AC-2024-LON-000040 - [2025] EWHC 1965 (Admin)

By allegation 1.1, Mr Cottam was alleged, between May 2016 and May 2018, to have caused or allowed improper transfers of monies from the client account to the office accounts, as set out in Schedule 1 to the Rule 12 statement, and in doing so he breached Rule 20.1 of the SRA Accounts Rules 2011 and Principles 2, 4, 6, and 10 of the SRA Principles 2011. With respect to the transfers themselves, Mr Cottam accepted that they were improper. The Tribunal was satisfied that Mr Cottam allowed the transfers to take place in that he was responsible for them given his role in the firm. The Tribunal was further satisfied that Mr Cottam caused the transfers to take place.

In reaching this decision, the Tribunal considered the medical evidence relied on by Mr Cottam to suggest that he was not able to function to the extent he could have, causing the transfers to take place. However, noting that the medical evidence concerning Mr Cottam’s mental health postdated the periods during which the relevant transfers had taken place and the fact that Mr Cottam continued to work throughout the relevant period, the Tribunal was satisfied that, whilst the 2015 fire had had a devastating effect on him and acted to impair his judgment, there was no evidence to suggest he was unable to function.

In determining whether Mr Cottam had caused the transfers to take place, the Tribunal also gave careful consideration to Mr Cottam’s assertion that his cashier, referred to in the decision as TN, had caused the transfers to take place without his knowledge. To this end the Tribunal observed that Mr Cottam had not reported TN’s alleged conduct to the SRA once he had become aware of the transfers, nor taken the “obvious step” of suspending or dismissing TN in circumstances where, as he alleged, she was responsible for the improper transfers. The Tribunal further relied on the fact that in his interview with Mr Cassini on 2 October 2018, Mr Cottam had admitted to making the transfers and had not mentioned the alleged role of TN until a year later, noting that Mr Cottam had given clear and detailed answers to many of the questions and being satisfied that he had given a truthful and accurate account in that interview. Within the foregoing circumstances, the Tribunal concluded that Mr Cottam had given no plausible reason for TN to have decided to move significant sums of money out of the client account and not inform Mr Cottam.

Within the foregoing context, the Tribunal concluded as follows with respect to Allegation 1.1 against Mr Cottam:

“35.20…Taking all the evidence into account, the Tribunal found that Mr Cottam was at the very least aware of the improper transfer taking place and that, by allowing them to continue, he had caused those transfers to occur. The Tribunal therefore found the factual basis of Allegations 1.1 proved on the balance of probabilities.

35.21

It followed as a matter of logic from that finding that the breaches of Principles 4, 6 and 10 and the breach of Rule 20.1 of the SAR were also proved on the balance of probabilities, having regard to the vital importance of protecting client monies and the consequent impact on trust in the profession when this did not happen.”

The Tribunal went on to consider the issue of whether Mr Cottam lacked integrity. In doing so, the Tribunal applied the test set out in Wingate and Evans v SRA; SRA v Mailns [2018] EWCA Civ 366, [2018] 1 WLR 3969. Having regard to the medical evidence relied on by Mr Cottam, the Tribunal concluded that that evidence, taken at its highest, did not suggest that Mr Cottam was not responsible for his actions. Within the context of the standards of the profession being clear about how client’s money should be handled, the Tribunal was satisfied, on the balance of probabilities, that Mr Cottam lacked integrity.

Finally with respect to Allegation 1.1, the Tribunal considered the issue of dishonesty. In doing so, the Tribunal applied the test set out in Ivey v Genting Casinos (UK) Ltd t/a Crockfords [2017] UKSC 67, [2018] AC 391. Applying that test, the Tribunal was satisfied that, with respect to his state of knowledge, Mr Cottam was aware of the severe financial difficulties brought about by the arson attack, aware there was a cashflow issue and that paying bills and overheads was challenging, aware of the SRA rules and his responsibilities to ensure they are complied with and that he understood the financial and accounting procedures of the firm. Within the context of that state of knowledge, the Tribunal concluded as follows with respect to the question of dishonesty:

“32.28

The Tribunal was satisfied on the balance of probabilities that causing those transfers to take place would be considered dishonest by the standards of ordinary decent people on the basis that he had used client monies to bolster the financial position of the Firm. The Tribunal therefore found the allegation of dishonesty proved in relation to Allegation 1.1.”