Kathleen Chadwick & 2 Others

Findings — machine-extracted (anthropic-batch:claude-opus-4-8); verify against the decision

Before the SDT, the First Respondent (sole practitioner/senior partner of JS and Company), the Second Respondent (junior partner from March 2009) and the Third Respondent (unadmitted bookkeeper) faced allegations arising from conveyancing transactions and accounting irregularities. A £100,000 client account shortfall arose from an overpayment of £120,000 to a non-client, which was then concealed through 'teeming and lading' inter-ledger transfers involving unrelated clients. The First Respondent also repeatedly failed to disclose material facts to lender clients (family relationships, gift elements, that he acted for all parties, lack of control of purchase monies), acted in conflict, took instructions from non-clients and provided banking facilities. All allegations were found proved. The Tribunal expressly noted dishonesty was NOT alleged, but found the First Respondent's conduct at the most serious end of the spectrum showing a lack of integrity, and struck him off with costs of £22,000. The Second Respondent, less culpable but liable as a principal for SAR breaches, was fined £5,000 with £6,000 costs. The Third Respondent was made subject to a s43 order (no costs ordered against her). Total costs assessed at £28,000.

Duties found breached:

• Not mislead third parties or opponents
• Disclose material information to client
• Proper termination and return of instructions
• No conflict between current clients
• No improper use of client money
• Prompt accounting and return of money
• Accounting records, reconciliation and reports
• Safeguard documents and limit liens
• Not misrepresent regulated status

Aggravating factors:

• Misconduct deliberate, calculated and repeated over a period from 2008 to 2011
• 'Teeming and lading' exercise concealing a £100,000 client account shortfall using funds of unrelated clients (over £82,000 of Ms BH's money)
• Continued failures to inform lender clients even after SRA investigation had drawn duties to his attention
• First Respondent an experienced conveyancer and senior partner who instigated the breaches
• Sought to blame junior bookkeeper for breaches that were his responsibility
• Provided banking facilities to clients through client account
• Great risk of significant loss to lay and lender clients
• Lack of genuine insight into conduct

Mitigating factors:

• No actual loss ultimately suffered by clients; shortfall made good
• Previous good character with no prior disciplinary findings
• Co-operation with the SRA and commissioning of the Beevers & Struthers accountants' report
• Firm obtained Lexcel accreditation and applied for Conveyancing Quality Mark
• Admissions of the allegations
• Dishonesty was not alleged or found