Victoria Kinsella absent as tribunal hears claims of client cash risks and rule breaches

Tribunal proceeds without Kictoria kinsella amid grave client-money risks and deletion warnings

A Solicitors Disciplinary Tribunal sitting from 24 to 27 February 2020 pressed ahead with a high-stakes hearing into alleged systemic failings at High Street Solicitors Limited, despite the non-attendance of its then Head of Finance and Compliance Officer for Finance and Administration (COFA), Victoria Kinsella. The panel, chaired by Mr B. Forde with Mr W. Ellerton and Mr S. Howe, ruled it was just to proceed after confirming service and noting her complete lack of engagement with the process.

The case, brought by the Solicitors Regulation Authority (SRA), centred on two broad fronts. First, the SRA alleged that, between October 2016 and June 2017, significant sums linked to professional disbursements and after-the-event (ATE) insurance premiums—including client money—were improperly held in the firm’s office account rather than in a client account. Second, it alleged that clients pursuing holiday sickness claims were told to delete social media posts and photos from their trips.

The tribunal heard detailed evidence from the SRA’s Forensic Investigation Officer (FIO), Sarah Bartlett. Office account reconciliations showed large numbers of unreconciled items—unpresented cheques and unprocessed electronic transfers—that ballooned over time. In October 2016, unpaid professional disbursements stood at £33,662.26 and ATE premiums at £36,370.62 (total £70,032.88). By April 2017, those figures had surged to £101,053.35 and £88,730.81 respectively (total £189,784.16), all more than six months old. Aged creditors moved off the reconciliations in April 2016 added further opacity, with more than £90,000 recorded separately.

The firm’s overdraft limit was £400,000, and the SRA argued that, but for the unreconciled items, the office account would have exceeded that limit by hundreds of thousands during several months. In the SRA’s words, these items effectively propped up the firm’s financial position. The tribunal later accepted that while no client loss was proved, client funds held in the office account were at risk and not afforded the protections of a designated client account.

Against this, the respondents said they reasonably relied on a COFA (at first Ms Kinsella, then a successor), external accountants, and compliance auditors. They stressed that accountants had issued a “clean” report for an earlier period, and that the business could have accessed funds to honour cheques if presented together. The tribunal rejected the notion that delegation absolved responsibility: directors were still duty-bound to scrutinise reconciliation outputs and ensure compliance.

On the principles, the tribunal found that the first and second respondents breached Principle 6 (maintaining public trust) and Principle 10 (protecting client money), and failed to achieve Outcome 7.3 (identify, monitor and manage compliance risks). It emphasised that ignorance of the shortfall was not a defence where basic enquiries would have exposed the problem; the persistent cashbook balance and aged unpresented items should have triggered urgent questions.

The second front of the case concerned the troubling social media directive in holiday sickness files. Standard letters sent to clients stated, in stark terms: change privacy settings, unfriend holiday businesses, and “delete any comments or photos from your holiday ASAP.” The SRA said this was highly improper, risking the destruction of relevant evidence and undermining the administration of justice. Training materials relied on by the firm urged caution around social media but did not advocate deletions. The tribunal noted the SRA’s later Warning Notice (6 September 2017) condemning such advice, although the alleged conduct pre-dated that notice. Responsibility for authoring or approving the deletion wording remained contested in the evidence before the panel.

As for Victoria Kinsella, the SRA alleged that, while COFA between October 2016 and 23 February 2017, she failed to take reasonable steps to secure compliance with the Solicitors Accounts Rules and failed, as soon as reasonably practicable, to report a material breach to the regulator. She neither attended the hearing nor instructed representation. After weighing service, prior correspondence, and the public interest in timely resolution, the tribunal exercised its discretion to continue in her absence.

The panel’s findings to this point were stark: prolonged mismanagement of funds earmarked for disbursements and ATE premiums, client money held on office account, and a system that—at least for a period—told claimants to erase social media traces. With Ms Kinsella absent, the tribunal drew a tight circle around accountability and signalled that responsibility for safeguarding client funds cannot be outsourced or ignored.