S P Kenny & E Coates

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

CK Solicitors was intervened into by the SRA in May 2011 after investigation revealed a substantial cash shortage on client account (over £500,000 withdrawn via a suspense ledger 2-009 in 18 months). Sole principal Simon Paul Kenny (also a Deputy District Judge) had all allegations proved, including two dishonesty allegations: improper withdrawals from client account and giving his reporting accountant (Mr RF, who later committed suicide) false information that client money had been transferred to Thailand for safety when in fact a shortfall existed, and misrepresenting the source of a £300,000 loan from Mr George White. The Tribunal applied the Twinsectra test and found him dishonest; he was struck off. The Third Respondent, Emma Coates (a FILEX held out as a partner and a bank account signatory), admitted several rule breaches but denied dishonesty; the Tribunal found dishonesty proved only on allegation 2.2.3 (the improper withdrawal of £4,825 on the Mr K matter via a 'dummy bill'), rejecting dishonesty on the other allegations and finding some allegations not proved. As she was not a solicitor, she was made subject to a section 43 order. Costs of £56,853.79 (Kenny, not enforceable without leave) and £44,152.08 (Coates, immediate) were ordered. The Third Respondent's later High Court appeal was struck out.

Duties found breached:

• No conflict between current clients
• Segregate client money
• No improper use of client money
• Prompt accounting and return of money
• No baseless or threatened misconduct report

Aggravating factors:

• Large deficit on client account (over £500,000 withdrawn through ledger 2-009 in under 18 months)
• Deliberate concealment of deficit from reporting accountant and regulator by transferring monies between client ledgers
• First Respondent was also a Deputy District Judge responsible for administering justice
• Serious risk to the public and damage to reputation of the profession

Mitigating factors:

• Third Respondent was not a solicitor and was found largely a victim of the First Respondent
• Third Respondent suffered substantial financial losses (around £600,000)
• First Respondent had no prior disciplinary findings and had cooperated to an extent; was impecunious (on Job Seekers Allowance)