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Solicitor Cameron Fyfe loses appeal against striking off ruling
Prominent litigation solicitor Cameron Fyfe is to be struck from the roll, after losing an appeal to the Court of Session against a decision of the Scottish Soliciutors' Discipline Tribunal following admitted professional misconduct.
Mr Fyfe was a partner from 1982 until May 2011 in the firm of Ross Harper, which was dissolved in April 2012 following the appointment of an interim judicial factor. The tribunal's findings related to a period between April 2008 and May 2011. Mr Fyfe accepted that in that time he permitted to be operated, or acquiesced in, a policy where the business was improperly funded by payments due to third parties, and countersigned an accounts certificate dated 10 May 2010 which he knew or ought to have known was inaccurate and from which the true financial position of the firm was not evident to the Law Society of Scotland. It was accepted that this was in breach of professional rules, and constituted professional misconduct.
Under the policy in question, money received from the Scottish Legal Aid Board in respect of fees and outlays due to third parties was paid into the firm's bank account, and cheques were written for the amounts due but not signed or sent out until the firm's cash flow permitted. Ledger entries were created to show that the cheques had been issued, and later reversed to show that the cheques had not been cashed. This process might be repeated.
The tribunal found that "The client ledgers gave the impression that payments due to third parties had been made by the firm when the funds actually remained in the firm account. This was designed to show that there were sufficient funds in the firm’s account to meet all its current liabilities to clients. Payments issued by the Scottish Legal Aid Board to the firm are deemed to be clients’ funds and are utilised to pay specific outlays on behalf of specific clients and to specific third parties, including payments due to other solicitors. They were not used for this purpose but were used to improve the financial position and cash flow of the firm and to obscure the true level of the firm’s liabilities and overdraft."
Payments in the region of £70,000 were delayed in this way during the relevant period. When Mr Fyfe, and certain colleagues, left the firm, there was a shortfall in client funds of about £40,000; a year later this had increased to £400,000. The practice only came to light when a member of the cashroom staff turned whistleblower. The tribunal stated that had either Mr Fyfe or the then managing partner, Alan Susskind, refused to sign the accounts certificate, "perhaps the shortfall would not have risen to such an extent. Theirs was a continuing course of deceitful conduct in relation to the firm's cashroom operating practices”.
On appeal it was argued for Mr Fyfe that the tribunal erred in (1) either incorrectly finding that there was dishonesty, or at least failing to recognise that this was not a case in which dishonesty was averred; (2) failing adequately to distinguish between the role of the petitioner and Mr Susskind in relation to their relative culpability; and (3) adopting an erroneous approach to the question of sanction. The tribunal’s finding that the petitioner’s conduct was deceitful was not consistent with a concession that no dishonesty was averred or admitted; he had had no involvement in the management or running of the cashroom and his role was one of omission compared to the active participation of the cashroom partner; and the tribunal erred in concluding that its only choice was between suspension and removal from the roll where there was no risk to the public.
The Lord Justice Clerk, Lady Dorrian, who sat with Lord Bracadale and Lord Drummond Young, observed that in line with previous cases the court had to afford respect to the decisions of specialist professional tribunals. Delivering the opinion of the court, she said that the argument that Mr Fyfe's knowledge of the practice was limited was contrary to the admissions made. And while there was no suggestion of dishonesty in a criminal sense, "Acquiescing in the practice in question could not in our view be described as anything but deceitful. The fact that the tribunal did not make, and were not asked to make, a finding of dishonesty does not prevent a conclusion that the conduct was deceitful. Effectively, the tribunal concluded that the actions of the petitioner, whilst not dishonest, lacked integrity."
Although Mr Fyfe, unlike Mr Susskind, had not had a managerial role, his involvement had been over a longer period (by about 13 months), and "all partners have the responsibility for ensuring that the accounts are kept in order. [Mr Fyfe], knowing of the scheme in operation, took no steps to satisfy himself on the matter... We are not persuaded that the tribunal erred in any way its assessment of the relative roles of the two partners".
On sanction, despite testimonials and character references placed before the tribunal, and the fact that he had been permitted to continue in practice, in which he engaged in campaigning and pro bono work, this was a case which involved the improper use of client funds, and "In acquiescing in a deceitful course of conduct designed to conceal the true financial situation of the firm, [Mr Fyfe] seriously compromised his integrity", Lady Dorrian said.
She continued: "The rules relating to the maintenance of the client account are so fundamental to the profession that every solicitor must be taken to know that any funds held for or received on behalf of a client must be paid without delay... into the client account... As has been repeatedly pointed out, the client account is sacrosanct, and improper dealings with client funds – dishonest or otherwise – must always be treated as a matter of the utmost gravity....
"This is an area in which the views of the tribunal require to be given the utmost respect, and we are unable to say that the disposal was one which was not commensurate with the conduct or was one which was not reasonably open to the tribunal on all the facts before it... As the fiscal in the present case had observed, here the client account was permanently in deficit. The tribunal noted that the essential qualities of a solicitor are honesty, truthfulness and integrity. It is imperative if the public is to have confidence in the legal profession that solicitors comply with the accounts and professional practice rules. In holding funds for clients, a solicitor is in a privileged position of trust and breaches of the accounts rules had to be viewed as serious.
"In our opinion the Tribunal was entitled to consider that the range of options was restricted to suspension or removal, and on the facts of the case its conclusion that removal was the appropriate sanction is not one which we could describe as inappropriate or disproportionate. In these circumstances the appeal will be refused."
Click here to view the opinion of the court.