Solicitors Regulation Authority v Wingate & Anor

Integrity is a matter for the informed judgment of the tribunal or court on the facts. It should not be given an elaborate definition. Dishonesty and lack of integrity are distinct concepts. A solicitor who signs a substantial written contract which he knows does not record the true agreement, and then draws down money under it, may lack integrity and undermine public trust. A solicitor may also commit professional misconduct through manifest incompetence where he fails to recognise obvious indicators that a transaction is dubious. In a small firm, a partner responsible for other work may nevertheless have a high duty to make basic enquiries about substantial borrowing and its proposed use. An appellate court should respect a specialist tribunal’s assessment, but may intervene where its reasoning is plainly wrong or no rational tribunal could have reached its conclusion.

The Solicitors Regulation Authority appealed under section 49 of the Solicitors Act 1974 against the Solicitors Disciplinary Tribunal’s acquittal of two solicitor partners. The proceedings concerned the use of a substantial loan obtained by their firm from the Axiom Fund, including use inconsistent with the detailed written funding agreement, and wider financial-management practices.

The tribunal accepted that Mr Wingate was credible and honest, but found that the allegations of misconduct had not been proved. The SRA abandoned the dishonesty allegations on appeal but continued to challenge the findings concerning integrity, public trust, competence and financial governance. The central issues were whether the tribunal had applied the correct approach to those allegations and whether its conclusions were rationally open to it.

1. Appeal allowed in part. The dishonesty allegations were no longer pursued. The tribunal’s findings that Mr Wingate was not dishonest therefore stood.
2. The tribunal erred by treating the question as whether reliance on assurances from the fund’s representatives amounted to misconduct. It failed to ask whether it was misconduct for a solicitor to sign a solemn written contract which, on his own case, did not record the agreement, which he did not intend to perform, and with which he knew the firm could not comply.
3. That contract was, on Mr Wingate’s own account, a sham. Signing it and drawing down the money lacked integrity, contrary to Principle 2, and undermined public trust in the solicitor and the provision of legal services, contrary to Principle 6.
4. The tribunal also erred in relation to the dubious nature of the transaction. Its finding that there was good reason to regard the explanation for the inconsistent written agreement as weak required it to conclude that Mr Wingate should have become suspicious. His failure to recognise the transaction’s dubious nature amounted to manifest incompetence contrary to Principle 6. This was not a separate finding of lack of integrity.
5. Mr Evans was not shown to have lacked integrity. However, as a partner in a two-person firm, he had an obvious and high duty to take basic steps concerning substantial borrowing. His failure even to read the funding agreement amounted to manifest incompetence contrary to Principle 6.
6. The challenge concerning payment into client account failed. On the accepted case that the true agreement permitted use of the money for the firm’s general purposes, the money was not shown to be client money requiring payment into client account.
7. The appeal also succeeded concerning the firm’s practice of retaining cheques after recording them as paid. Findings were required against both respondents for failure to run the firm effectively and in accordance with proper governance and sound financial and risk-management principles, contrary to Principle 8. Any sanction had to avoid double punishment.
8. In all other respects the appeal was dismissed.

Solicitors Disciplinary Tribunal: The tribunal acquitted both respondents of the material misconduct allegations, while finding and fining them in relation to certain client-money matters.

High Court (Administrative Court): The appeal under section 49 of the Solicitors Act 1974 was allowed in relation to grounds one, two, four and six, and dismissed in all other respects.