CHARLES JAMES ETE v SOLICITORS REGULATION AUTHORITY LIMITED

An appeal from a specialist professional tribunal is ordinarily a review. The High Court should intervene only for a material error of law, fact or discretion, or serious procedural irregularity. Findings of fact and evaluative judgments attract particular restraint where the tribunal heard the evidence and possesses professional expertise.

Dishonesty is assessed by first establishing the person’s actual knowledge or belief and then applying the objective standards of ordinary decent people. A finding of dishonesty will ordinarily require striking off, unless exceptional circumstances make that sanction disproportionate. Stress, depression, lack of prior disciplinary findings and suspension will not, without more, constitute exceptional circumstances.

The appellant, a solicitor and principal of two firms, appealed against the Solicitors Disciplinary Tribunal’s decision dated 26 August 2021. The Tribunal had upheld eight allegations involving improper payments from a client account, transactions bearing the hallmarks of fraud, a substantial client-account shortage, use of the account as a banking facility, inadequate supervision and verification of an individual posing as a solicitor, misleading professional indemnity insurers, and failure to appoint compliance officers.

The Tribunal struck the appellant off the Roll and ordered him to pay £64,260 in costs. The appeal challenged the findings on each allegation, the sanction and the costs order. The central issues were whether the Tribunal had made any appealable error and whether striking off and the costs order were clearly inappropriate.

1. The appeal was dismissed. The High Court’s function under Solicitors Act 1974, section 49(1), and CPR rule 52.21 was supervisory by way of review. An appeal required a material error of law, fact or discretion, or serious procedural irregularity. The Tribunal’s detailed findings were not shown to be wrong, and its evaluative conclusions concerning professional standards were entitled to deference as the work of a specialist regulator.
2. The Tribunal was entitled to find that the payments to unrelated third parties were not permitted by rule 20.1 of the SRA Accounts Rules 2011. The written instructions were insufficient in the circumstances, and the payments were not properly required for the clients. The same facts supported findings of improper conduct, failure to protect client money, lack of integrity and use of the client account as a banking facility contrary to rule 14.5.
3. The findings concerning supervision and verification of the individual using Person A’s identity were open to the Tribunal. A principal handling conveyancing involving substantial client money required meaningful systems of control, supervision and verification. A perfunctory review of documents and reliance on an introduction, a Roll entry or an apparently current credential did not discharge those responsibilities.
4. The dishonesty finding concerning the insurance renewal form was also upheld. Applying Ivey, the Tribunal had established the appellant’s actual knowledge and belief and was entitled to find that ordinary decent people would regard the untruthful confirmation as dishonest. The insurer’s reaction was not decisive. The obligation concerned circumstances likely to give rise to claims, without the limitation asserted by the appellant.
5. The sanction was not clearly inappropriate. Dishonesty ordinarily warrants striking off. The multiple and systemic integrity failures, substantial client-account shortage, harm to clients and the profession, and lack of insight meant that the case did not fall within the exceptional category. Stress, depression, prior good record and suspension did not alter that conclusion.
6. The costs order was within the Tribunal’s discretion. A broad-brush assessment was permissible in the circumstances, particularly since a detailed line-by-line assessment had not been sought.

• Solicitors Disciplinary Tribunal: On 26 August 2021 upheld eight allegations, struck the appellant off the Roll and ordered payment of £64,260 in costs.
• High Court (Administrative Court): Appeal dismissed.