[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
	England and Wales High Court (Administrative Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Administrative Court) Decisions >> Solicitors Regulation Authority v Wingate & Anor [2016] EWHC 3455 (Admin) (21 December 2016) URL: http://www.bailii.org/ew/cases/EWHC/Admin/2016/3455.html Cite as: [2016] EWHC 3455 (Admin)

[New search] [Printable RTF version] [Help]

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT

		Royal Courts of Justice Strand London WC2A 2LL
		21 December 2016

See Also: [2017] EWHC 505 (Admin)

MR JUSTICE HOLMAN:

Introduction and the essential facts

1. This is a statutory appeal from a decision of the Solicitors Disciplinary Tribunal to the High Court pursuant to section 49 of the Solicitors Act 1974. By section 49(2) such an appeal shall lie at the instance of, among others, the applicant. The applicants in this case were the Solicitors Regulation Authority (the SRA) who are now the appellants. They contend that the tribunal wrongly failed to find that a number of serious allegations had been proved against the two respondent solicitors. Section 49(4) provides that the High Court shall have power to make such order on an appeal under section 49 as it may think fit.
2. This is, in the language of the criminal law, a prosecutor's appeal against acquittals. Such appeals by the SRA are rare. I was told that since 2012 there have only been two such appeals (and a small part of a third), and none at all recently before that.
3. At the outset of the hearing, there was some discussion as to whether an appeal by the SRA of this kind, i.e. an appeal against an acquittal which involved serious allegations including that of dishonesty, should be heard by a Divisional Court of two judges. The recent previous ones all have been. Both leading counsel indicated that they had expected that this one would be. That being so, I would suggest that in future if either party to a prosecutor's appeal of this kind considers that it requires to be heard by a Divisional Court, they should draw that to the attention of the listing office as soon as possible so that the court can consider the level of listing.
4. So far as concerns the present case, I was strongly urged by Mr Gregory Treverton-Jones QC, who appears on behalf of both respondents, that I should not adjourn it, but should now hear it, as his clients could not afford the costs of any adjournment. Mr Richard Coleman QC on behalf of the SRA took a relatively neutral position. In those circumstances, notwithstanding the gravity, I decided to hear this appeal alone.
5. The hearing before the tribunal lasted five days between 7 to 11 December 2015. They deliberated during the fifth day and announced their decisions on that day. Their written judgment is dated 31 March 2016. It extends to 421 paragraphs and 117 closely typed pages. It is publicly available online under case number 11354-2015. I will not repeat the considerable detail in it. The gravamen of the case can be stated relatively shortly.
6. The respondents are the only two partners in a small firm called WE Solicitors LLP (the firm) practising out of a single office in Greater Manchester. They employ a staff of six, two of whom are solicitors, plus themselves. They specialise in personal injury litigation, much of which is conducted on a conditional fee basis.
7. In 2012 the firm was clearly struggling financially. They owed £937,000 to HBOS bank, who were pressing hard for repayment of the whole loan, and whose monthly rate of repayments was due, in any event, to rise in September 2012 to a level which the firm had no hope of paying.
8. Within the firm, the First Respondent, Mr David Wingate, concentrated on management and finance, and the Second Respondent, Mr Steven Evans, concentrated on the current litigation workload.
9. After failing to secure replacement funding from other "mainstream" lenders such as other banks, Mr Wingate learned of a fund, which I can call the Axiom Fund or Axiom, which appeared to specialise in lending to fund the costs of litigation. The Axiom Fund appears to have been managed at the material time by an investment manager called Tangerine Investment Management Limited (TIM).
10. Mr Wingate made contact with the Axiom Fund in June 2012. Mr Wingate (but not Mr Evans) had meetings in the period June to August 2012 with a man referred to as Mr H, who appears to have been a representative of TIM who did have authority to negotiate a loan from Axiom, and with Mr Richard Barnett. Mr Barnett was a solicitor who had his own firm and was at the material time a member of the Council of the Law Society. He was described as a panel manager for Axiom and appears also to have had authority to negotiate loans. He has since been struck off.
11. On 22 August 2012 Mr Wingate, on behalf of the firm, signed a written "Funding Agreement" between the firm and Axiom, and also signed on behalf of the firm to acknowledge receipt of the collateral "loan letter". These documents were obviously standard form documents of Axiom.
12. The Funding Agreement extends, with its schedules, to some 33 pages and contains very detailed provisions. Importantly, these included at clause 22 a clause headed "Entire agreement", which provides as follows:

"This Agreement and the other Finance Documents are the entire agreement between the Parties concerning the subject matter of the Finance Documents. Any prior arrangement, agreement, representation or undertaking is superseded and, except as expressly provided, each Party acknowledges that it has not relied on any arrangement, agreement, representation or understanding not expressly set out in the Finance Documents."

13. The agreement specified at clause 2.2 that its "Purpose" was:

"The Panel Firm shall apply the proceeds of each Loan paid to the Panel Firm out of the Facility towards payment of the Eligible Legal Expenses in relation to which the Loan was requested..."

14. The loan letter made clear at page 2 that:

"The proceeds of the Facility shall be used by the Panel Firm exclusively towards the agreed purpose..."

15. "Eligible Legal Expenses" is defined in the definition section of the Funding Agreement as meaning:

"the Legal Expenses relating to a Claim which is evidenced by an invoice..."

16. The language of the written Funding Agreement was, therefore, crystal clear, and was reinforced by a number of other provisions of it to which I need not specifically refer, that the purpose of the loan towards which the proceeds must be used exclusively was funding the legal expenses of individual claims. The entire agreement clause expressly superseded and excluded reliance upon any prior arrangement, agreement, representation or undertaking not set out in the finance documents.
17. On 29 August 2012 the firm drew down a total of £900,000 from Axiom. This was made up of a "facilitation fee" to TIM of £300,000, being 50 per cent of the amount loaned, which was aggregated as part of the loan to the firm; £27,000 as the premium for a financial guarantee policy; and £573,000 paid to the firm.
18. The firm applied the £573,000 as follows:

(i) paying £450,000 to HBOS on 6 September 2012 pursuant to an agreement with HBOS that they would accept that sum in full and final settlement of the debt owed to them;

(ii) paying £20,000 on 14 September 2012 as "dividends" of £10,000 each to Mr Wingate and Mr Evans;

(iii) paying £11,535 on 17 September 2012 to discharge a loan from Lease Direct which had itself been utilised to pay arrears of VAT; and

(iv) paying £27,047 on 5 October 2012 to HM Revenue and Customs.

