A law firm owner has been fined for mistakenly allowing £10,000 client funds to be paid to the office account.
According to a regulatory settlement agreement, the Solicitors Regulation Authority accepted that the client account shortage arose from a misunderstanding when Prithiviraj Pem, owner of Cheltenham firm Pembridge Solicitors, gave the office administrator a verbal instruction. Pem had wanted his colleague to arrange for the money to be paid to the client for care costs, but the administrator mistakenly took his instruction to mean payment for the firm’s costs.
Pem admitted causing or allowing the client account shortage and failing to make reconciliations for around six months. In his role as compliance officer, he failed to ensure the firm’s books were compliant with SRA accounts rules by failing to record receipts and payments on the business side of client ledgers.
The SRA accepted that Pem had improved his knowledge of accounts rules and replaced the client shortage. He had no adverse regulatory history.
But the regulator also noted that he should have shown better judgement, foresight and insight into his role as compliance officer. ‘Mr Pem demonstrated a reckless disregard of the risk of harm and lack of insight into his regulatory obligations as COFA of the firm,’ added the SRA. ‘Financial harm was temporarily caused to a client, who was a child, and therefore vulnerable, as £10,000 had been incorrectly transferred to the firm’s business account as opposed to the client towards their care costs.’
The regulator deemed that Pem should be fined 32% of his annual gross income, which based on the evidence of the last year resulted in a financial penalty of £5,635. He also agreed to pay £1,350 costs.
