore: Risks exist for every single solicitor and law firm

Lawyers are among those who could face prosecution if they fail to report information that could undermine UK financial sanctions, after a change to the law [1] that came into force this week.

“Independent legal professionals”, along with trust or company service providers, accountants and others are now captured by the European Union Financial Sanctions Regulations 2017.

The existing regulations already placed an obligation on businesses to report to the Treasury if they were acting for anyone subject to financial sanctions, but until Tuesday enforcement action could only be taken against financial services firms.

Those caught by the new regulations will commit an offence if they fail to inform HM Treasury if they know or have reasonable cause to suspect that a person has committed an offence under the relevant regulations – such as dealing with funds that must be frozen or activities that circumvent an asset freeze – or is a person who is the subject of an asset freeze.

There are sanctions placed on people and entities from 25 countries around the world – from Afghanistan to Zimbabwe – plus ISIS and al-Qaeda.

Crispin Passmore, the SRA executive director for policy, said: “The new financial sanctions regulations mean legal firms are obliged to comply with the reporting regime. These regulations, and the approaching Financial Action Task Force inspection, are further reminders of the importance the UK and global community places on tackling terrorist financing.

“Risks exist for every single solicitor and law firm whether conveyancing on the high street or handling global transactions, and each should be thinking about their responsibilities for tackling these issues.”

Guidance [2] from the Office of Financial Sanctions Implementation (OFSI) said lawyers are not required to provide information that is subject to legal professional privilege.

But it continued: “OFSI expects legal professionals to approach their disclosure obligations with rigour and carefully consider where legal professional privilege applies, and to what information.

“OFSI will challenge any blanket claims of privilege where we are not satisfied that such careful consideration has been made.”

Online consent tick boxes to be banned

Online consent scam outlawed in fight over personal data
Automatically ticked consent boxes that allow companies to harvest and exploit valuable personal information are to be banned in an overhaul of consumer protection laws for internet users.

DNA profiles and browsing histories are also to be included in a new definition of personal data, with companies facing criminal prosecution if they fail to protect users’ identities, report Francis Elliott and Mark Bridge.

Ministers will today spell out the details of a Data Protection Bill to be introduced in the Commons next month. It will include the right of adults to request the deletion of social media content they posted as children.

While that measure was expected, ministers will say that they intend also to expand the definition of personal data to include IP addresses and cookies. Matthew Hancock, digital policy minister, said that the bill would contain the most robust, yet dynamic, data laws in the world. “It will give people more control over their data, require more consent for its use and prepare Britain for Brexit,” he added.

Experts said that it could have far-reaching effects on companies that trade in anonymised data harvested online. Some offer cheap genetic tests for genealogy and then sell the information to medical researchers.

CML is now UK Finance

From 1st July the Council of Mortgage Lenders is integrated into a new trade association, UK Finance. For the time being, all UKF mortgage information will continue to be published on their website, and UKF member-only mortgage information will only be available on UK Finance site.

UK Finance represents around 300 firms in the UK providing credit, banking, markets and payment-related services. The new organisation takes on most of the activities previously carried out by the Asset Based Finance Association, the British Bankers’ Association, the Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association. Please go to for wider content and updates from UK Finance.

Diversity data collection SRA

You will be able to report your firm’s diversity data to us from the week beginning Monday, 17 July, and will have four weeks to complete this.

You can start collecting this data from your staff ahead of time using the new diversity questionnaire available on our website. In line with our latest advice about transgender inclusion, we have included a new question about transgender and an option for people who do not identify as male or female.

If you have already collected your data using the old questions, you will still be able to use this for reporting. We are working on our website to make it easier to report. You can report your data from the week beginning 17 July. Meanwhile, you can view data you provided previously up until 14 July. To do so, you will need your mySRA account username and password. If you have forgotten your username or password, please visit our website to see how you can request them.

We have emailed firms to let them know about this. Find out more about firm diversity data requirements.

AML regulations – update SRA

AML regulations – update

We are working through the new Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations, which came into force on 26 June this year.

The regulations place new requirements on firms and on us as a “supervisor” – those who regulate or oversee the work of professionals – to tighten up controls to prevent money laundering and terrorist financing. A particular focus of the new regulations is transparency; both in terms of firms being aware of who they are dealing with, and also supervisors being aware of and approving those who work within relevant firms.

We will soon publish an assessment of the regulations which will set out our views on the international and domestic risks of money laundering for firms we regulate. We are also required to collect data on our firms that are offering services set out within the regulations.

We will have to approve beneficial owners, officers, managers and sole practitioners of those firms. Our intention is to write to firms to ask whether they are performing any of the activities caught by the money laundering regulations.

We expect to do this over the winter, but in the meantime we are not asking firms to apply to us for approval under the Money Laundering Regulations. We also expect that you should all be familiar with your obligations to prevent money laundering, and the new requirements under the 2017 Money Laundering Regulations.