The balance of £64,418 was used to fund the firm's general office expenses, including salaries and overheads.

19. None of the payments under (i) to (iv) above, totalling £508,582, fell remotely within the Purpose in the Funding Agreement nor complied in any way whatsoever with any of the terms of the Funding Agreement. Although the balance may be said to have funded the making of claims, the manner in which it was simply paid into the general funds of the firm did not accord at all with the requirements of the Funding Agreement.
20. Further, the Funding Agreement expressly provided that the whole loan was to be repaid within 12 months, together with interest at 15 per cent. Mr Wingate accepted in evidence that he knew when he signed the written Funding Agreement that there was no prospect of the firm repaying the principal and interest within 12 months.
21. Mr Treverton-Jones made the point that under clause 6 of the Funding Agreement, Axiom could, "entirely at its discretion", immediately lend a loan back to the firm for a further 12 months (at the higher rate of interest of 18 per cent), but that required that theloan had first been "repaid in full" at the end of the 12 months. Mr Wingate knew that the firm had no means, and no prospect, of repaying the loan in full at that stage even for a scintilla of time.
22. In early 2013 Axiom went into receivership. The firm failed to repay before or on 29 August 2013 the loan and interest, which then totalled about £967,000. In November 2013 the firm entered into a settlement agreement with the receiver of Axiom in the total sum of £300,000.
23. Meantime, the SRA had begun an investigation into the various firms (about 10) of solicitors who had borrowed from Axiom, and also into Mr Barnett.
24. Mr Wingate was challenged about the use to which the firm had put the money. His case and explanation from first to last has been, in summary and in essence, that although the Funding Agreement said what it did, including the entire agreement clause, it was not, in fact, the true agreement between the firm and Axiom. Rather, the money had been paid pursuant to an oral agreement between himself, on behalf of the firm, and Mr H and/or Mr Barnett, on behalf of Axiom, reached at the meetings I have mentioned.
25. Mr Wingate says in particular that the purpose to which the loaned monies could be put was not in any way limited by the terms of the written Funding Agreement, but extended to the general purposes of the firm and included specifically making the repayment to HBOS. He says, also, that the period for repayment was expressly orally agreed as two years, not one.
26. Somewhat surprisingly, Mr Wingate was not able to produce a single document recording or evidencing what he claimed had been said at any of the meetings, and not even the briefest of notes made by himself. He said that there was nothing at all in writing.
27. The account of Mr Wingate does, however, gain some support from the contents of the draft due diligence report upon the firm prepared in early August 2012 by the well-known accountants, Baker Tilly, on the instructions of Axiom or TIM. That states under the heading "Proposition" that the firm wished to borrow circa £1.7 million from Axiom:

"to fund the redemption of a loan from HBOS and to finance an expansion of the ID [industrial disease] department. The HBOS Loan amounted to £937k at 31 May 2012. Management advises that it currently has an agreement to redeem the loan for £500k."

28. The Baker Tilly report further states under the heading "Financial projections" that a key assumption underlying the firm's detailed financial projection is:

"Axiom funding of £3,600 per case repayable upon the earlier of settlement of a case or 23 months after drawdown, together with any interest payable."

[Note, however, that the Baker Tilly report appears to be silent as to when the "initial loan" stated in the report to be £864k (including an arrangement fee) would be repayable.]

29. In any event, the tribunal, who heard his oral evidence at length, found Mr Wingate to be "credible and honest" (see paragraph 374 of their judgment) and found that the facts were as Mr Wingate stated them to be. They accepted at paragraph 380.33 that Mr Wingate "believed that the oral agreement took precedence over the terms of the Funding Agreement."
30. Mr Wingate said that he reasonably and justifiably believed that he was dealing with people of integrity and repute upon whom he could rely. His online researches into Axiom had indicated that its own accountants were BDO and its solicitors Ogier, both of whom are of international repute. The due diligence report into the firm was undertaken by Baker Tilly, also of good repute. Mr Barnett was an experienced solicitor and a member of the Council of the Law Society. Mr Wingate said that after his first meeting with Mr Barnett and Mr H together on 10 August 2012:

"I was not left with any questions as to the integrity or honesty of Mr Barnett or Mr H. It seemed to me that everyone was quite clear on the firm's objectives and what it wanted to do with the funds when received."

31. Mr Wingate and Mr Evans accordingly strongly say that in relation to the Axiom loan and the use to which they put the money, they have done no professional misconduct.
32. The investigation by the SRA did expose a malpractice in relation to the firm's financial management and bookkeeping, not related to the Axiom loan, to which I will refer discretely much later in this judgment under the heading "Ground six" below.

Dishonesty

33. The allegations before the tribunal, and the grounds of appeal before me, included allegations that Mr Wingate was dishonest in various respects. The tribunal expressly acquitted him of dishonesty. As already quoted, they found Mr Wingate to be "credible and honest".
34. The written position of the SRA at the outset of this appeal was that they proposed to pursue their case that Mr Wingate had been dishonest, and that the tribunal had erred by leaving significant matters out of their consideration of honesty and by being over influenced simply by their impression of Mr Wingate as a witness and by some evidence as to good character.
35. I pointed out to Mr Coleman that it would be difficult, if not impossible, for me on appeal to substitute a conclusion or finding of dishonesty in the face of the clear conclusions on that aspect by the tribunal who had heard the witnesses. At most, I could have set aside the existing decisions and remitted the whole, or substantially the whole, case to be reheard by a differently constituted panel of the tribunal.
36. This case has already been very protracted. The events occurred well over four years ago now, and the respondents and their firm have continued to practise throughout. It has already cost about £375,000 in combined costs to the conclusion of the present hearing. It would apparently take at least six months to fix another five day hearing by thetribunal, and the combined costs of such a hearing would again run well into six figures.
37. In these circumstances, I questioned the proportionality of pursuing the appeal in relation to dishonesty. After taking instructions, Mr Coleman said that the SRA would no longer pursue the appeal in relation to any allegation of dishonesty by Mr Wingate. He did, however, make quite clear that the appeal is pursued in relation to allegations of lack of integrity. He submitted, and I agree, that dishonesty and lack of integrity are not the same. While all dishonesty involves a lack of integrity, not all lack of integrity involves dishonesty. The law requires a subjective element to any finding or conclusion of dishonesty, but the question whether a person lacked integrity is objective.
38. In these circumstances, I eliminate any further consideration of dishonesty from this judgment or this case. The conclusions of the tribunal on that aspect stand. Mr Wingate was not dishonest in anything that he did or omitted to do in relation to the Axiom loan or any of the allegations made against him.

