Solicitor who 'borrowed' £1.2m from client account struck off for dishonesty

A solicitor with an unblemished 38-year career has been struck off the roll after the Solicitors Disciplinary Tribunal found he had acted dishonestly when using money on his firm’s client account to feed a sudden and short-lived gambling addiction.

Noel Sedgley qualified in 1978 and had been running his own firm in Bournemouth since 1988. In 2016, following the deaths of a colleague and of a close friend, mounting work pressures and difficulties in the wake of a negligence claim against the firm, Sedgley turned to online gambling.

In the space of two months between 15 February and 16 April 2016, the 66-year-old solicitor made 59 transfers totalling more than £1.2m from the firm’s client account to his own personal account. Sedgley had repaid the whole amount by 15 June and he admitted breaches of accounting rules, but he denied an allegation of dishonesty.

The tribunal accepted that Sedgley had been a ‘thoroughly honest, decent, and hard-working solicitor’ who had been ‘caught up in his gambling activities, to a very serious degree’. But finding against him, the SDT said his conduct ‘had been dishonest by the ordinary standards of reasonable and honest people.’ In addition, the solicitor’s behaviour also showed he was aware of the dishonest character of his conduct, which satisfied the subjective element of the offence.

‘In taking steps to repay the money and keeping records of how much was owed when he knew the money belonged to his clients, and that he was not entitled to use that money, the respondent’s conduct was dishonest by those same standards,’ the judges said.

When asked whether he had ‘borrowed’ money from client account, Sedgley replied he could not say that he saw what he was doing in those terms at the time. He said he had ‘no intention permanently to appropriate client funds’ and had been ‘in a kamikaze state of mind’.

Sedgley said fellow solicitors would regard his conduct as ‘horrendous’ but he denied he had been subjectively dishonest, saying he didn’t believe he had an understanding that what he was doing would be regarded as dishonesty.

Although this had been ‘a sad case’, the tribunal said, there were no mitigating circumstances justifying a departure from the principle that strike-off was the normal sanction in cases of dishonesty. ‘His actions were planned … none of the transfers were accidental’ and ‘there was a real risk that the respondent may have been unable to repay the money he had used.’

‘A serious aggravating factor, of course, was that the respondent’s conduct had been dishonest. It was deliberate, calculated, and repeated,’ the tribunal said.

One witness, a solicitor who had known Sedgley for 30 years, said he was ‘totally honest’ and was ‘much liked and respected in the area’. She suggested he may well have suffered a mental breakdown and that his obsession with gambling was out of character. This, she felt, may have been ‘precipitated by events in the respondent’s office, in particular arising from a negligence claim relating to a matter handled by a colleague’ along with subsequent claims and instances which had to be reported to insurers.

By the time Sedgley eventually sought help and received counselling, his practising certificate had been suspended and his firm closed down.

His wife described him at the time as occasionally ‘moody and very depressed’ and sometimes ‘high’ and ‘verbally aggressive’. Her husband ‘was not the sort of man to go to a doctor unless he was almost at death’s door, so he had not sought help about the gambling problem.’

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Jean-Yves Gilg is editor in chief at Solicitors Journal

jean-yves.gilg@solicitorsjournal.com | @jeanyvesgilg

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