Mr Mark Lorrell v Solicitors Regulation Authority
| Jurisdiction | England & Wales |
| Judge | Mr Justice Martin Spencer |
| Judgment Date | 16 April 2019 |
| Neutral Citation | [2019] EWHC 981 (Admin) |
| Court | Queen's Bench Division (Administrative Court) |
| Docket Number | Case No: CO/4230/2018 |
| Date | 16 April 2019 |
[2019] EWHC 981 (Admin)
Mr Justice Martin Spencer
Case No: CO/4230/2018
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Richard O'Sullivan (direct access counsel) for the Appellant
Mr David Collins (instructed by Capsticks Solicitors LLP) for the Respondent
Hearing dates: 4 th April 2019
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Introduction
The Appellant, Mark Lorrell, appeals against the Order of the Solicitors Disciplinary Tribunal (“SDT”) dated 5 July 2018 whereby it ordered that he be struck off and pay costs of £35,700. There are five grounds of appeal: grounds 1 and 2 relate to sanction and grounds 3, 4 and 5 relate to the findings of misconduct. The time for appeal expired on 3 October 2018 but the application to appeal was not made until 24 October 2018, some 21 days out of time. There is accordingly an application for an extension of time.
The background facts
The Appellant, who was called to the Bar in November 1999, was admitted to the Roll of Solicitors on 1 August 2003 and in due course practised as managing partner of the firm Lorrells LLP from premises at 25 Ely Place, London EC1. That firm was eventually wound-up by way of a creditors' voluntary liquidation on 9 September 2015. For the purposes of this judgment, where I refer to the Appellant, that is also to be taken as a reference to the firm.
In August 2011 the Appellant was instructed by a Ms Amanda Clutterbuck in relation to proposed litigation arising from property dealings in London. The proposed defendants were a Ms Sara Al-Amoudi and Mr Elliott Nichol (deceased). On 5 August 2011 the Appellant sent to Ms Clutterbuck a “client care letter” which set out the scope of the instructions as follows:
“You have instructed me to firstly review your claim and assume conduct of your claim against Miss Sara Al-Amoudi in place of your current solicitors, Jeffrey Green Russell, and to prepare and issue your claim against Mr Elliott Nichol's estate as well as investigate any claims that you may have against any other parties. If, after having considered your evidence, we offer to act for you under a CFA, the terms of which are attached hereto, and you do not instruct us and enter a CFA with us, then we are entitled to charge you for the work we have undertaken in assessing your claim at the hourly rate set out herein. We have also agreed to consider with a view to acting for you, any other claims that you may have against any other parties in respect of the losses you have suffered as a result of the defendant's and Mr Nichol's actions.”
The letter also includes a section headed “Initial action” which states as follows:
“In the first instance we will review the documents you have provided with a view to taking over conduct of your claim against Miss Al-Amoudi in the High Court and bringing your claim against Mr Nichol's estate as set out in the Letter of Claim dated 22 April 2011. To advise you and investigate the costs of an ATE policy and the possibility of a funder funding your claim.”
Thus, as was submitted by Mr Collins for the Respondent and as I find, advice in relation to the funding of the litigation formed an express part of the Appellant's retainer. In any event, where a solicitor accepts instructions in relation to litigation, advice in relation to funding is an implied part of the retainer.
On 6 October 2011, Ms Clutterbuck entered into two Conditional Fee Agreements (“CFA”) with the Appellant which, at paragraph 13.2, included the following clause:
“Lorrell's responsibilities include always acting in the client's best interests, subject to Lorrell's overriding duty to the court, explaining to the client the risks and benefits of taking legal action, giving the client the best information possible about the likely costs of the claim and the different methods of funding those costs.”
At paragraph 66.42 of its determination, the SDT found that the matter of funding was clearly integral with the Appellant's duty to Ms Clutterbuck and, again, on the basis of the CFA and the general duties of solicitors, I agree with this finding.
Over the next few months, it became necessary for Ms Clutterbuck to secure funding for the litigation and in May 2012 the Appellant introduced her to an existing client of his, Shoprite Limited, with a view to arranging funding. Following an initial meeting, Ms Clutterbuck agreed to take a loan from Shoprite Limited (“Shoprite”) of £300,000 to be secured against shares that she owned in a Jersey registered company, Kiloran Properties Limited (“Kiloran”), which had a net value of approximately £1.3 million. There were two separate elements to the transaction: first the loan agreement between Shoprite Limited and Ms Clutterbuck; secondly the execution of the security by Kiloran Properties Limited. Both elements needed to be completed for the transaction to proceed.