The SRA Principles

39. This case engages one or more of the following "SRA Principles" which are mandatory principles which apply to all solicitors:

"You must:

...

2. act with integrity;...

...

6. behave in a way that maintains the trust the public places in you and in the provision of legal services...

...

8. run your business or carry out your role in the business effectively and in accordance with proper governance and sound financial and risk management principles;..."

40. I will refer to these as Principle 2, 6 or 8 respectively.
41. The published Principles elaborate Principles 2 and 6 as follows:

"Principle 2:...

2.6. Personal integrity is central to your role as the client's trusted adviser and should characterise all your professional dealings with clients, the court, other lawyers and the public."

42. Pausing there, although that statement may focus upon the role as a client's trusted adviser, it also requires personal integrity in all professional dealings with "the public". The words "the public" are very wide and, in my view, Principle 2 clearly required "personal integrity" in Mr Wingate's dealings with Axiom.

"Principle 6:...

2.11. Members of the public should be able to place their trust in you. Any behaviour either within or outside your professional practice which undermines this trust damages not only you, but also the ability of the legal profession as a whole to serve society."

Integrity

43. In SRA v Chan and others [2015] EWHC 2659 (Admin), Davis LJ, sitting in the Divisional Court, said at paragraph 48:

"As to want of "integrity"... it serves no purpose to expatiate on its meaning. Want of integrity is capable of being identified as present or not, as the case may be, by an informed tribunal or court by reference to the facts of a particular case."

44. That passage and approach was cited with approval by Sharp LJ, again sitting in the Divisional Court, in the recent case of Scott v SRA [2016] EWHC 1256 (Admin) at paragraph 40. The authority of Scott also makes quite clear at paragraphs 48 and 59 that there is "an obvious distinction" between the concepts of dishonesty and lack of integrity, and that the terms are "not synonymous".
45. I respectfully agree with what both Davis and Sharp LJJ have said. It is neither necessary nor desirable to seek to define what is meant by integrity or lack of integrity, and it is a matter for the judgment of the tribunal or court on the facts of any given case whether those facts demonstrate or reveal a lack of integrity.

Public trust in the solicitor and in the provision of legal services

46. In Bolton v Law Society [1994] 1 WLR 512 at page 518H, Sir Thomas Bingham MR memorably referred to maintaining:

"...the reputation of the solicitors' profession as one in which every member, of whatever standing, may be trusted to the ends of the earth."

47. In Iqbal v SRA [2012] EWHC 3251 (Admin), Sir John Thomas, sitting in the Divisional Court, said at paragraph 23:

"It seems to me that trustworthiness also extends to those standards which the public are entitled to expect of a solicitor, including competence. If a solicitor exhibits manifest incompetence, as, in my judgment, the appellant did, then it is impossible to see how the public can have confidence in a person who has exhibited such incompetence. It is difficult to see how a profession such as the medical profession would countenance retaining as a doctor someone who had showed himself to be incompetent. It seems to me that the same must be true of the solicitors' profession. If in a course of conduct a person manifests incompetence as, in my judgment, the appellant did, then he is not fit to be a solicitor. The only appropriate remedy is to remove him from the roll. It must be recalled that being a solicitor is not a right, but a privilege. The public is entitled not only to solicitors who behave with honesty and integrity, but solicitors in whom they can impose trust by reason of competence."

48. Mr Treverton-Jones stressed the somewhat extreme facts of Iqbal in which a solicitor (incompetently, but not dishonestly) had asserted that he had a certain partner when in truth he did not; but it seems to me that the proposition described by Sir John Thomas in paragraph 23 that "trustworthiness extends to those standards which the public are entitled to expect of a solicitor, including competence" is of general application for the very convincing reasons which he gave and his example of a doctor. Clearly, however, it is not every instance of incompetence which amounts to misconduct, and I stress the word "manifest" used by Sir John Thomas.
49. As the issue of competence falls within Principle 6, the overarching question must be whether the proven level of incompetence is such as to undermine the trust which the public places in the solicitor and in the provision of legal services.

The approach of this court on appeal

50. Both leading counsel drew my attention to some of the many authorities upon the approach to be adopted on an appeal from a specialist tribunal and especially one which, in this case, heard considerable oral evidence, deliberated at length, and produced a very conscientious and painstakingly detailed judgment.
51. Again in Chan, Davis LJ observed at paragraph 49 that:

"There is no purpose in citation of the various authorities... The approach to be applied is well-established."

52. The essence of the appeal in the present case (the allegation of dishonesty having been abandoned) is based not so much upon the findings of primary facts, as upon the judgment or assessment as to whether they amount to a breach of one or more of Principles 2, 6 or 8.
53. In Alagappa in the Divisional Court on 27 June 1995, Lord Taylor of Gosforth said at page 129 of the transcript:

"The judgment of the Solicitors' Disciplinary Tribunal is not final and not without recourse to this court. But its members are experienced solicitors who are in a good position to assess the level at which to place the gravity of any shortcomings in a solicitor's conduct...

This court must be cautious in departing from the view formed by a solicitors' tribunal on a matter concerning the level of seriousness at which shortcomings by a solicitor are to be pitched. It must be shown that no reasonable tribunal could have arrived at the conclusion which the particular tribunal has reached, taking into account all proper matters and ignoring matters that ought not to be considered."

54. Lord Taylor quoted with approval from a judgment of Watkins LJ in which the latter had said:

"What constitutes conduct unbefitting a solicitor is best judged... by his professional colleagues, applying their undoubted experience of what is to be properly expected of a solicitor in his practice..."

55. In the present case, however, while Mr Wingate and Mr Evans were clearly acting in their professional practice as solicitors (they were borrowing money for the firm) and not in a private capacity, judgment or assessment of their conduct does not require any special experience or expertise of the practice of solicitors.
56. In the present case, I will not interfere with any conclusion of the tribunal unless I am satisfied that it is plainly wrong in that they reached a decision which no tribunal correctly directing itself and appropriately analysing the evidence could rationally have reached; or that they failed to reach the only decision which any tribunal correctly directing itself and appropriately analysing the evidence must rationally have reached.

The grounds of appeal

Ground one

57. At paragraph 379 of their judgment, the tribunal said:

"It was uncontroversial that the First Respondent had been told by Mr H and others that he could use the Axiom funding for purposes other than those set out in the Funding Agreement. The basic question the Tribunal had to determine, applying the highest standard of proof, was whether there had been professional misconduct in signing the Funding Agreement and using the monies for purposes not permitted in that agreement."

