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

Having considered carefully the submissions made by Mr Cottam I am satisfied that his appeal against the decision of the Tribunal must be dismissed. My reasons for so deciding are as follows.

As set out above, this court will be slow to intervene in findings of fact made by the Tribunal. The Tribunal in this case heard the evidence of Mr Cottam and was best placed to judge his credibility and reliability when he gave evidence and was cross-examined. In setting out its analysis of the evidence and its decision, the authorities make clear that it is not reasonable to expect a tribunal to elaborate on its reasoning in the way courts and professional judges may frequently be expected to do. However, in this case, the Tribunal delivered a comprehensive and closely reasoned decision. Within this context, and notwithstanding Mr Cottam’s written and oral submissions and his detailed critique of the decision of the Tribunal, it is not possible in this case to identify "a critical finding of fact which has no basis in the evidence, or a demonstrable misunderstanding of relevant evidence, or a demonstrable failure to consider relevant evidence” (Martin v Solicitors Regulation Authority at [32]). I am further satisfied that, this is not a case in which the findings made by the Tribunal "cannot reasonably be explained or justified" (Henderson v Foxworth Investments Ltd at [67]).

With respect to the wider context in which Mr Cottam advanced his grounds of appeal, Mr Cottam did not dispute the transfers in question were improper. There was no dispute that Mr Cottam was the sole director, as well as the COLP and COFA of the Firm. Mr Cottam did not dispute the analysis of the Tribunal that he had therefore allowed the improper transfers in the sense that he was responsible for them by reason of his role within the Firm.

Mr Cottam contended before the Tribunal that he was not able to function at the relevant time, such that he could not have caused the transfers to take place. However, this was rejected by the Tribunal. The Tribunal cited and carefully analysed the medical evidence before the Tribunal, noting that there was no contemporaneous medical evidence of mental health prior to December 2019, that the medical evidence therefore postdated period in question, that the descriptions of his mental health in 2016-2018 comprised self-reporting by Mr Cottam and that Mr Cottam worked throughout the relevant period. In these circumstances, it was plainly reasonable for the Tribunal to conclude that there was no evidence that Mr Cottam was unable to function during period of the improper transfers and to conclude therefore that a lack of ability to function was not the reason those transfers took place.

Finally with respect to the wider context in which the appeal is advanced, the Tribunal had the benefit of an interview of Mr Cottam, carried out by the FIO, in which Mr Cottam made the following admission in the context of the disruption caused by the first and its impact on cashflow:

“I deducted client funds inappropriately on client name. I know of no other matters as far as I’m aware of substance. I accept that it was inappropriate. I accepted I was in breach, it was in basic breach of the client account rules”.

In addition, the following exchanges took place between Mr Cottam and the FIO during his interview and which the Tribunal were entitled to, and did, take into account:

“A: The invoices were clearly inappropriate to have rendered in the first place, they serve no use whatsoever, they were clearly inappropriate, they shouldn’t have been raised.

Q: Do you accept that you are not entitled to deal with all the amounts that you did?

A: Yeah.

Q: And transfer from client to office bank account?

A: I did.

Q: Do you consider your conduct regarding the transfers was dishonest?

A: I don’t accept it was dishonest, I accept it was inappropriate, I accepted it fell far below the standard one would expect of a solicitor.”

And:

“Q: Why did you create the bills and transfer the money from client to office bank account?

A: Because, effectively, it was simply a way of raising money to, to pay the bills, to keep the practice going. Otherwise, I would have had to put the company into liquidation.”

And:

“Q: You accept the transfers to be in breach, not only of the rules, but then the principles?

A: Yeah, yes and yes.”

Turning to the individual grounds advanced by Mr Cottam, having regard to the evidence before the Tribunal, and its decision, I am not able to accept that the Tribunal failed to correctly summarise Mr Cottam’s witness evidence at paragraph 33.11 of the judgment when stating Mr Cottam had “accepted that he had signed the lists of transfers, including improper transfers, written out by TN”.

The court has before it a transcript of Mr Cottam’s evidence. It is clear from that transcript (as he must have known when pleading his grounds of appeal) that Mr Cottam gave detailed evidence on this point. In addition to conceding earlier in cross examination that he had signed the reconciliations at the end of the year as a record keeping exercise, he admitted in cross examination that as the fee earner and the person dealing with the file he had to authorise payments and would do so by way of colour coded slips for transfers, that he had located two transfers that he had signed for, and stated that there were “very probably others, quite a few others” he would have been asked to sign for and went on to state as follows with respect to his signing of the transfers, including the transfers in issue:

“...it had always been the case that transfers, from client to office, were supposed to be signed off by, by me, and that has always been the case. My old cashier used to regularly come in and get me to sign transfers, when she made transfers from client to office, she would get me to sign. These, these aren’t reconciliations, these are transfers, and I would, I would sign them.”

