Bryant & Anor v The Law Society, Court of Appeal - Administrative Court, December 21, 2007, [2007] EWHC 3043 (Admin)

Resolution Date:December 21, 2007
Issuing Organization:Administrative Court
Actores:Bryant & Anor v The Law Society
 
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Neutral Citation Number: [2007] EWHC 3043 (Admin)

Case No: CO/786/2007

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

ADMINISTRATIVE COURT

DIVISIONAL COURT

Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 21/12/2007

Before :

LORD JUSTICE RICHARDS

and

MR JUSTICE AIKENS

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Between :

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(Transcript of the Handed Down Judgment of

WordWave International Limited

A Merrill Communications Company

190 Fleet Street, London EC4A 2AG

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Official Shorthand Writers to the Court)

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Mr Gregory Treverton-Jones QC (instructed by Radcliffes Le Brasseur) for the Appellants

Mr Geoffrey Williams QC and Mr Jonathan Goodwin (instructed by Messrs Lonsdales of Preston) for the Respondent

Hearing dates: 11-12 October 2007

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JudgmentLord Justice Richards :

  1. This is the judgment of the court, to which both members have contributed, in respect of appeals brought by Mr Hugh Bryant and Mr Reginald Bench against a decision of the Solicitors' Disciplinary Tribunal. Mr Bryant, who is 56 years of age, had been a solicitor since 1984. Mr Bench, who is 67 years of age, was formerly a legal executive but was admitted as a solicitor in 2001. The disciplinary proceedings related to a period between September 2002 and December 2004 when the appellants were practising in partnership together in London under the style of Bryant Hamilton & Co. They faced seven charges of professional misconduct, which the tribunal found largely substantiated. The tribunal also made a finding of dishonesty in respect of Mr Bryant and ordered him to be struck off the Roll of Solicitors. It found Mr Bench's involvement in the relevant transactions to have been much more limited and not to have been dishonest. The tribunal ordered him to be suspended from practice as a solicitor for three years. Appeals are now brought against the findings of dishonesty and misconduct and also against the sentences imposed.

  2. The case is one of considerable factual complexity, as well as raising an important issue concerning the legal test for a finding of dishonesty in disciplinary proceedings.

    Outline: charges, findings and scope of appeal

  3. The allegations against the appellants were that they had been guilty of conduct unbefitting a solicitor in each or any of the following circumstances, namely that:

    ``1. [They] acted for and continued to act for clients who were involved in dubious or fraudulent transactions that bore the hallmarks of fraudulent investment schemes, notwithstanding:-

    1.1 their familiarity with The Law Society's Yellow Card Warning on bank instrument fraud;

    1.2 their familiarity with The Law Society's Blue Cards on money laundering;

    1.3 their knowledge that some of the transaction documents were forgeries;

    1.4 they had been notified that Harry Alonso, who referred many of the transactions to them, had been convicted in the United States of America for his role in a money laundering and investment scam that defrauded victims;

    1.5 their experience;

    1.6 the fact that each transaction was unusual and not one in which a solicitor should properly involve himself.

    and, therefore, by virtue of 1.1 to 1.6 above their involvement in such transactions was both as knowing participants and dishonest.

  4. [They] failed to take adequate and reasonable steps to protect funds held on behalf of third parties and in doing so acted dishonestly.

  5. [They] deducted money from funds provided by third parties without authority, namely, funds provided on behalf of Rose Excalibur, Mermaid, Execo SA, United Trucking and Both Feet Films; and provided them on their client's instruction to other third parties for example, Oxford Financial Group, FFC Capital Investment Agency, The Peoples Trade Indemnity and DBKN.

  6. [Mr Bryant] breached an undertaking by failing to hold third party funds to their order after he agreed to do so and after promising the third parties' solicitor he `would give him prior warning if we were asked to pay the money to anyone other than their clients', which he also failed to do.

  7. [They] separately or together misled or attempted to mislead third parties including a Law Society Investigation Officer by: -

    5.1 sending an e-mail on 17th August 2003 in the Rose Excalibur Transaction to a third party Mr VL stating `... we have heard nothing from MM themselves ...' when that was not the case;

    5.2 sending an e-mail on 13th November 2003 to a third party's solicitor implying that the third party's solicitor's client's money remained in client account when it did not;

    5.3 failing to deliver up complete files of papers when required to do so pursuant to Section 44B of the Solicitors Act 1974 (as amended).