58. That paragraph does well summarise the central issue in this case. It was elaborated in allegation 1.1, which the tribunal then quoted, namely that:

"The First Respondent caused or permitted the firm to accept, and use, £573,000... from the Axiom Fund in circumstances where it was improper for him to do so for the following reasons, and each of them..."

59. Eight numbered reasons or factors are then set out. The gist of reasons 1.1.1, 1.1.3, 1.1.4 and 1.1.5 was that the money had not been applied in accordance with the terms of the Funding Agreement and that there was no intention to repay within the time required bythe Funding Agreement, viz one year.
60. Reason 1.1.2 was that:

"He knew that the Litigation Funding Agreement... did not reflect the purpose for which the firm intended to use and/or in fact used the money, and that the intended and actual use of the money was not properly documented by him and the investment manager."

61. The gist of reasons 1.1.6, 1.1.7 and 1.1.8 was that Mr Wingate was on notice of the serious risk that TIM or Mr H and/or Mr Barnett were acting fraudulently, or that he unreasonably risked being party to a fraudulent transaction, or should have appreciated that the transaction was dubious and should not have accepted the money.
62. Allegation 1.1 concluded that Mr Wingate had thereby acted without integrity, in breach of Principle 2, and had behaved in a way that did not maintain the trust the public placed in him and in the provision of legal services, in breach of Principle 6.
63. The tribunal held at paragraph 380.30 of their judgment that it was "clearly unwise" of Mr Wingate to sign a Funding Agreement which, on his own case, did not set out the terms agreed, and that given that the written Funding Agreement contained an "entire agreement" clause, "signing it as it stood showed a lack of judgment on the part of" Mr Wingate.
64. At paragraph 380.31 the tribunal referred to Mr Wingate's "lack of care", but the tribunal continued at paragraph 380.32 that:

"The key issue for the Tribunal was whether reliance on [the assurances from Mr H and Mr Barnett], rather than complying with the terms of the Funding Agreement, amounted to professional misconduct."

65. After referring to each of allegations 1.1.1 to 1.1.8, the tribunal concluded at paragraphs 380.50 and 380.51 of their judgment that:

"Overall, whilst the Tribunal considered that the First Respondent had in fact been unwise to enter into an Agreement which was not properly documented

– or evidenced... – it was not satisfied so that it was sure that the First Respondent had had any appreciation that he was or may have been "conned" by Mr H, Mr Barnett or others. The Tribunal could not be sure that the First Respondent had appreciated, or should have appreciated that it was improper to accept and use the Axiom funding. With hindsight, the dubious nature of the transaction had become apparent. However, the Tribunal could not be sure that the First Respondent had had any reason to suspect that the transaction may have been improper, during the summer of 2012. A solicitor should be more circumspect in dealings with financial institutions, and give proper consideration to the real nature of the transaction but in this instance the Tribunal noted that the First Respondent had been acting during a period of considerable professional pressure and had not turned his mind to matterswhich he ought to have considered if he had acted prudently.

380.51. The Tribunal could not be sure, in the particular circumstances of this case and having heard the First Respondent in evidence, that the Applicant had proved to the higher standard that the First Respondent had acted without integrity or in a way which would fail to maintain the trust the public placed in him or the provision of legal services. This allegation had not been proved to the required standard."

66. Ground one of the appeal challenges that conclusion.
67. Reason or factor 1.1.1 was that Mr Wingate knew that the firm had not complied with the terms of the Funding Agreement, and reason or factor 1.1.2 was that he knew that the Funding Agreement did not reflect the purpose for which the firm intended to use the money and that the intended and actual use was not properly documented. These two reasons or factors, standing alone, were found proved by the tribunal and had in fact been admitted (as he was bound to do) by Mr Wingate; but at paragraph 380.36 the tribunal said:

"Whether those factors amounted to professional misconduct was considered in the light of the findings on the other factors."

68. The essential submission of Mr Coleman is that reasons 1.1.1 and 1.1.2 coupled with reason 1.1.3, to the effect that there was no intention of repaying the money within the time required by the Funding Agreement, should have been considered alone and that, even when considered alone, they clearly involve a lack of integrity and underlying trust in breach of Principles 2 and 6.
69. Mr Coleman submits that to sign a written agreement which, on the solicitor's own case, flatly contradicts the terms of the oral agreement, necessarily involves a lack of integrity and seriously undermines trust in the solicitor and in the provision of legal services, as does accepting and disbursing a loan in ways which flatly contradict the terms of the written agreement signed only about a week before.
70. In my view, the approach and reasoning of the tribunal did indeed fall into error. Allegation 1.1 clearly alleged impropriety for the listed reasons "and each of them". The tribunal were mistaken in adopting the approach described at paragraph 380.36 that:

"Whether [factors or reasons 1.1.1 and 1.1.2] amounted to professional misconduct was considered in the light of the findings on the other factors."

71. They misled themselves by saying at paragraph 380.32 that:

"The key issue... was whether reliance on [assurances from Mr H and/or Mr Barnett], rather than complying with the terms of the Funding Agreement, amounted to professional misconduct."

72. The result and effect of these errors was that the tribunal never asked themselves the noless key question: was it professional misconduct for a solicitor to sign a solemn written contract which he knew (on his own case) was not what had been agreed, which he had no intention of carrying out, and with which, so far as concerned repayment, he knew he could not comply?
73. The case of Mr Wingate was that he was entitled to rely upon the apparent probity and repute of Mr H and Mr Barnett. He had made clear to them how the firm wished to spend the money. Baker Tilly had made express reference to redeeming the HBOS loan, and some reference to repayment after 23 months rather than 12. When Mr Barnett had sent to him the written Funding Agreement, he, Mr Wingate, had queried with Mr Barnett how markedly it differed from what they had orally agreed, but Mr Barnett had told him that it was at that time the only form of written agreement that Axiom possessed. A new form of agreement was in the process of being drafted by counsel, but it would not be ready in time.
74. Mr Wingate said that Mr Barnett had said that the existing form of agreement was only temporary and a new one could be signed later, but meantime it must be signed in this form as "something to hang their hat on in the meantime". Mr Wingate said also that he and Mr Barnett viewed the written agreement as being "a receipt" for the money. He said that Mr Barnett had assured him that the agreement was "fit for purpose".
75. In cross-examination, Mr Coleman twice expressly put to Mr Wingate that, on his own account of the facts, the document was a sham. The answers of Mr Wingate at transcript page 18, lines 6 to 8 (now bundle 2, page 195) and page 58, lines 11 to 20 (now bundle 2, page 205) are perhaps somewhat equivocal, but his final position seems to have been:

"It depends on the use of sham - it didn't properly reflect what we were dealing with and I explained the reasons for that."

