Standley & Co
1612 High Street, Knowle, Solihull, West Midlands
, B93 0JU
Decision - Agreement
Outcome: Regulatory settlement agreement
Outcome date: 2 March 2020
Published date: 4 March 2020
Firm or organisation at date of publication
Name: Standley & Co
Address(es): 1612 High Street, Knowle, Solihull, West Midlands B93 0JU
Firm ID: 055725
This outcome was reached by SRA decision.
REGULATORY SETTLEMENT AGREEMENT
- Standley & Co of 1612 High Street, Knowle, Solihull (“the Firm”) and Stephen Gooden, a Partner, COLP and a manager of the Firm agree to the following outcome of the investigation into Mr Gooden and the Firm’s professional conduct (under SRA reference TRI/ 1265112-2019).
- From the mid-late 1990s until February 2016, the Firm acted for Client A in respect of various corporate and commercial matters. Client A was, and remains, a company which provides equipment and services. Client A was owned by two companies and Mr A. Mr A was the managing director of Client A.
- On occasions during the relevant period, the Firm also acted for Mr A in a personal capacity. Mr Gooden was the main fee earner for Mr A’s matters.
- The SRA received a complaint concerning the conduct of the Firm in representing Mr A on a personal basis and, specifically, how the Firm wrongly accepted money from Client A in connection with Mr A’s personal matters. At the time of making these complaints, Client A was in a legal dispute with Mr A.
- By way of further detail, in February 2014 Mr A sold his shares in Client A to the other shareholders, subject to an option agreement which would allow him to buy back the shares for £50,000. The option was exercised in February 2016 and this transaction (the share buyback) was completed in March 2016.
- The Firm’s client ledger for Mr A in respect of the Share Option Matter shows that £50,600 was received into the client account, from Client A, on 10 March 2016 with a note stating “Funds to complete share buyback”. The same amount was then paid out to the solicitors acting for the sellers under the option on the same day with a note stating “To complete buy back”. These funds comprised £50,000 purchase price and £600 legal fees (£100 was subsequently refunded).
- The complainant alleged the sum of £50,000 was paid into Client A’s bank account by or on behalf of Mr A on 14 March 2016 (i.e. four days after the transfer from Client A to the Firm). This payment came in two instalments: (i) a cheque for £35,000 from Mr A’s separate company, Company C; and (ii) a second cheque for £15,000. Mr A made no payment to Client A corresponding to the additional £600 in respect of the Company B’s costs.
- It transpired that the monies were transferred to the Firm from Client A without proper authorisation – i.e. Client A had not consented to the payments and Mr A did not have authority to make them, notwithstanding that, according to Mr Gooden, he had specifically spoken to the accountant to both Client A and Mr A who had confirmed that the monies were coming from and being paid by Mr A to Client A. The concern is that the Firm accepted money from Client A in respect of Mr A’s personal matter.
- Furthermore, a total of 10 further credits had come directly from Client A to the firm’s client and office bank account and then posted to Mr A’s matters. These payments totalled £16,535.52.
- Mr Gooden and the Firm make, and the SRA accepts, the following admissions:
Mr Gooden and the Firm accepted money from a third party Client A on Mr A’s personal matters without undertaking any or any adequate checks that Mr A was authorised to use that money. This was a breach of:
- Principle 4 (to act in the best interests of each client);
- Principle 6 (to behave in a way that maintains the trust the public places in you and in the provision of legal services).
- The Firm and Mr Gooden advance the following by way of mitigation for the breaches admitted above. These are not adopted or necessarily accepted by the SRA.
- Mr Gooden states that he made an innocent, if mistaken, assumption (based on the close identity of Mr A with Client A and the many years of receiving instructions from him on behalf of Client A and, in March 2016, on the basis of what he was told by Mr A and Client A’s accountant) that the payments from Client A were authorised.
- The Firm undertook immediate remediation by voluntarily returning in excess of £16,000 (plus interest) to Client A. It has also introduced a new policy prohibiting receipt of funds from third parties and retained the services of a specialist, independent compliance solicitor.
- Mr Gooden and the Firm have each made the above admissions and have accepted the breaches of the SRA Principles.
- Mr Gooden is fined £2,000 for the breaches identified in paragraph 10 above.
- The Firm is fined £2,000 for the breaches identified in paragraph 10 above.
- Mr Gooden and the Firm agree that this outcome will be published by the SRA and that it may also be disclosed to any person upon request or otherwise.
- Mr Gooden and the Firm agree to pay jointly and severally the costs of the investigation, including the SRA’s costs in the sum of £12.633.25 (exclusive of VAT) within 28 days of a statement of costs due being issued by the SRA.
- Mr Gooden and the Firm agree that they will not act in any way inconsistent with this agreement by, for example, by denying the admissions made in this agreement. Mr Gooden and the Firm agree that if they act in any way inconsistent with this Agreement they accept that the issues may be referred back to the SRA for consideration or referral of their conduct to the Solicitors Disciplinary Tribunal on the original facts and allegations and also on the basis that such failure to comply with this agreement by constitute a breach of Principles 2 and 6 of the SRA Principles 2011.
- Be entering into this Agreement, the SRA confirms that the decision to refer Mr Gooden and the Firm's conduct to the Solicitors Disciplinary Tribunal dated 25 March 2019 is overturned.