Tribunal rejects SRA’s disciplinary “ambush”

SDT: SRA ambush

The Solicitors Disciplinary Tribunal (SDT) has rejected four allegations of multiple rule breaches against a solicitor because they were so badly drafted.

The SDT said an attempt by the Solicitors Regulation Authority (SRA) to amend the allegations on the day of the hearing “had the flavour of an ‘ambush’” and would deprive John Lewis Walker of his defence.

The SDT said the SRA was “under a duty to get matters right, and to have thoroughly checked the factual matrix underpinning the allegation”.

The tribunal went on: “The Rule 5 statement [outlining the allegations] should have been drafted with care during the ample time the applicant had available to it prior to lodging proceedings, and proper efforts should have been made to ensure that its contents were accurate, particularly given that it was supported by a statement of truth signed by its author.

“The application to amend should not have been left to the day of the hearing, which was far too late for such a substantial change to the case against the first and second respondents, and which had the flavour of an ‘ambush’.”

The SDT said that if the amendment reduced Mr Walker’s responsibility for the alleged rule breaches, it would mean that the second respondent, Carl Temple Holden, faced more serious charges.

The first four allegations stated that, while Mr Walker was the sole principal of HJ Walker Sibia and both COLP and COFA, “between 2010 and August 2018” and in one case “between 2010 and July 2018”, he had committed a wide range of accounts rule offences and breached several SRA principles.

Noting that the roles of COLP and COFA “had not existed prior to 2013”, the tribunal said Mr Walker was not sole principal until March 2015, and did not become COLP until 1 August 2016, when he combined all three roles.

Accepting the solicitors’ submission after the SRA closed its case on the four allegations that there was no case to answer, the SDT said it would have been “very difficult if not impossible” to discern which of them arose before and which after 1 August 2016.

The tribunal heard in SRA v Walker and Holden that Mr Walker, admitted in 1981, was sole principal of HJ Walker Sibia, based in Birkenhead.

Mr Holden, admitted in 1990, was an assistant solicitor at the firm between 2006 and 2016. He was no longer at the firm, but remained on the roll.

Turning to the remaining five allegations made against both solicitors, the SDT dismissed the first two, which related to accepting loans from a client company.

The SDT found that Mr Walker was aware of the loans and had accepted them in circumstances where the firm was in financial difficulty, and Mr Holden had negotiated the loans and transferred the money.

However, the SRA’s allegation did not refer to the requirement for the client to take independent legal advice and so no rule breaches had occurred.

“The tribunal found the omission of essential ingredients to support this allegation surprising, and was disappointed by the inadequate drafting of the pleadings.”

A further allegation relating to the loans was dismissed due to “the paucity of the evidence”.

Three further allegations were proved in part. The first one related to receiving or keeping residual balances in client account without any current underlying legal transaction. It was admitted in part by the solicitors.

The second one related to making payments out of client account when directed by the client and without an underlying transaction, and the third to letting money remain in client account without a proper reason.

The tribunal found that Mr Walker’s misconduct arose “largely from omissions” and he had “taken his eye off the ball”, abdicating his supervisory duties to less experienced staff.

He had, it said, turned a “wilful blind eye to matters which should have been under his direct scrutiny”.

The fact that he had been fined £5,000 by the SDT seven years ago for accounts rule breaches showed he had a “careless and cavalier” attitude.

In mitigation, there had been no deception and the client money was eventually returned.

Mr Holden, meanwhile, had displayed “general ignorance of the rules” and a “lack of care”.

It decided that fines were appropriate sanctions. Mr Walker was fined £12,500 and ordered to pay costs of £13,000. Mr Holden was fined £7,000 and ordered to pay £7,000 in costs. The SRA had claimed costs of over £30,000.

    Readers Comments

  • Johanna says:

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