76. The submission of Mr Coleman on ground one can be distilled into the following. Whether Mr Wingate admitted it was a sham or not, the written Funding Agreement was, on his own case and evidence, a sham. Any solicitor who signs a sham contract of this magnitude and significance in relation to a loan of £900,000 must objectively lack integrity in that regard and/or must seriously undermine public trust both in himself and in the provision of legal services. No tribunal, correctly directing itself and appropriately analysing the evidence, could rationally have concluded that this was merely unwise or lacking in care or judgment. Any such tribunal must rationally have concluded that Mr Wingate lacked integrity and undermined trust in breach of Principles 2 and 6.
77. On behalf of Mr Wingate, Mr Treverton-Jones stresses that both the respondents are decent, honourable and hard working solicitors of good standing who, he submits, were rightly acquitted. Their evidence was believed. He stresses that Mr Wingate was entitled to rely upon the apparent probity and standing of Mr H and Mr Barnett. He submits that there was no sham and no lack of integrity, because Axiom through Mr H and Mr Barnett knew exactly what had been agreed, and Axiom, through Mr H and Mr Barnett, were merely putting forward the written document as a form of receipt and "hook to hang their hat on". There was no sham because Axiom themselves were not treating the written agreement as anything more than that hook.
78. I have not found this an easy decision. I am very conscious indeed that the assessment of the professional and specialist tribunal was that there had been a lack of wisdom and an error of judgment, but not misconduct. But as I have described above, I am satisfied that there were errors in their reasoning process and that they failed to ask themselves the correct key question: was it professional misconduct for a solicitor to sign the documents he did in the circumstances in which he did so? I regret that I have been forced to conclude that it was.
79. I do not, within the context of ground one, fault or criticise the conduct of Mr Wingate up to the point when he signed the Funding Agreement. I completely accept for present purposes that he was entitled to believe that he was dealing with people of repute and that a senior solicitor of repute had told him that if he wished to receive the loan he must sign that document, but that it was merely a hook and a receipt and could be replaced by another document later, once drafted by counsel.
80. Mr Wingate is, however, himself also a solicitor of some seniority. By 2012 he had been in partnership for over 10 years (between 2001 and 2006 in a predecessor firm to the present firm). Further, Sir Thomas Bingham's ringing words in Bolton expressly refer to every member of the profession "of whatever standing".
81. The agreement which Mr Wingate signed was not the sort of standard "terms and conditions" agreement that many people may sign almost daily in relation to relatively minor transactions without reading the terms. It was a very serious, and very detailed contract for a facility of £5 million and an actual loan at that time of £900,000, which was, to him and his firm, an enormous sum. It must have been obvious to him that Axiom would not lend such a sum without a detailed written contract upon which they could rely.
82. Mr Wingate knew that the written terms flatly contradicted what he says had been agreed orally, although not documented in any way, between himself and Mr H and Mr Barnett. He says that he spent about one and a half hours reading the agreement. He knew that it contained provisions for repayment with which the firm could not comply. He knew that it contained the entire agreement clause, although he says that he did not pay much attention to it.
83. In my view, whether Mr Wingate admitted it in his oral evidence or not, the solemn written contract was, on his own account of the facts, a complete sham. Solemn written contracts, especially for borrowing so large a sum of money, have a very important place in any legal system. They ought not to be signed by anybody lightly, and they certainly should not be signed by a lawyer lightly. Further, it would not maintain, but would tend to undermine, the trust that the public places in solicitors if the public knew that in order to obtain a significant loan for the purposes of his firm and himself, a solicitor had, in whatever circumstances, signed a sham contract.
84. I am driven to conclude, and any tribunal acting rationally would have been driven toconclude, that at the point when he signed that sham contract and then drew down the money pursuant to it, Mr Wingate did not act with integrity, in breach of Principle 2, and did not behave in a way which maintains the trust of the public in him and, importantly, in the provision of legal services, which includes the provision of contracts, in breach of Principle 6.
85. To that extent, this appeal must be allowed under ground one.

Ground two

86. Ground two refers to ground one as the appellants' "primary case" and the SRA have now succeeded on that ground and case. However, that does not render ground two redundant or otiose.
87. The original allegations against Mr Wingate included at paragraphs 1.1.6 to 1.1.8 allegations to the effect that he was on risk that TIM and/or Mr H or Mr Barnett were acting fraudulently or committing some other serious breach of duty upon Axiom, and that he failed to carry out sufficient inquiries to avoid that risk. He unreasonably risked his own firm being party to a fraud upon Axiom, and he should have known or suspected that the transaction had the hallmarks of being dubious and should not have accepted or used the money.
88. Mr Coleman was at pains to stress that he does not allege within this appeal or the proceedings against Mr Wingate and Mr Evans that the transaction was actually fraudulent. I myself have no idea whether there was a fraud upon Axiom. So far as I am aware, there has never yet been any prosecution for, still less any conviction of, fraud, nor any finding of fraud in any civil proceedings. But the gist of the present allegation is that that there were sufficient "hallmarks" of fraud or of the "dubious" nature of the transaction that Mr Wingate, being a solicitor, should not have proceeded with it.
89. The gist of paragraphs (a) to (g) of ground of appeal two is that the tribunal wrongly failed to conclude that it was professional misconduct on the part of Mr Wingate to contract through Mr H and/or Mr Barnett with Axiom in such dubious circumstances. Mr Coleman submits that a solicitor should not become involved in, or continue with, a transaction which, objectively viewed, has the hallmarks of possible fraud or other impropriety. If he does do so, he is at best manifestly incompetent in the Iqbal sense.
90. Mr Coleman relies in particular upon the authority of the Divisional Court in Bryant v Law Society [2007] EWHC 3043 (Admin), [2009] 1 WLR 163. In Bryant, the solicitors continued to act for their clients in transactions which, it was alleged, they should have appreciated involved money laundering or fraud. Giving the judgment of the court, Richards LJ referred at paragraph 172 to:

"...one or more of the transactions was "dubious" in the sense that they bore the indicia of fraud or possible fraud, although not necessarily of fraudulent investment schemes. Therefore, it was professional misconduct for the [solicitors] to act or to continue to act in relation to them without at least carrying out sufficient enquiries to satisfy themselves that the transactions were not, in fact, fraudulent."

