Tribunal strikes off Malcolm Hannaford after £357,000 shortfall and serious accounting breaches
The Solicitors Disciplinary Tribunal (SDT) has struck off Salisbury solicitor Malcolm Ronald Hannaford after finding a substantial shortfall in his firm’s client account and repeated breaches of accounting rules.
Hannaford, born in 1958 and admitted in 1984, practised as a sole practitioner under the name Hannafords from his home address in Wiltshire. The Solicitors Regulation Authority (SRA) intervened into his practice in November 2012 following a forensic investigation which revealed widespread failures to maintain proper accounts and evidence of client money being misused.
Investigators found that by 30 September 2012 Hannaford’s client account was almost empty, holding just £27.89, despite liabilities to clients exceeding £166,000. Overall, the tribunal heard that there was a deficit of around £357,000 when the practice was shut down. Payments from the SRA Compensation Fund to affected clients eventually totalled over £500,000.
Embed from Getty ImagesAmong the examples considered were the use of one client’s house sale proceeds to discharge another client’s mortgage, delays in paying beneficiaries in estate matters, and failure to register a property purchase because stamp duty had not been paid. The tribunal found that Hannaford repeatedly engaged in “teeming and lading” – using incoming funds from one client to plug gaps left by unpaid obligations to others.
The misconduct also extended to round sum transfers from client to office account, often when his office account was nearing its overdraft limit. Investigators identified more than £170,000 in such withdrawals between 2011 and 2012, many of which were not backed by invoices and were instead used for personal and business expenses, including payments to HMRC and luxury purchases.
The tribunal heard that Hannaford admitted to investigators that he had not kept proper accounting records for at least two years, in clear breach of the Solicitors Accounts Rules. Although he disputed dishonesty, the SDT concluded that the evidence showed serious and systemic misuse of client funds.
In his limited engagement with proceedings, Hannaford denied dishonesty and argued that all clients had eventually been paid. However, he accepted that accounts had not been maintained and admitted to technical breaches. He also sought to blame disputes with his accountants for delays in filing mandatory reports.
The SDT rejected these explanations. It found multiple breaches of the Solicitors Accounts Rules 1998 and the SRA Accounts Rules 2011, as well as Principles 2, 4, 5, 6 and 10 of the SRA Code of Conduct. The tribunal ruled that Hannaford had failed to act with integrity, failed to protect client money, and undermined public trust in the profession.
In its judgment, the panel concluded that Hannaford had been fully culpable for the shortfalls and had deliberately used client funds inappropriately. The scale of the misconduct and the losses to the Compensation Fund made striking off inevitable.
The tribunal ordered that Hannaford be struck off the roll of solicitors. It also ordered him to pay costs of the proceedings, though the exact amount was not stated at the hearing.
The ruling brings an end to Hannaford’s 28-year career. The SDT emphasised that protection of the public and the reputation of the profession demanded the ultimate sanction in cases involving dishonesty and substantial misuse of client funds