England and Wales Court of Appeal (Civil Division) Decisions

ON APPEAL FROM THE LAW SOCIETY

		Royal Courts of Justice Strand London WC2A 2LL Wednesday 7 November 2001

1. LORD PHILLIPS, MR: This is an appeal against the decision of a Law Society Appeal Adjudicator, upholding a decision of first instance Adjudicator, that, among other matters, Mr Farrelly is not of suitable character to become a solicitor and that his student membership be revoked. The facts can be summarised as follows.
2. Mr Farrelly commenced his Legal Practice Course (the "LPC") at Guildford in the academic year 1997/1998. During that year he remained on the books of Morgan Stanley Investment Bank in Luxembourg where he had previously been actively employed. Halfway through the 1997/1998 academic year, his father was taken seriously ill in Luxembourg and he was forced to return. Thereafter he returned intermittently to the United Kingdom to attend the LPC, but he failed the examinations at the end of the year. He had the right to resit the exams at Guildford, but chose not to exercise that right. Instead he began the course again for the academic year 1998/1999 at the BPP Law School in London. In that year he passed all the LPC examinations, except for one elective subject, Acquisitions and Group Structures, which he was unable to take because his father died just before the examination.
3. The appellant says that when he was at BPP a careers adviser advised him that he should not mention the previous LPC year at Guildford on his CV, because if he did so he would have the greatest difficulty in obtaining a training contract. The appellant obtained a training contract with Lawrence Graham. The CV he submitted when he obtained the training contract did not mention the year at Guildford, but merely indicated that he had been continuously employed at Morgan Stanley. It did not give the final LPC result, or refer to the fact that he had failed one elective. He says, however, that, before he started at Lawrence Graham, he told the training principal that he had not passed the LPC in full.
4. His training at Lawrence Graham was terminated after 8 months and 10 days after what he described in his letter of appeal to me as a personal dispute with them. On 10 May 2000 Lawrence Graham suspended the appellant and applied to the Law Society for the cancellation of his training contract, indicating that they would be unable to sign the appropriate form crediting him with any time spent in training. They explained that they were taking this action because of a lengthy series of incidents that they considered inappropriate and which had caused grave concern, quite independently, to two separate supervising partners.
5. In a letter of response to the Law Society, the appellant joined issue with the assertions that his conduct had been unsatisfactory, although, as he said, he was not aware of all the details of the complaint made against him. He explained that there had been a deteriorating relationship with the supervising partner but that he got on very well with the majority of his colleagues at Lawrence Graham. The letter to the Law Society ended:

"I hope to continue my contract with Lawrence Graham so that I can continue my training, learn and develop into a solicitor, something I have aspired to do all my life."

6. Despite this statement, Mr Farrelly applied to a number of firms to transfer his traineeship to them. These included Bird & Bird. On 16 May 2000, six days after his suspension by Lawrence Graham, he wrote to Miss Baverstock at Bird & Bird as follows:

"Further to our telephone conversation earlier today please find enclosed my current curriculum vitae. As you are aware, I am writing to investigate the possibility of transferring my training contract to your firm.

My request to transfer to Bird & Bird stems from my admiration of the high quality of work your firm undertakes and the firm's reputation for its unstuffy but yet highly professional working environment. I believe that employment would offer me the opportunity to gain comprehensive training and excellent career prospects in a progressive environment.

This application to transfer from Lawrence Graham is primarily because I am very concerned that I will not get the necessary training which will enable me to qualify as a corporate lawyer. At the moment I am in a seat which deals exclusively with Large Scale Voluntary Transfers of government housing stock. It is in effect a housing law seat but, despite this fact, it will count as my company commercial (CC) seat.

I have already completed six months in construction/property and I have yet to do a litigation seat. That leaves one seat to gain experience in a field I would like to qualify. As you will appreciate the firm's trainees are not distributed evenly; the majority are in property. The places for more mainstream CC (M&A, banking and corporate finance) are very limited and demand high. As I am 'technically' already in CC I have been told that getting such experience is by no means certain. Indeed, I have been told off the record that due to the demand for places and the necessity for every trainee to do a CC seat getting such experience is doubtful. This is obviously of great concern to me.

Although I realise this application to be irregular I am hopeful you will see my reasoning to be justified. I have made the decision to act now partly because to develop my career within your firm I realise it is advantageous to do as much of my training with you as possible. I have gained good commercial and legal experience and I believe I have a lot to offer your firm. I remain hopeful that you will look upon this application favourably."