91. Although in that passage the court was describing the basis upon which the case had been put, the court referred back later in their judgment to "dubious" "in that sense" or "in the above sense". At paragraph 173 the court stressed that the tribunal has to be satisfied to the proper standard of proof that the solicitor knew that one or more of the transactions was "dubious" in that sense. That requires a finding that the solicitor "actually knew that the transaction was dubious, not simply that he ought to have done so", but it is sufficient if the solicitor:

"deliberately shut his eyes to the obvious or refrained from enquiry because he suspected the truth but did not wish to have his suspicions confirmed."

92. However, even if the solicitor does not knowingly participate in a dubious transaction, he may still be:

"...incompetent to a high degree, in failing to recognise what were, objectively speaking, "dubious" transactions and in deciding, in the circumstances existing, to act... or in deciding to continue to do so."

(See paragraphs 177, 236 and 239).

93. Relying upon Bryant, Mr Coleman further submits that the public require a solicitor to have the competence to spot the hallmarks of fraud and dubious transactions and that that is so whether he is acting for a client or, as here, for his own firm but in a matter closely connected with the practice of the firm.
94. Mr Coleman submits that, however reputable Mr H and in particular Mr Barnett appeared to be, Mr Wingate should have spotted the hallmarks of a dubious transaction, at any rate at the point when Mr Barnett was insisting upon his signing the written Funding Agreement which was so completely inconsistent with the terms of their oral agreement. Mr Coleman submits that the facts were "redolent with suspicion" and that Mr Wingate should have appreciated that Mr Barnett was acting disreputably by asking him to do a disreputable thing, viz sign a sham document.
95. The tribunal considered this aspect of the case in paragraph 380.40 of their judgment where they said:

"It was alleged that the First Respondent was on notice that those purporting to act for Axiom were acting in such a way that there was a risk of wrongdoing and/or fraud on the Fund..."

At paragraph 380.46 they said:

"The Tribunal noted and found that the terms of the written Funding Agreement did not reflect the anticipated use of the funds. Whilst there was good reason to think that Mr Barnett's explanation, that the Agreement could not be redrafted properly to reflect the terms agreed, was a weak explanation,the Tribunal noted that the First Respondent had put forward some oral evidence to the effect that he had been told the Agreement was to be redrafted and replaced in a few months... There was some evidence from the First Respondent about why the Funding Agreement was so different to the terms of the "true" oral agreement. In these circumstances, the Tribunal could not be sure to the higher standard that the First Respondent was or should have become suspicious of Mr Barnett's unwillingness to record the true terms in writing."

Within paragraph 380.50, already quoted above, the tribunal said that it:

"...was not satisfied so that it was sure that the First Respondent had had any appreciation that he was or may have been "conned" by Mr H, Mr Barnett or others. The Tribunal could not be sure that the First Respondent... should have appreciated that it was improper to accept and use the Axiom funding. With hindsight, the dubious nature of the transaction had become apparent. However, the Tribunal could not be sure that the First Respondent had had any reason to suspect that the transaction may have been improper, during the summer of 2012."

96. In my view, and in agreement with Mr Coleman, the weakness of this reasoning by the Tribunal is in paragraph 380.46. In the first part of that paragraph, quoted above, they had themselves said that:

"there was good reason to think that Mr Barnett's explanation... was a weak explanation."

97. That being so, the tribunal were, in my view, bound to conclude that Mr Wingate "should have become suspicious of Mr Barnett's unwillingness to record the true terms in writing". At best, Mr Wingate must have been highly incompetent not to appreciate the suspicious or dubious nature of the transaction when there was good reason to think that Mr Barnett's explanation was weak.
98. In my view, original allegations 1.1.6, 1.1.7 and 1.1.8, and paragraphs (a) to (g) of ground two of the amended grounds of appeal, do not involve or amount to a lack of integrity separate or discrete from, or additional to, that under allegations 1.1.1, 1.1.2 and 1.1.3 and ground one; but they do involve and amount to a proven charge of manifest incompetence in failing to spot the dubious nature of the transaction proposed by Mr H and/or Mr Barnett.
99. When Mr Barnett proffered a detailed written Funding Agreement so completely inconsistent with the oral agreement, Mr Wingate displayed manifest incompetence in not, at that point, appreciating the dubious nature of the transaction he was being invited to enter into. He was highly gullible and he was indeed "conned", and any rational tribunal must, on their own reasoning, have so found.
100. Within paragraphs (h) and (i) of ground two there is a discrete matter which ties in with allegation 1.1.4 of the original allegations. That charged Mr Wingate as follows:

"He misused the funds received by failing to apply them only towards "Eligible Legal Expenses", as required by the Litigation Funding Agreement, and further by applying part of the funds for the personal benefit of himself and the Second Respondent."

101. Paragraphs (h) and (i) of ground two assert that the tribunal misdirected themselves by concluding that the First Respondent had not misused the funds generally, and specifically by making the payments of £10,000 to each of himself and Mr Evans personally. The tribunal dealt with this at paragraph 380.38, where they said:

"It was fully accepted that the First Respondent had used the funds for purposes other than payment of "Eligible Legal Expenses"; indeed, it appeared that none of the Axiom money had been used directly for that purpose. It was also accepted that some of the Axiom money had been made to make payments of £10,000 each to the Respondents. On the First Respondent's evidence, he believed he could use the funds for various purposes which were not included in the Funding Agreement. Whilst it was clearly the case that the money had not been used for the purposes set out in the Funding Agreement, the Tribunal was not satisfied that this amounted to "misuse" of the funds, as it had been agreed with the Fund's representatives that it could be used for the general purposes of the Firm."

102. The proposed payment to HBOS had been referred to in the Baker Tilly report, as had financing an expansion of the ID department, but there is no reference in that report to disbursing any part of the loan in personal payments to either Mr Wingate or Mr Evans. Even on Mr Wingate's own evidence and case, nothing had been said between him and Mr H and/or Mr Barnett about making payments, whether "dividends" or otherwise, to himself and Mr Evans personally. The highest it was put was, as the tribunal said in paragraph 380.38, that the money "could be used for the general purposes of the firm".
103. Mr Coleman submits that the payment of a dividend of £10,000 to each respondent was not a "general purpose of the firm" and, therefore, it was not a permitted purpose even on Mr Wingate's own case. Mr Treverton-Jones, on the other hand, submits that partners' reasonable drawings are an overhead of the firm just as much as the salaries of other staff or other overheads, such as rent or utility bills. The payments did, therefore, he submits, fall within the general purposes of the firm which, on the findings of the tribunal, had been orally agreed with Mr H and/or Mr Barnett.
104. I have very anxiously considered this aspect of this appeal. On one view, it may appear particularly irregular or improper that Mr Wingate allowed a total of £20,000 rapidly to be paid out to himself and Mr Evans personally. It was, however, a relatively small proportion (3.5 per cent) of the total amount borrowed, even if that is taken as the

£573,000 actually paid into the account of the firm.

