Bultitude v The Law Society

A solicitor who dishonestly deals with client funds will ordinarily be struck off the Roll. The sanction is all but automatic, notwithstanding mitigation, unless genuinely exceptional circumstances justify departure.

Dishonesty does not require an intention permanently to deprive clients of money. It is sufficient that conduct is dishonest by ordinary honest standards and that the solicitor appreciates that it is dishonest by those standards. A solicitor who authorises a transfer of client money without knowing or caring whether the firm is entitled to it may satisfy both elements.

The Solicitors' Disciplinary Tribunal found that David Bultitude had acted dishonestly when client-account credit balances were transferred to his firm's office account through false debit notes and ledger entries. It struck him off the Roll of Solicitors.

On appeal, the Divisional Court retained the finding of dishonesty but allowed the appeal to a limited extent. It deleted words from the Tribunal's findings and substituted a two-year suspension. The Law Society appealed against that reduction in penalty. Mr Bultitude cross-appealed against the dishonesty finding.

The central issues were whether dishonesty had been established and whether the circumstances could justify a sanction short of striking off.

1. Appeal allowed; cross-appeal dismissed. Kennedy LJ, with whom Laws and Arden LJJ agreed, restored the Tribunal's order that Mr Bultitude be struck off.

2. The correct test for dishonesty was that stated in Twinsectra Ltd v Yardley (2002) 2 164: conduct must be dishonest by the ordinary standards of reasonable and honest people, and the solicitor must appreciate that it is dishonest by those standards. An intention permanently to deprive clients of money was unnecessary.

3. Mr Bultitude signed a cheque transferring about £50,000 from client account to office account without supporting documentation and without knowing or caring whether the firm was entitled to the money. He later endorsed the position created by bogus debit notes and false ledger entries without rectifying it. The funds were not properly safeguarded, and the audit trail was compromised by the false documents. Those facts satisfied both limbs of the dishonesty test.

4. Dishonesty concerning client money normally requires striking off. The court followed the approach in Bolton v The Law Society (1994) 1 WLR 512 and Weston v Law Society Times, 15 July 1998. The exceptional features relied on, including the unusual circumstances and the absence of an intention permanently to deprive, could not justify a lesser penalty. To do so would improperly lower the disciplinary tariff and damage public confidence in the profession.

5. Although the appellate approach to Tribunal decisions had changed, as recognised in Langford v Law Society (2002) EWCA 2802 Admin, the court could and should give effect to the profession's normal necessary sanction for serious dishonesty. The Law Society's appeal was allowed with costs, the cross-appeal was dismissed, and permission to appeal to the House of Lords was refused.

• Court of Appeal (Civil Division): Allowed the Law Society's appeal, dismissed Mr Bultitude's cross-appeal, and restored the order striking him off the Roll of Solicitors.
• High Court, Queen's Bench Division, Divisional Court: On 19 May 2004, allowed Mr Bultitude's appeal to a limited extent, retained the dishonesty finding, and substituted a two-year suspension for striking off.
• Solicitors' Disciplinary Tribunal: On 7 November 2003, found Mr Bultitude guilty of dishonesty and ordered that he be struck off the Roll of Solicitors.