Tribunal fines solicitor £10,000 and orders £19,509.20 costs for client-account misuse and nondisclosure
Solicitor Charles Ayodemiji Ewan has been fined £10,000 and ordered to pay £19,509.20 in costs after the Solicitors Disciplinary Tribunal (SDT) found he misused his firm’s client account as a “banking facility” and failed to disclose a crucial loan to a lender in a property deal.
Sitting on 19 December 2022, the Tribunal heard that Mr Ewan, practising at Ewan & Co Solicitors LLP, admitted two allegations covering conduct between 2017 and 2018. The first centred on repeated use of the client account in circumstances amounting to the provision of a banking facility, contrary to Rule 14.5 of the SRA Accounts Rules 2011 and Principle 6. The second related to November 2018, when he either failed to tell a lender client that the balance of the purchase price for Property A would come via a loan or, failing that disclosure, failed to withdraw from the transaction—contrary to Principles 4, 5 and 10 and Outcomes 1.2 and 3.5 of the SRA Code of Conduct 2011.
The case stemmed from the firm’s involvement with TN (UK) Consultancy Ltd, a bridging-finance outfit run by a former solicitor. Investigators identified a pattern: third-party funds flowed into the client account and were then moved on without clear evidence of an underlying legal transaction handled by the firm. The Tribunal highlighted several examples, including large sums associated with a property venture and transfers connected to individuals and companies, with total movements in the sample reaching £931,916. The SDT said these flows demonstrated use of the client account in ways the rules expressly forbid.
In the lender-notification breach, the firm acted for a borrower purchasing Property A with a NatWest mortgage. The borrower also had a separate loan agreement with another party. Under the lender handbook, the firm should have reported that arrangement to the bank (if the borrower agreed) or ceased acting for the lender. The Tribunal found Mr Ewan knew of the loan yet did not disclose it, potentially depriving the lender of information relevant to risk and security.
Mr Ewan did not attend the hearing and was not represented. He had admitted the allegations in advance. The panel noted his extensive responsibilities at the time: owner-manager and the firm’s COLP, COFA, MLRO and MLCO. It observed that the misconduct occurred after he had previously received an SRA warning letter in 2016 about the improper use of a client account as a banking facility, which should have sharpened his compliance.
Assessing culpability, the Tribunal said Mr Ewan had full control over the misconduct and treated the misuse as part of his normal working practice, despite the warning. Although there was no evidence of actual financial loss to clients or the lender, the panel found a real and foreseeable risk of harm, particularly to the lender that was entitled to a fully informed decision. The behaviour, it said, undermined public confidence in the profession’s safeguards over client money.
Embed from Getty ImagesAggravating factors included repetition over time and prior discipline. In 2010, Mr Ewan had been fined for separate accounting-record failings, a theme the SDT said again touched on client-account operation. The Tribunal found no meaningful insight in the material before it; admissions arrived late and without explanation. There was no mitigation advanced at the hearing.
The SDT rejected a reprimand or no order as too lenient. It imposed a Level 3 fine of £10,000, noting the seriousness, the prior warning, and the earlier appearance before the Tribunal. It declined to add practice restrictions, observing that the SRA had not sought them and that the misconduct ended four years earlier.
On costs, the SDT scrutinised the SRA’s schedule and reduced elements it found insufficiently evidenced, including hotel and travel time figures, ultimately fixing total costs at £19,509.20. Mr Ewan had not filed a statement of means, so the panel had no basis to discount further.
The order requires Mr Ewan to pay the £10,000 penalty, forfeit to His Majesty the King, and £19,509.20 in costs. The decision underlines the profession’s bright-line rule: a client account is not a conduit for third-party funds unrelated to legal work, and lenders must receive full disclosure or lawyers must step aside.