105. Given Mr Wingate's account, which was accepted by the tribunal, that the oral agreement was that the funds could be used for the general purposes of the firm, I am unable to conclude that the tribunal were bound to conclude that those payments were improper ora misuse of the borrowed funds.
106. Ground two accordingly succeeds to the extent only that Mr Wingate showed manifest incompetence in not, when Mr Barnett proffered the written Funding Agreement, appreciating the dubious nature of the transaction. He was, in this respect, highly gullible.

Ground three

107. Ground three is no longer pursued.

Ground four

108. This ground relates to the Second Respondent, Mr Evans, alone.
109. Allegation 2.1 of the original allegations alleged that:

"The Second Respondent caused or permitted the firm to accept, and use, £573,000 (net of "facilitation fee" and insurance premium) from the Axiom Fund, and personally benefited from the money, without making adequate enquiries into whether or not the money had been properly obtained by the firm. He thereby acted without integrity, in breach of Principle 2 of the 2011 Principles, and behaved in a way that did not maintain the trust the public placed in him and in the provision of legal services, in breach of Principle 6."

110. The tribunal naturally and appropriately considered this allegation against Mr Evans in the light of their findings in relation to Mr Wingate and their acquittals of Mr Wingate. They said at paragraphs 388.10 and 388.11:

"...It was also understandable that the Applicant would be concerned that in a two partner firm, which was in significant financial difficulty, one of the two partners took no active role in reviewing the proposed loan... The Tribunal had not found any misconduct proved in relation to allegation 1.1. The Tribunal could not, therefore, find that the Second Respondent had behaved in a way which amounted to professional misconduct.

388.11. The Tribunal noted and found that the Second Respondent had relied totally on his business partner, and the Firm's accountant, in relation to the negotiation and use of the Axiom Fund loan. Whilst this may have been inadvisable where such a large amount of money was at stake, there had been no proven wrongdoing by the First Respondent and so the Second Respondent could not be found guilty simply because he failed to make further enquiries in relation to the Axiom loan. The Tribunal was satisfied on the facts of this case that the Second Respondent had made adequate, if not full, enquiries. This allegation was not proved."

111. The thrust of those reasons is that as Mr Wingate was not guilty, nor could Mr Evans be, although the tribunal did also make the positive finding in the penultimate sentence of paragraph 388.11 that:

"The Tribunal was satisfied on the facts of this case that the Second Respondent had made adequate, if not full, enquiries."

112. As I have now concluded that Mr Wingate was in fact guilty of professional misconduct and "proven wrongdoing", the tribunal's decision in relation to Mr Evans necessarily falls for reconsideration in the light of my substituted findings and conclusion.
113. The evidence of Mr Evans was to the effect that he had always trusted Mr Wingate implicitly and still does do so. Mr Wingate did his job and he, Mr Evans, did his, although they did report back to each other. He, Mr Evans, did not deal with the accounts. Mr Wingate did so.
114. Mr Evans said at transcript page 210, lines 14 to 18 (now bundle 2, tab 6, page 243) as follows:

"Q. But you had responsibility for the accounts as a partner?"

"A. I appreciate that, but with our division of labour in a small firm, I couldn't double check and triple check everything that David was doing. David had always dealt with the accounts. I had dealt with other matters... "

115. Mr Evans never met Mr H or Mr Barnett or anyone else connected with TIM or Axiom. He never read, nor even saw, the written Funding Agreement and, indeed, by the time of the hearing before the tribunal, he said that he had never even by then read it. He did meet the investigator from Baker Tilly, but never read their report.
116. In my view, these facts do not indicate or support that Mr Evans acted in any way without integrity. As he did not even read the Funding Agreement, he did not know that it was so inconsistent with the terms that Mr Wingate said had been orally agreed. But in my view, it is inescapable that Mr Evans demonstrated a manifest lack of competence such as would undermine, rather than maintain, the trust the public places in him in breach of Principle 6.
117. This was a firm of just two partners. Mr Evans knew, just as well as Mr Wingate, that they were under extreme financial pressure to repay HBOS as well as other significant debts. As he knew, the firm was now borrowing what for them was the very large sum of £573,000 and committing themselves to repaying altogether £900,000 plus a high rate of interest. He knew, at any rate at the point when it was agreed and paid, that he and Mr Wingate were making and receiving personal drawings or dividends of £10,000 each.
118. To my mind, Mr Evans was under an obvious and high duty to take basic steps to satisfy himself as to the propriety of the loan, and that the manner in which they proposed to defray it was permissible and within the terms of the loan agreement. As an absolute minimum, he needed to read for himself the written Funding Agreement signed by Mr Wingate on behalf of the firm, and therefore on behalf of himself as one of the two partners in the firm.
119. The tragedy of this case is that if Mr Evans had done so and if he had then tackled Mr Wingate as to the divergence between the terms of the written agreement and the manner in which Mr Wingate was proposing actually to apply the funds, this case might never have arisen.
120. Mr Treverton-Jones submitted that to expect Mr Evans to read the agreement was to expect of a partner in a very small firm a higher standard of diligence than of a partner in a larger one. It may well be that, in a large city firm with many partners, any given partner may reasonably rely upon the negotiating partners to ensure that any borrowing by the firm is wholly regular. So Mr Treverton-Jones suggested that it was unfair, or setting too high a standard, to expect the other partner in a two partner firm to have to do that which a partner in a large firm might not have to do.
121. I understand the submission and I am sympathetic to the apparent lack of fairness, but the two situations are not analogous or comparable. As Mr Coleman submitted, it is unlikely that even in the largest of firms, borrowing on a very large scale (relative to the financial scale of the firm) would be entrusted to a single partner without any oversight by any other partner. If oversight by even one other partner is required, then in this small firm that partner was necessarily Mr Evans.
122. If the tribunal had found Mr Wingate guilty, as they should have done, of a lack of integrity and breaches of Principles 2 and 6 as well as the breach of Principle 6 by his incompetent failure to appreciate the dubious nature of the transaction, then, in my view, any rational tribunal must also have found Mr Evans guilty of incompetence to the extent described.

