A former TV mogul with mining interests in Africa agreed to pay a former City solicitor £500,000 for 'defamation' even though he was not aware of having made any defamatory statement, the Solicitors Disciplinary Tribunal has heard.

According to the Solicitors Regulation Authority (SRA), the sum that businessman Steven Cosser agreed to pay solicitor Alexis Maitland Hudson was 'twice as large as in the most grave cases of libel'. The payment formed part of a settlement agreement between Cosser and Maitland Hudson, the tribunal heard.

Details of the payment emerged in a three-week hearing into SRA allegations that Maitland Hudson acted where there was a conflict of interest and mislead the regulator. Maitland Hudson, formerly owner of the now dissolved Maitland Hudson & Co, denies all charges.

Cosser, who the tribunal heard now lives on a disability pension and in a council flat after falling from a position of 'some wealth', gave evidence on Friday in support of Maitland Hudson. 

The SRA said a settlement agreement between Cosser and a company controlled by Maitland Hudson was 'disadvantageous to Cosser' and was executed without his solicitors and only in the presence of his carer. Cosser told the tribunal he was not aware that he had defamed Maitland Hudson but that he would 'never have allowed anything to be put into a document that he did not agree with'.

SRA counsel Mark Cunningham said: ‘Did Maitland Hudson tell you what the going rate for defamation is? It appears what you are alleged to have said was so grave that it was two times worse than the worst possible case of libel. Yet you say you did not think you had defamed him at all. Had you been properly briefed you might be £500,000 better off.'

The SRA's case is that Cosser approached Maitland Hudson for help brokering short term loans after he fell on difficult times.

The SRA said that the loans, and the subsequent settlement agreement, were ‘disadvantageous to Cosser and advantageous to Elite Partners Limited (EPL)’ – a British Virgin Islands incorporated company which the SRA alleges is the ‘alter-ego’ of Maitland Hudson.

The SRA also said on Friday that Cosser had agreed to a witness statement which Maitland Hudson drafted ‘for his own personal gain’. Cunningham said the witness statement includes ’technical words and phrases… that you would not expect to find in a document from someone who is not legally trained', including references to 'joint defence privilege'.  

Addressing Cosser, Cunningham said: ‘We suspect that much of your witness statement was drafted by [Maitland Hudson].’  Cosser added that he had sufficient information before signing both the settlement agreement and witness statement and that he would have questioned anything he did not understand. Cosser had never known Maitland Hudson to be 'vindictive, or cruel'.

Earlier in the proceedings, Cunningham said the Re-group trust – under which EPL sits – was a ‘cobweb of companies’ the purpose of which was ‘opacity’. He added: ‘You are the entities in the re-group trust. You can tell them what to do and use them as a piggy bank.’

The hearing, which is listed to run for three weeks, continues.