Solicitor struck off for “deliberately and excessively” overcharging clients

Solicitor Keith Smart has been struck off the roll by the Solicitors Disciplinary Tribunal (‘SDT’) after a finding that he had ‘deliberately and excessively’ overcharged his clients and failed to follow the regulator's accounting procedures.

The Solicitors Regulatory Authority (‘SRA’) had cause to investigate Mr Smart (who was working as a sole practitioner and COLP and COFA for his firm Keith Smart & Co) in June 2018 on the grounds of suspected dishonesty.  The SRA were caused to suspect dishonesty as a result of unexplained, unexpected and unusual entries referred to in a Qualified Accountant's Report.  The firm was intervened into by the SRA and Mr Smart’s practicing certificate was suspended.

The allegations, supported by a forensic report, put before the SDT were that Mr Smart overcharged several of his clients (in excess of £70,000), that "rounded" transfers were made from the firm’s client account (in excess of £128,000), that there had been debit balances on the client account and that he had failed to have properly written-up books of accounts.

The SRA alleged that in carrying out his professional endeavours in this manner, Mr Smart had failed to protect client money and assets and had failed to run his business in accordance with proper governance and sound financial risk management (a breach of SRA Principles 8 and 10 and various SRA Accounts Rules).  He also failed to act with integrity, in his clients' best interests and in a way that maintained public trust and confidence in the profession (a breach of Principles 2, 4 and 6).  It was further alleged that during the SRA’s investigation he failed to deal with his regulator in an open, timely and co-operative manner (a breach of Principle 7).

Mr Smart admitted to all 11 of the SRA’s allegations (the 12th being withdrawn), including eight counts of dishonesty.  It was additionally noted that he had misled the forensic investigator when pressed for details.  He put forward in mitigation that his firm had lost its experienced cashier and, as a result, there had been a ‘catastrophic failure’ in the accounting systems.  This had a knock-on effect leading to a delay in rectification of client account shortfalls and reconciliations. Mr Smart went on to state that he had since replaced the shortages found in probate estates, that he had been out of work since and that he apologised profoundly for his actions.

The parties submitted an agreed outcome to the SDT.  The Tribunal accepted this outcome and noted that Mr Smart’s conduct was very serious in nature.  They stated that, given the gravity of the offences, ‘the only appropriate and proportionate sanction was to strike the respondent from the roll’.  Mr Smart was additionally ordered to pay costs of £20,151.64.

The SDT’s full judgment can be found here.

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