Tribunal approves agreed outcome after regulator identified failures in systems and controls over handling of client money
A London law firm and two of its partners have been fined after the Solicitors Disciplinary Tribunal (SDT) approved disciplinary findings relating to the retention of client account funds following a commercial property transaction.
The case concerned YVA Solicitors LLP and its partners Christopher Yiannakas and Nicholas George Kephalas, whose conduct was investigated by the Solicitors Regulation Authority (SRA).
The tribunal approved an agreed outcome between the regulator and the respondents shortly before the matter was due to be heard in February 2026. The case was therefore determined on the papers without a contested hearing.
The SDT found that proceeds from a commercial property sale remained in the firm’s client account after there was no longer a proper basis for retaining those funds in connection with the underlying transaction. The remaining allegations were admitted through a jointly submitted statement of agreed facts and outcome.
The tribunal also considered allegations concerning a payment of £355,000 connected with a refinancing matter. Those allegations, along with several others originally advanced by the regulator, were withdrawn following clarification between the parties before final determination.
Earlier allegations concerning seven payments made from retained funds were also withdrawn before the SDT reached its final determination. Correspondence between the parties resulted in the withdrawal of those allegations prior to the agreed outcome being approved.
Regulatory concerns first arose after the submission of a qualified accountant’s report covering the period from April 2021 to March 2022. That report identified issues concerning compliance with the SRA Accounts Rules 2019 in relation to the handling of client money connected with the commercial property transaction. The SRA subsequently carried out a forensic investigation in January 2023 and later produced a report addressing those issues.
The tribunal further found that the firm failed to ensure effective systems and controls were in place to manage risks associated with the handling of client funds and that prior to the investigation commencing, steps had subsequently been taken to strengthen internal procedures and controls.
We wish to emphasise that it was agreed that the underlying client’s instructions were followed at all time, no client suffered financial lossand interest earned on the monies for the entire period they were held in the firm’s client account were paid to the client
Following approval of the agreed outcome, the SDT ordered Mr Yiannakas to pay a fine of £500 and Mr Kephalas to pay a fine of £500. The tribunal also ordered YVA Solicitors LLP to pay a fine of £2,500.
In addition to those penalties, the tribunal ordered the firm to pay costs of £35,000 arising from the regulator’s investigation and proceedings.