The loan agreement is at pages 87–90 of the appeal bundle and records that Shoprite had agreed to lend Ms Clutterbuck the sum of £300,000 to be secured by a first priority security interest in her shares in Kiloran. In consideration of Shoprite agreeing to the immediate release of the loan, Ms Clutterbuck undertook on demand “To execute and to procure the execution by the nominees of the security interest agreement and to execute and to do and to procure the execution and doing by the nominees of all such deeds documents matters and things as Shoprite shall require in order to perfect its title to the shares in accordance with the terms of the security interest agreement.” Clause 4 of the agreement contains certain acknowledgements and agreements by Ms Clutterbuck including the following:
“4.2 That Shoprite may deduct from the loan its legal costs and an arrangement fee of £9,000 and that payment of the loan to Lorrells LLP to be applied by them in or towards satisfaction of costs owing by her to Lorrells shall be a good and sufficient discharge to Shoprite.
4.3 To the release and payment of the loan to Lorrells LLP and to the application of the balance of the loan in or towards satisfaction of costs owing by her to Lorrells LLP.
4.4 That Shoprite has retained Lorrells to advise it in respect of the loan and all aspects thereof (including but not limited to the drafting of the security interest agreement).
4.5 That Lorrells have informed Mrs Clutterbuck that they cannot accept instructions from her or offer her advice in respect of the loan or the drafting of the loan documents and that in these matters they are acting solely for and in the interests of Shoprite.
4.6 That she has been advised by Lorrells, but has declined, to seek independent legal advice.” (emphasis added)
This agreement, and the clauses above, particularly clause 4.6, are at the heart of this case. Shoprite were, apparently, longstanding clients of the Appellant who did all their legal work for them. There is some dispute as to the date that the agreement was signed. On its face, it is dated 20 June 2012 and this is the date that the Appellant asserted that it was signed when he gave evidence to the SDT. Ms Clutterbuck suggested that it was signed on 22 or 23 July 2012. The SDT did not find it necessary to make a finding on this (which, as I explain in paragraph 41 below, was a serious omission from their determination) but it seems to me that the evidence was strongly in favour of the Appellant's case for two reasons. First, he was able to produce convincing evidence that he was abroad on holiday in Greece between 13 and 25 July 2012 (flight tickets, photographs on his mobile phone etc). Secondly, a letter written by Ms Clutterbuck to Kiloran on 20 July 2012 is more consistent with her having already signed the loan agreement than with the agreement remaining to be signed (see paragraph 7 below).
The letter from Ms Clutterbuck to Kiloran of 20 July 2012 is relevant in a number of respects. It reads as follows:
“Following your email to me dated 16 July 2012, I'm becoming extremely concerned that, despite my requests, it has not been possible for you to arrange for the agreement (“the agreement”) to be signed. While I'm sure that you are aware, the purpose of obtaining the funds pursuant to the agreement is so that I am able to pursue a number of claims against various parties and seek to recover substantial sums.
It is essential that the agreement is signed and returned to my solicitors Lorrells LLP by Monday 23 July 2012 at 9am so that they are able to draw down on funds to instruct counsel on an urgent application listed for next Thursday 26 July 2012. Counsel requires substantial funds so that he can begin preparing for the hearing as a matter of urgency and attend the hearing itself to oppose the defendant's application.
I understand that you are concerned:
1. To ensure that I, as beneficial owner of Kiloran Properties Limited (“Kiloran”), understand the full meaning, affect and ramifications of your entering into the agreement and that I have had the opportunity of seeking independent legal advice before instructing you to execute the same. I hereby give that confirmation and confirm in particular that I understand and accept that I/Kiloran risk losing the properties in whole or in part if I fail to repay the loan of £300,000 therein referred together with interest thereon of £75,000 within six months of the agreement being signed and the monies, currently held by Lorrells LLP, being released.
2. That there are insufficient funds held by you on behalf of Kiloran to enable you to seek legal advice on the...
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