QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL
B e f o r e :
| Richard Anthony Barnett
|- and -
|Solicitors Regulation Authority
Timothy Dutton CBE, QC and Tetyana Nesterchuk
(instructed by Russell Cooke LLP) for the Solicitors Regulation Authority
Hearing dates: 28th April 2016
Crown Copyright ©
Mr Justice Garnham:
The Preliminary Issues
The Proper Approach to Appeals Under s49
"49(1) An appeal from the Tribunal shall lie to the High Court.
(2) … an appeal shall lie at the instance of the applicant or complainant or of the person with respect to whom the application or complaint was made…
(4) The High Court… shall have power to make such order on an appeal under this section as it may think fit…"
i) The appeal proceeds by way of a review rather than a rehearing.
ii) The court will give appropriate weight to the fact that the Tribunal is a specialist tribunal which had the advantage of hearing the evidence first hand. It will therefore be slow to intervene with the Tribunal's findings unless they were "plainly wrong".
iii) The court may also interfere with the Tribunal's decision if it finds a serious procedural or other irregularity in the Tribunal proceedings.
The Appellant's Approach to this Appeal
The "Grounds of Appeal"
Conclusions on the Grounds of Appeal
The Appellant's Additional Oral Grounds
i. The SRA had wrongly refused disclosure of relevant documentation;
ii. The Tribunal treated the critical disputed issues as if they were established fact;
iii. The Tribunal failed to treat his case with the same respect as it treated that of the SRA, and the judgment is as a result unbalanced;
iv. The Tribunal approached the case with a "closed mind"; and
v. The Tribunal reached conclusions on the stem and particulars of allegation one which were plainly wrong.
Conclusions on the Further Grounds
(ii) Established Fact?
"16.1 Monies provided could be used only for two specific purposes (clause 2 of the LFA), which were:
- to fund "Eligible Legal Expenses", as defined in clause 1.1, essentially disbursements in respect of a claim evidenced by an invoice (the use of the loan to fund the Firm's own costs was specifically excluded); and
- to fund the insurance premium relating to the Financial Guarantee Insurance ("FGI")."
"24 The Firm used, or substantially used, the monies for the following purposes, none of which were permitted under the Litigation Funding Agreement:
24.1 About £1,677,500 was used to repay lending from RBS in September 2012, following which the bank's security over the Respondents' personal assets was released;
24.2 £216,000 (of the total funding of £859,054.33 advanced for that purpose) was used purportedly to fund the conduct of the MV Rena litigation by New Zealand lawyers;
24.3 The balance of the funding, or a substantial part of it, was used to fund the general overheads of the Firm (e.g. £300,000 used to pay the Firm's professional indemnity insurance ("PII") premium, including the conduct of wip (despite the fact that the LFA specifically excluded the funding of the Firm's costs in the definitions of "Legal Expenses" and "Eligible Legal Expenses" in clause 1.1."
(iii) A Balanced Approach?
(iii) Closed Minds
(iv) The Allegations
"The Appellant's case in relation to this was that he believed and trusted the people he was dealing with and understood that their activities were being supervised/involved the scrutiny of a large number of other professionals, including auditors and the directors of the fund, who all seemed to him to be highly reputable people.
His case was that when rumours appeared on the internet he asked questions about the issues and whether there was anything in it, and trusted the re-assurance he was provided with. Rightly or wrongly he believed what he was told and that the rumours were untrue.
Such trust may have been misplaced, but the Appellant contends that a finding of whether he was 'on notice' that he was dealing with people who were fraudsters (or committing other serious crime) needed to include a consideration and analysis of his state of mind, and, assuming it were accepted that he believed what he was being told, analysis and explanation of how that was consistent with him being 'on notice'.
Again it is contended by the Appellant that there is no adequate analysis of this in the judgment."
"a highly reputable firm of UK accountants (Baker Tilly) introduced me to the Axiom Fund managers to enable me to obtain general practice funding. The fund managers were aware that we needed general practice funding and said that it was something they were happy to arrange. The existing Axiom Fund loan documentation was 'ill fitted' for general practice funding but that the funds managers were looking to further develop general practice funding and were confident that there funding model permitted general practice funding. The Axiom Fund had its own lawyers, financial advisers and was subject to its own regulatory process. So my firm applied for and accepted the general practice funding". He goes on, "I just do not see what we did that was wrong. At the time of the borrowing we believed we were acting properly and that there was nothing untoward in the borrowing."