Charles Darby
Solicitor
134312

Decision - Agreement

Outcome: Regulatory settlement agreement

Outcome date: 6 July 2020

Published date: 18 July 2020

Firm details

Firm or organisation at date of publication and at time of matters giving rise to outcome

Name: Freeths LLP

Address(es): 1 Colton Square, LEICESTER, LE1 1QH, England

Firm ID: 384861

Outcome details

This outcome was reached by agreement.

Decision details

1. Agreed outcome

1.1 Charles Jerome Darby a solicitor and manager of Freeths LLP (“the Firm”) which is a licensed body, agrees to the following outcome to the investigation of his conduct by the Solicitors Regulation Authority (SRA):

1. he is fined £4,000
2. to the publication of this agreement
3. he will pay the costs of the investigation of £600.

Reasons/basis

2. Summary of Facts

Report A

2.1 On 31 July 2019, Mr Darby was contacted by a client concerning a debt which it was owed. The client informed Mr Darby that the debtor’s solicitor would only pay the debt if the money was paid into the Firm’s client account, rather than direct to the client.

2.2 Mr Darby informed the client that the Firm could only accept the money if it had been instructed in relation to the underlying transaction from which the debt arose. Mr Darby proceeded to obtain details of that transaction from the client.

2.3 On 1 August 2019, the debtor’s solicitor paid £123,558 into the Firm’s client account. Mr Darby then arranged for the money to be forwarded to the client, even though the firm had not been instructed in relation to any underlying transaction.

2.4 The matter came to the Firm’s attention. It carried out an internal investigation and found that Mr Darby had breached the SRA Accounts Rules 2011. It required Mr Darby to complete additional training on the Accounts Rules but decided that it was not necessary to take disciplinary action against him.

Report B

2.5 On 19 July 2019, during an informal gathering of staff at the end of the day, Mr Darby in the context of a comment by a colleague, that it was acceptable now in certain circumstances to refer to travellers as gypsies, asked whether it was acceptable to refer to a homosexual trainee solicitor as a ‘poofter’. The trainee solicitor who was in earshot asked Mr Darby what he has said and Mr Darby repeated the comment.

2.6 The colleague made a complaint about Mr Darby and the Firm carried out a disciplinary investigation.

2.7 The Firm found that Mr Darby had used offensive language and he was sanctioned for his behaviour. Mr Darby received a reprimand and a warning as to his conduct over the next 24 months.

2.8 Mr Darby offered to apologise to the colleague for his comments, which was noted by the firm when making its decision.

2.9 On 11 September 2019 Mr Darby reported both matters to the SRA.

3. Admissions

3.1 Mr Darby makes the following admissions which the SRA accepts:

1. by allowing £123,558 to be paid into the Firm’s client account when the Firm was not instructed on any underlying transaction, he breached Rule 14.5 of the SRA Accounts Rules 2011
2. by addressing a colleague using offensive and derogatory language, he breached Principles 6 and 9 of the SRA Principles 2011.

4. Why a fine is an appropriate outcome

4.1 The SRA’s Enforcement Strategy sets out its approach to the use of its enforcement powers where there has been a failure to meet its standards or requirements.

4.2 When considering the appropriate sanctions and controls in this matter, the SRA has taken into account the admissions made by Mr Darby and the following mitigation which he has put forward:

1. Mr Darby has co-operated with the Firm’s and the SRA’s investigations
2. Mr Darby offered to apologise to the colleague
3. Mr Darby has undertaken training on the Accounts Rules.

4.3 The SRA considers that a fine is the appropriate outcome because:

1. a fine will deter Mr Darby and others in the wider profession from similar behaviour in the future
2. Mr Darby had direct responsibility for his conduct. He is a manager of the Firm and as such is expected to have a greater understanding of the need to respect and encourage diversity and of the SRA’s rules about handing client money
3. the SRA has published guidance to the profession about the use of client account as a banking facility and Mr Darby ought to have been aware of it.

4.4 A fine is appropriate to maintain professional standards and uphold public confidence in the solicitors' profession and in legal services provided by authorised persons because it recognises the seriousness of Mr Darby’s conduct. A financial penalty therefore meets the requirements of rule 4.1 of the Regulatory and Disciplinary Procedure Rules.

Other information

6. Publication

6.1 The SRA considers it appropriate that this agreement is published in the interests of transparency in the regulatory and disciplinary process. Mr Darby agrees to the publication of this agreement.

7. Acting in a way which is inconsistent with this agreement

7.1 Mr Darby agrees that he will not deny the admissions made in this agreement or act in any way which is inconsistent with it.