And:

“...what I do recall, is those that I did sign, which I’ve, I’ve shown you, which I could identify in the paperwork provided from the investigation report, those that I did sign, I have no reason to believe that, I had no reason to believe at the time, were anything other than genuine monies that were due from the client to the office.”

I likewise reject Mr Cottam’s contention that the Tribunal failed to correctly summarise Mr Cottam’s witness evidence at paragraph 35.15 of the judgment when stating Mr Cottam “was, on his own evidence, more involved in the finances after 2015” and in finding that “It was implausible that he had not properly looked at the ledgers or reconciliations for such an extended period of time.”

As I have noted, Mr Cottam did not dispute the transfers in question were improper. There was no dispute that Mr Cottam was the sole director, as well as the COLP and COFA of the Firm. He was, in this context, at pains to emphasise at several points during his evidence that he considered that he had ultimate responsibility for matters that took place in the Firm. Within this context, and as set out in the foregoing paragraphs, Mr Cottam conceded in cross-examination that he had signed the reconciliations at the end of the year as a record keeping exercise and he had, as the fee earner and the person dealing with the file, to authorise payments and would do so by way of colour coded slips for transfers. It is equally plain from the transcript of Mr Cottam’s evidence that, following the fire in 2015, he had had to engage in extensive negotiations with his bank as a result of the cash flow difficulties created by the fire. Within this context, it was plainly reasonable for the Tribunal to conclude that the fire, and its devastating effect, required him to become more involved with the finances and that, in this context, it was implausible that he had not properly looked at the ledgers or reconciliations for the extended period he claimed.

With respect to the ground of appeal alleging that the Tribunal failed to mention, in reference to the absence of reporting to the SRA and retention of TN, that Mr Cottam had put the freehold property from which Cottam Solicitors Limited operated on the market for sale from May 2018, when he discovered the shortfalls, this assertion is again surprising having regard to the transcript and decision and once again is a ground that falls to be rejected.

As I have noted, the Tribunal made clear at the outset of its judgment that it had read all of the documents in the case and made notes of the oral evidence of all witnesses and that the absence of any reference to particular evidence should not be taken as an indication that the Tribunal did not read, hear or consider that evidence. As confirmed in Beresford v Solicitors Regulation Authority [2009] EWHC 3155 (Admin) at [43], this court can approach the appeal on the basis that the findings of fact in relation to each allegation necessarily relate back to the evidence and submissions which the Tribunal has set out. Within this context, the Tribunal recounted at paragraph 33.6 of its decision that:

“Mr Cottam told the Tribunal that he had believed at the time he could rectify the problem by selling the premises, which he put on the market in May 2018. Events had, however, overtake him and the intervention in October 2018 led to his bankruptcy.”

The foregoing observation was made in the context of Mr Cottam having stated in terms, during cross examination, that he had placed the property on the market to deal with the shortfall. It is further clear that, during his closing submissions, Mr Cottam’s counsel “reminded the Tribunal that Mr Cottam had tried to sell the premises to make good the shortfall on the client account”.

With respect to the grounds of appeal addressing the manner in which the Tribunal dealt with the contents of Mr Cottam’s interview by the FIO, these grounds likewise cannot succeed and fall to be dealt with together. I am not able to agree that the Tribunal erred in finding that had Mr Cottam been talking of the firm as a whole in his interview with the SRA investigator, rather than him personally, he would have mentioned TN as on his case she had a central role in what had taken place. Nor am I able to agree that the Tribunal erred in finding that Mr Cottam had sought to rely on some parts of his interview with the SRA investigator but not others without identifying which parts these were or that the Tribunal erred in finding that Mr Cottam had given a truthful and accurate account in that interview inconsistent with the finding in relation to Allegation 1.2.

Whilst Mr Cottam tried to resile from the account he gave the FIO in interview on the grounds he had not been fit to be interviewed at that time, there was plainly no merit in that argument. Mr Cassini was not cross-examined on Mr Cottam’s assertion that it should have been obvious that he was not fit to be interviewed. Mr Cottam conceded before the Tribunal that he had told Mr Cassini that he was fit and well to be interviewed and that he did not have any medical conditions. He further admitted he was capable of declining to be interviewed, but did not do so. In cross-examination, Mr Cottam accepted that he sounded very calm in the interview, that he had answered some questions in detail and accurately. He further conceded that none of the medical evidence stated he was not fit to be interviewed and that it did not cover the period of the interview. Having regard to these matters, the Tribunal was entitled to reject Mr Cottam’s contention that he had been emotional and had not been thinking about his answers whilst he was being interviewed.

In this context, the acceptance by Mr Cottam that he made the transfers in question came not in response to a question or at the end of a long interview, but in an introductory statement given by Mr Cottam at the outset of the interview. At no point in the interview did Mr Cottam seek to qualify or clarify that statement. In particular, at no point did he attempt to ascribe the admission to the Firm or a member of staff at the firm rather than to himself personally, nor did he do so when telling the FIO that he was the only person who could authorise the transfers. It is clear from the transcript that Mr Cottam made no mention of the alleged role of TN in his interview and he conceded in cross-examination that he had not mentioned TN’s alleged role until October 2019, after he had received a letter from the SRA making it clear that he was likely to face allegations before the Tribunal. Finally, before the Tribunal, Mr Cottam sought to resile from the clear answers he gave in his interview (a position that his own counsel was forced to concede was “unattractive” during closing submissions).