Ground five

123. This ground applies to both respondents.
124. Allegation 1.4 of the original allegations was that "the First Respondent failed to pay the money identified in allegation 1.1 into client account..." contrary to specified provisions of the Accounts Rules. Allegation 2.2 was an allegation against the Second Respondent, Mr Evans, in the same terms.
125. The argument of the SRA and Mr Coleman, which is repeated by ground five of the amended grounds of appeal, is based upon the terms and language of the written Funding Agreement. If the money was paid by Axiom and received by the firm pursuant to the written terms, then it remained client money and should have been kept in the client account (which it was not) until disbursed in accordance with the terms of the written Funding Agreement.
126. The tribunal rejected this argument at paragraphs 383.5 and 383.6 as follows:

"The Tribunal had not been satisfied that the terms of the Funding Agreement represented the full terms of the agreement between the Firm and Axiom. The Tribunal accepted that the purpose of the funding, as known by Axiom's agents or representatives, was to provide funding which would pay off the HBOS loan and then fund the Firm generally....

383.6. In the circumstances in which the Tribunal accepted that the Firm could use the Axiom funds for general office matters, it could not be satisfied that the Axiom money was client money and/or should have been paid into a designated office account. This allegation had not been proved to the required standard."

127. I reject the argument of Mr Coleman and this ground of appeal for the reasons given by the tribunal.
128. At one stage during his submissions, Mr Coleman submitted that Mr Wingate cannot have his cake and eat it, but this particular ground involves the SRA seeking to have their cake and eat it. They have succeeded on ground one on the basis that the written contract was a sham and that the true contract was the oral contract alleged by Mr Wingate, who was believed by the tribunal. Pursuant to that oral contract, the money did not require to be paid into client account and could, indeed, be paid without impropriety into the firm's general office account, as was done.
129. For this reason, I dismiss the appeal under ground five in relation to allegations 1.4 and 2.2.

Ground six

130. This ground applies to both respondents.
131. Allegations 1.7 and 2.4 of the original allegations allege against each respondent respectively that he:

"failed to run the firm effectively in accordance with proper governance and sound financial and risk management principles, in breach of Principle 8."

132. In order to understand the true thrust of this very generalised allegation, it is necessary to quote from allegations 1.6 and 2.3. These allegations allege that the First and Second Respondents respectively failed to handle client money received in respect of professional disbursements in accordance with specified Accounts Rules, resulting in a cash shortage on client account of £58,786.74, which they respectively failed promptly to remedy. This allegation was admitted by each respondent and was found proved and each respondent was fined £3,000 in respect of it.
133. The facts, which the tribunal had described at paragraphs 81 to 85, were that after the firm had received payment for professional disbursements (such as counsel's fees) they wrote cheques in settlement of those disbursements which were then entered in the accounting records of the firm as having been paid. In fact, the cheques were not promptly sent to the payees, but were retained, sometimes for many months, so that ultimately fresh updated cheques had to be issued. In this way, the firm represented in its books that a payment had been made when, in truth, it had not been. In the meantime, the money was used for the general purposes of the firm.
134. Allegations 1.6 and 2.3 related to professional disbursements and totalled £58,786.74, as stated in the allegation. However, the practice of issuing a cheque, entering it in the books or records as having been paid, but then retaining the cheque, metaphorically or actually, "in a drawer" was more widespread. It was described by the tribunal at paragraph 386.2.4 as follows:

"The Respondents caused or permitted the Firm to adopt the practice described in relation to allegation 1.6 in relation to the use of payments received from defendants in relation to both non-professional disbursements (namely after the event insurance premiums) and professional disbursements. The Firm would write a cheque for payment of the disbursement and make the corresponding office entry on the office side of the client ledger, but would retain the cheque. As at 31 October 2012 the Firm had written a total of 173 cheques on 84 client matters, to the value of £155,878.75 which were not sent to the payee. Some of the payments had been retained in the office account for over 12 months. It was submitted that the Firm's purpose in retaining the cheques was to use the monies received in respect of disbursements to fund the expenses of the Firm."

135. Although they there set out the alleged facts of allegation 1.7, the tribunal appear to have given no reasons at all as to why this particular allegation (which each respondent had admitted) had not been proved against them.
136. The short submission of Mr Coleman under ground six is that the findings of the tribunal in this regard should not be confined to the £58,786.74 which was the subject of allegations 1.6 and 2.3, but should encompass, by findings also under allegations 1.7 and 2.4, the full extent of the practice, namely £155,878.75.
137. Mr Treverton-Jones submits that this ground of appeal is "completely pointless". The respondents have already been fined £3,000 each in relation to the retention of professional disbursement cheques in the sum of £58,786.74, and he appropriately cautions against any double accounting or double penalty.
138. As the full extent of the practice is admitted, and as the greater the scale upon which a malpractice is committed, the more serious it becomes, I should, in my view, allow the appeal under ground six, but the order must be drafted in such a way as to avoid the double accounting against which Mr Treverton-Jones very rightly cautioned me.
139. To retain cheques to the tune of £155,878 is plainly even more serious than to retain them to the tune of £58,786, and I will have to consider this afternoon what additional sanction or substituted sanction should be imposed additional to, or in substitution for, the fines of £3,000 against each respondent which have already been paid. I will take great care not to impose a double penalty; nor will I fall into the crude trap of saying that as the total sum involved is roughly three times greater, so the fines should be three times greater.

Summary of outcome

140. The upshot is that the appeal will be allowed in relation to grounds one, two, four and six.
141. Under ground one, findings must be recorded against Mr Wingate that he lacked integrity and failed to maintain the trust of the public in breach of Principles 2 and 6.
142. Under ground two, a finding must be recorded against Mr Wingate that he demonstrated manifest incompetence in breach of Principle 6.
143. Under ground four, a finding must be recorded against Mr Evans that he demonstrated manifest incompetence in breach of Principle 6.
144. Under ground six, findings must be recorded against both Mr Wingate and Mr Evans that they respectively failed to run the firm effectively and in accordance with proper governance and sound financial and risk management principles in breach of Principle 8.
145. In all other respects, the appeal is dismissed.
146. I will leave it to the two leading counsel to draft appropriate terms of an order to give effect to this judgment and these conclusions. I will now hear (after a break for lunch) submissions from counsel in relation to the sanction for the matters I have now found proved.