  8. Contrary to Rule 32(2)(b) of the Solicitors Accounts Rules 1998, [they] failed to record funds received from third parties onto individual accounts in the client ledger.

  9. Contrary to Rule 22 Solicitors Accounts Rules 1998, [they] withdrew monies out of client accounts for their costs otherwise than as permitted.''

  10. The tribunal found allegation 1 substantiated, subject to the issue of dishonesty which it dealt with separately. It considered allegations 2 and 3 together and found them substantiated, again subject to separate consideration of dishonesty. It found allegation 4 substantiated. It found allegations 5.1 and 5.2 substantiated against Mr Bryant but not against Mr Bench. It did not find allegation 5.3 substantiated against either appellant. It found allegations 6 and 7 substantiated against both appellants.

  11. The tribunal then turned to the issue of dishonesty and, as we have said, found Mr Bryant but not Mr Bench to have been dishonest.

  12. Having reached its decision in relation to the allegations, the tribunal considered the character references put forward in support of the appellants, and also the submissions in mitigation, before making the orders striking off Mr Bryant and suspending Mr Bench.

  13. Mr Bryant appeals against all the tribunal's findings against him with the exception of the finding in relation to allegation 5.1. Mr Bench appeals against all the findings against him. Each of them appeals against sentence.

    The facts: introduction

  14. Regrettably, it is impossible to understand some of the issues in this case without a detailed examination of the relevant facts, the documents and the history of the matter leading up to the hearing before the tribunal. We propose to set out here the central facts which formed the basis of the allegations and which led the tribunal to its conclusions. Later in this judgment, when we consider both appellants' cases against the findings of the tribunal, we will have to consider in further detail particular facts and documents,

    The appellants

  15. Between 1984 and 1990 Mr Bryant worked for two insurance companies, London & Liverpool P&I Management Limited and Shoreline Management (Bermuda) Limited. In the first company, whose business is the protection and indemnity insurance of shipowners and others, Mr Bryant was Chief Underwriter. In the second he also worked in the field of marine insurance. He was an executive director of both companies. In 1990 Mr Bryant left London & Liverpool P&I Management Limited and joined Holman, Fenwick & Willan, the well known firm of City Solicitors which specialises in maritime and insurance law. He was an assistant solicitor there. Subsequently he became a partner of five firms: Waltons & Morse, Penningtons, Williamson & Horrocks, his own firm, Bryant Hamilton & Co, and then Shadbolt & Co, before reforming Bryant Hamilton & Co in September 2002. In all of these firms Mr Bryant practised as a shipping, aviation and insurance lawyer. He was therefore no stranger to international commerce and insurance and he would have been well aware of the need to be careful about possible fraudsters and their schemes.

  16. Mr Bench had formerly been a legal executive. He met Mr Bryant when they both worked at Holman, Fenwick & Willan. Mr Bench has worked continuously with Mr Bryant since 1990 in a number of different firms. Mr Bench was admitted as a solicitor in 2001.

    The appellants' experience with ``credit guarantee insurance'' or ``financial guarantee insurance''

  17. Mr Bryant's work whilst a partner at Penningtons included a project to find a solution to the problem that ship owners were required to provide financial guarantees, or ``certificates of financial responsibility'', under the United States' Oil Pollution Act of 1990. Mr Bryant's solution was in the form of insurance, through the vehicle of a company called Shoreline Mutual. Mr Bench assisted in this work. Between 1993 and 1999, Mr Bryant and Mr Bench worked on various project finance transactions for two airlines. Security for the finance was provided by ``financial guarantee insurance'' through an insurance company. When they were partners in Bryant Hamilton & Co, Mr Bryant and Mr Bench worked on project finance for Caspian Energy. The proposal there was to use financial guarantees given by an insurance company to facilitate the provision of mezzanine finance for an oilfield development project. Mr Bryant's evidence to the tribunal was that this type of insurance is known as ``Alternative Risk Transfer'' insurance, or ``ART'' insurance. It appears to be a variation on credit guarantee insurance, which is also known as ``guarantee insurance'' or ``financial guarantee insurance''.

    The contact with Mr Alonso and Northgate International Corporation

  18. Mr Harry Alonso was, at the relevant times, the Chief Executive of Northgate International Corporation (``NIC''). That is a British Virgin Islands company. Mr Bryant had acted for NIC and Mr Alonso since 1996 or 1997. They had remained clients of Mr Bryant when he moved firms. NIC and Mr Alonso continued to be clients from 1st September 2002...

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