Tribunal says he used a client account as a banking facility; imposes £2.5k fine plus costs.
The Solicitors Disciplinary Tribunal has fined John Ioannou £2,500 and ordered him to pay £2,655 in costs after finding he used his firm’s client account as a banking facility, contrary to the SRA Accounts Rules. He admitted the allegation in full.
The misconduct spanned November 2015 to July 2016. During that period, Ioannou received and made payments totalling £195,000 on behalf of a client when there was no underlying legal transaction to justify the movement of funds. The Tribunal held that this conduct breached Principles 6 and 8 of the SRA Principles 2011 and Rule 14.5 of the SRA Accounts Rules 2011.
At the time, Ioannou was the sole partner of Devereaux Solicitors, a role he held from October 2005 until the firm’s closure in June 2019. From 2012 to closure, he also served as COLP, COFA and AML officer. Admitted to the Roll in 1987, he held a current practising certificate without conditions when the case came before the Tribunal.
The background centres on work involving the C family and its companies. Following a Restraint Order served in August 2015, the firm successfully applied for an order compelling Barclays to operate accounts associated with those companies. Under a Tomlin Order, £6,355,321.51 moved from Barclays to the firm’s client account in September 2015. Some weeks later, the solicitor handling the matters left the firm, and a large sum was transferred to the new firm. The C family then resumed instructing Devereaux, with Ioannou taking instructions from GC.
Embed from Getty ImagesThe Tribunal examined a sequence of payments that did not relate to legal work the firm was carrying out. On 26 November 2015, at GC’s direction, two payments totalling £70,000 went from the client account of Q Care to a third-party company, JBL. On 23 December 2015, £35,000 left GC’s client account for another third-party, SCS. In 2016, the firm received £90,000 from 365, a recruitment company, into GC’s client account; Ioannou used part of this money to settle firm bills. He later said he could not recall why the firm received those funds. There was no underlying legal transaction for these movements.
Rule 14.5 is unequivocal: solicitors must not provide banking facilities through a client account. The Applicant stressed the profession’s long-standing warnings on this point and the risks that arise when solicitors process funds unconnected to legal services. The Tribunal agreed, finding Ioannou fully culpable, while accepting his errors were inadvertent rather than planned or dishonest.
Ioannou admitted the allegation and apologised unreservedly. He told the Tribunal he had not sought personal gain, accepted that he should have probed the payments more rigorously, and pointed to an otherwise unblemished 35-year career. He had cooperated from an early stage, remained open with the Regulator, and stepped away from practice pending the outcome, which affected his finances.
Assessing culpability and harm, the Tribunal found there had been a breach of trust because the money was client money, which the public expects solicitors to protect strictly for its intended purpose. While the potential for harm and reputational damage was high, the actual harm was limited; no client money was lost. The Tribunal placed the misconduct at the lower end of seriousness, noting the limited number of offending transactions compared with numerous compliant ones.
A sanction more severe than a fine would have been disproportionate. Applying a bottom-up approach and the Guidance Note on Sanctions, the Tribunal fixed a £2,500 fine. On costs, it reduced elements of the Applicant’s claim, ultimately ordering Ioannou to pay £2,655.
In sum, the Tribunal concluded that Ioannou’s conduct fell short of the standards required but did not involve dishonesty or lack of integrity. The penalty serves as a clear reminder: a client account is not a bank, and solicitors must question every request to move funds that is not tied to a genuine legal transaction.