In the foregoing circumstances, I am satisfied that it was perfectly reasonable for the Tribunal to conclude on the evidence before it that had Mr Cottam been talking of the firm as a whole in his interview with the SRA investigator rather than himself, he would have mentioned TN, that Mr Cottam had sought to rely on some parts of his interview with the SRA investigator but not others and that Mr Cottam had given a truthful and accurate account in that interview. There is no inconsistency between the latter finding and the Tribunal’s decision on Allegation 1.2.

I am likewise satisfied that it cannot be said that the Tribunal erred in finding that there was no plausible reason for TN to have decided to move significant sums of money out of the client account whilst keeping Mr Cottam in the dark about it. Mr Cottam’s case before the Tribunal in this regard was simply unsustainable having regard to the evidence before the Tribunal.

The Tribunal was plainly entitled to reject the contention that, as a paid member of staff, TN was not the ultimate beneficiary of the firms income to the extent that she would be motivated to act dishonestly in order to protect her livelihood. Mr Cottam conceded before the Tribunal that, on discovering the transfers in May 2018, he had not suspended or dismissed TN, who was still working at the Firm in 2018, even though he claimed she was responsible. Mr Cottam further conceded in cross examination that all false invoices contained his initials, that not all of them bore TN’s initials and none of them bear the initials of any other fee earner and he conceded that he had signed the list of transfers, including the improper transfers, written out by TN. Whilst Mr Cottam had sought to suggest that TN had confessed her conduct to him, he was forced to concede that there was no evidence that she had done so, whether by way of emails or notes of a meeting, and he conceded that as a result of his failure to mention TN in interview the SRA investigation did not take that line of enquiry. As I have noted, Mr Cottam further conceded in cross examination that the first time he accused TN was in letter to SRA in October 2019 advising that it was likely that allegations would be pursued before the Tribunal.

In the foregoing circumstances, it was plainly reasonable for the Tribunal to conclude on the evidence before it that there was no plausible reason for TN to have decided to move significant sums out of the client account whilst keeping Mr Cottam in the dark about her conduct. It was likewise reasonable for the Tribunal to conclude that the absence of a report to the SRA regarding TN’s alleged conduct, and the retention of TN after the fact, was more consistent with Mr Cottam having known about the transfers and having authorised them than it was with him being unaware of them until May 2018.

Having regard to the matters set out above, I am likewise satisfied that the remaining grounds of appeal relied on by Mr Cottam cannot succeed.

With respect to Mr Cottam’s contention that the Tribunal erred in finding that Mr Cottam was aware that the transfers were taking place and that they were improper and “ignored completely Mr Cottam’s very detailed evidence in his Answer and statements to the contrary”, that evidence fell to be evaluated in the context of the totality of the evidence before the Tribunal, which included the clear concessions made by Mr Cottam in interview and in cross-examination as detailed in this judgment. Having regard to those admissions, and the wider evidence before the Tribunal, it cannot seriously be argued that it was unreasonable for the Tribunal to conclude that Mr Cottam was aware of the improper transfers and, by allowing them to continue, caused the transfers to occur. With respect to Mr Cottam’s assertion that the Tribunal erred in finding that the transfers could not happen without Mr Cottam’s knowledge, despite evidence that the internet banking system was vulnerable to a trusted employee abusing it, there was no cogent evidence placed before the Tribunal to demonstrate this alleged vulnerability, whether by way of expert evidence or evidence of specific incidents where the banking system had been exploited. With respect to Mr Cottam’s assertion that the Tribunal erred in finding that Mr Cottam had not made an admission to creating the invoices in his interview with the SRA investigator, it is clear from the passage cited above that whilst Mr Cottam did not appear to dispute the authorship of the invoices, he made no admission in this regard. Finally, I am not satisfied that it can be said that the Tribunal failed to evaluate Mr Cottam’s re-examination on parts of his interview with the SRA investigator when he stated, “I was made aware by my cashier of the shortfall”. Mr Cottam did not himself explain the significance of this fact. Rather, its significance was suggested to him by a question from his own counsel, namely why would he have need to have been made aware of the shortfall if he was responsible. It was reasonable in circumstances for the Tribunal not to attach any weight to that answer, led as it was from Mr Cottam by his counsel for the first time in re-examination.

In the event that the court dismisses, as it must do, Mr Cottam’s appeal on the facts, he pursues no appeal against the sanction imposed on him. As I have noted, Mr Cottam accepted that a finding of dishonesty would result in his removal from the Roll. In circumstances where Mr Cottam’s appeal fails for the reasons I have given, the finding of dishonesty stands.