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Norfolk firm fined over £120,000 for eight-year mismanagement of estate funds

A Norfolk law firm, Hansells, has been fined nearly £121,000 for distributing incorrect sums to estate beneficiaries and failing to rectify the issue for eight years, as reported by The Law Society Gazette.

The Solicitors Regulation Authority (SRA) deemed this financial penalty as fitting and proportionate given the gravity of the misconduct.

Hansells, an alternative business structure, is not restricted by the SRA’s £25,000 fine limit applicable to traditional firms. The firm’s predecessor, Hansells Solicitors, was tasked with administering an estate in 2001 but misinterpreted intestacy rules, leading to improper fund distribution. This resulted in wrongful withdrawals from the client account.

By the time the firm became a licensed body in 2014, there was a £22,000 shortfall in the client account, which was not rectified until 2022 following an accountant’s report. The SRA criticized the firm for failing to replace the client money for eight years, breaching various account rules.

The regulator justified the fine, equivalent to 3.2% of Hansells’ gross annual turnover, as a necessary deterrent to the firm and others, noting that a lesser sanction would not have sufficed. The firm’s conduct eroded public trust and confidence in the legal profession, particularly as the issue persisted even after it was recognised as improper.

While the firm eventually addressed the shortfall, the SRA highlighted that the rectification took longer than reasonable and was only completed under prompting. The SRA emphasised the sanctity of the client account, noting that some beneficiaries, including elderly individuals, were deprived of their rightful entitlements for years, with some passing away before receiving their dues.

Despite finding no evidence of dishonesty or lack of integrity, the SRA acknowledged that Hansells admitted to the oversight and ultimately reimbursed the missing funds from its office account. Based in Norwich, Hansells was fined £120,885 and ordered to pay £1,350 in costs.

Roger Holden, a solicitor and manager at Hansells, received a £3,223 fine and was directed to pay £1,350 in costs for managing the estate from 2014 to 2022 amid a conflict of interest.

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