John Robert Manning, Malcolm Richard Jones, Stephen Maurice Coupland, Colin Peter Frazer, Philip Leigh Drazen and Ian David Coupland

• Application 10105-2008
• Hearing 30 November, 1, 2 and 3 December 2009
• Reasons 20 May 2010

The SDT ordered that the first respondent (admitted 1972), of Leeds LS17, should be suspended from practice as a solicitor for 12 months to commence on 3 December 2009; that the second respondent (admitted 1982), of Leeds LS18, should be reprimanded; that the third respondent (1985), of Leeds LS24, should pay a fine of £4,000; that the fifth respondent (admitted 1995), of Lupton Fawcett LLP, Yorkshire House, East Parade, Leeds LS1 5BD, should be reprimanded, and that the sixth respondent (admitted 1988), of Lupton Fawcett LLP, Yorkshire House, East Parade, Leeds LS1 5BD, should be reprimanded.

At the commencement of the hearing the applicant had sought leave to withdraw the allegations against the fourth respondent, on the basis that he was 74 years of age and was the most peripheral of the respondents in the conduct complained of. He had agreed to undertake not to apply for a practising certificate and had entered into a regulatory settlement agreement with the Solicitors Regulation Authority. The SRA was satisfied that that was suitable to protect the public interest. The SDT had granted permission to withdraw the allegations.

The first and third respondents had acted contrary to rule 1(a), (c) and (d) of the Solicitors Practice Rules 1990 in that they had acted for more than one party in relation to certain commercial transactions in circumstances of conflict between the interests of the clients involved in such transactions and/or where their interests or the interests of the partners conflicted with the interests of clients. The first, second, third, fifth and sixth respondents had acted in breach of the Solicitors Accounts Rules 1998 in that money had been transferred from one client ledger to another without first obtaining the prior written consent of both clients, contrary to rule 30(1)(a), they had failed appropriately to record dealings with client money, contrary to rule 32(2), and they had facilitated the withdrawal of money from client account contrary to rule 22; they had failed to comply with the Solicitors Publicity Code 1990 in respect of conveyancing services in that the letterheads they had used were inaccurate or misleading, contrary to rule 1(c), and/or they had failed to list the names of all partners in the firm, contrary to rule 1 (d)(ii); contrary to rule 1(c) and (d) of the 1990 rules, and they had misled clients by describing a profit element of telegraphic transfer fees as a disbursement on bills. The first respondent only had, contrary to rule 1 of the 1990 rules, provided misleading information to the Law Society in connection with an investigation, and had provided misleading evidence to the Financial Services and Markets Tribunal; and he had acted in breach of rule 1(a), (d) and (e) of the 1990 rules in that the financial promotions work undertaken by Fox Hayes between February 2003 and June 2004 was in breach of the Conduct of Business Rules.

The second, third, fifth and sixth respondents had acted in breach rule 1(d) and (e) of the 1990 rules in that the financial promotions work undertaken by Fox Hayes between February 2003 and June 2004 was in breach of the COB Rules. The SDT was of the view that matters relating to the financial promotions work had been adequately dealt with proceedings brought by the Financial Services Authority and that the respondents should not be punished twice for that conduct. However, the SDT did take particularly seriously the rules relating to conflict of interest and, in the case of the first respondent, the lack of integrity he had shown in relation to the sixth allegation. Furthermore, there had been regulatory breaches of rules which were there to protect the public, particularly the Solicitors Accounts Rules 1998, which were in place to safeguard client funds. As a result of the breaches, the reputation of the profession had been damaged, clients had been placed at risk and had suffered financially. Having taken into account the fact that the respondents had already been punished elsewhere for the breaches committed under the COB Rules, and taking into account the respondents’ personal circumstances, references and mitigation the SDT had reached the following decisions.

The SDT considered the appropriate sanction was to reprimand the fifth and sixth respondents because they had suffered a great deal already. As a result of the FSA proceedings they had suffered financial devastation. The references provided by them in mitigation of penalty were exceptional. The third respondent’s position was slightly different in that he had been involved in the conflicts of interest breach and that was a very serious allegation, made even more so by the fact that he had personally gained a profit as a result. He had not been solely motivated by acting in his clients’ best interests as he had submitted to the SDT and the SDT noted that when interviewed by the IO about the agreement, he had commented ‘It looked like a good deal’. He had also agreed with the IO that he had recognised that it was a good opportunity to make some money and had then offered it to his mother-in-law and stepmother-in-law. In the circumstances, the SDT considered the appropriate sanction was to fine him £4,000.

The SDT had been impressed by the second respondent and the evidence he had given on oath. He had done his best in the circumstances and had genuinely believed he was doing the right thing. He had relied on the first respondent as a senior partner and had not been involved with the management board in any way. The SDT was satisfied that the second respondent was not a risk to the public and had decided the appropriate sanction was to reprimand him, particularly in view of the fact that he had already been punished for the sixth allegation as a result of the FSA proceedings. The first respondent was in a much more serious position than the other respondents. He had been acting as a solicitor and as a businessman but had not clearly distinguished one role from the other. He had been at the heart of all the conflict of interest situations. He had made misrepresentations to the SRA/FSM Tribunal and the SDT had found that he had shown a lack of integrity. It was a serious matter and his conduct had caused a great deal of damage to both the reputation of the profession and to him and his fellow colleagues. It was quite clear to the SDT from the evidence of the other respondents that had they been aware of the commissions received by the first respondent, the financial promotions work might not have been undertaken by the firm. As a result the SDT considered that the first respondent had to face a more severe penalty than the other respondents. The respondents were ordered to pay costs to be assessed if not agreed in the following proportions: the first respondent 50%; the second respondent 15%; the third respondent 15%; the fifth respondent 10%; and the sixth respondent 10%, payment of such costs not to be enforced without leave of the SDT.