7. The two Adjudicators each concluded, after interviewing Mr Farrelly, that this letter was misleading, it concealed the fact that his traineeship had been suspended and that an application by Lawrence Graham had been made to the Law Society that it should be cancelled. It suggested that his reasons for wishing to move were essentially because he was in doubt as to whether he would get another company/commercial training seat at Lawrence Graham.
8. Mr Farrelly sought to persuade each Adjudicator that his motive for obtaining a new traineeship was correctly stated in the letter and quite independent of his suspension. Neither Adjudicator believed him. The first instance Adjudicator described some of his answers as specious and glib. The Appeal Adjudicator referred to a letter from Mr Camps, the training principal at Bird & Bird, which stated he had been led to understand from Mr Farrelly that Lawrence Graham had been reluctant to see him go.
9. The CV that Mr Farrelly submitted to Bird & Bird stated that from February 1997 to June 1998 he had been working for Morgan Stanley Bank. It made no mention of his enrolment on the LPC at Guildford and his failure to pass that course.
10. As far as his year at BPP is concerned, it stated:

"Education

1998 - 99BPP LAW SCHOOL - Legal Practice Course

Electives: Commercial Law, Acquisitions and Group Structures, Employment Law."

11. That was misleading as it suggested that Mr Farrelly had passed all three electives when in fact he had failed one of them.
12. Regulation 31 of the Training Regulations 1990 provides that:

"Only a person who has satisfactorily completed a Legal Practice Course or an Integrated Course may attend a Professional Skills Course."

13. Contrary to this Regulation, Mr Farrelly had begun the Professional Skills Course ("the PSC") while at Lawrence Graham. He says he was not aware of that Regulation. The first instance Adjudicator found:

"After listening to Mr Farrelly I am satisfied that he deliberately misled Bird and Bird about his previous history and in particular he produced a CV which he knew was misleading in its omissions and was deliberately misleading in his reference to the Acquisitions and Groups Structures subject at BPP Law School."

14. The Appeal Adjudicator concurred in this conclusion.
15. Subsequent to his letter of application, Mr Farrelly was interviewed for a traineeship by Bird & Bird, first by Mr Camps on 30 May 2000 and then by a panel of three partners on 19 June 2000. He made no mention of his suspension or the pending Law Society decision on the application to terminate his contract. His explanation for this was that, at the start of his second interview, he was told that any offer of a training contract would be subject to satisfactory references being received from Lawrence Graham. Neither Adjudicator accepted this as a satisfactory explanation for his silence.
16. After interviewing Mr Farrelly on 20 July 2000, the Law Society Adjudicator decided as follows:

"1. Training contract terminated Mr Farrelly agreed that there was no prospect of a reconciliation with Lawrence Graham.

2. There are a number of significant concerns about Mr Farrelly's performance at Lawrence Graham. In particular these include his consistent difficulty in following instructions, his constant attempts to justify this behaviour and some difficulties in professional relationships.

3. I am prepared to grant four months of the period 1 September 1999 to 10 May 2000 to count. Although Mr Farrelly's performance fell short of what was required in many significant areas, there is some evidence that he learnt a number of valuable lessons about office procedures and practice. However, after detailed and lengthy questioning, on balance I am not persuaded that there is sufficient evidence to merit the very serious conclusion that he lacks the character and suitability necessary to be a solicitor. In view of the serious concerns expressed Mr Farrelly should be interviewed when he applies for admission. I strongly advise that Mr Farrelly discloses to his future employers that his training contract with Lawrence Graham was terminated and the reasons for it. References will be sought from his current employers and his training principal at the time of admission."

17. Mr Farrelly appealed against this decision. The Appeal Adjudicator, after interviewing Mr Farrelly made the following decision on 18 August 2000:

"I vary the decision of time to count to enable Mr Farrelly to count 6 months of the period 1 September 1999 to 10 May 2000. This is to enable him to have completed one seat at Lawrence Graham.

2. I confirm the other 3 parts of the Adjudicator's decision dated 3 August 2000.

I accepted Mr Farrelly's submission that he would find considerable difficulty in finding a training contract without at least one seat behind him."

18. In his letter of appeal to me Mr Farrelly commented of these hearings:

"I wanted to have the opportunity to present my side to an impartial adjudicator and therefore officially clear my character. I also needed to argue against the termination so that the time I had already served could count. As you are aware, I was successful in both applications."

19. That statement is seriously inaccurate. The termination was confirmed, serious shortcomings on the part of Mr Farrelly were confirmed and a requirement for interview before he applied for admission was imposed. To say that his character was cleared is a travesty of the true position.
20. I assume in his favour that his statement was symptomatic of an ability to deceive himself rather than any attempt to deceive me.
21. Mr Farrelly did not comply with the Adjudicator's strong advice that he should inform Bird & Bird of the termination of his contract with Lawrence Graham and the reasons for it. In his initial response to the first instance Adjudicator, he said:

"In light of the fact that B&B stated that they would not transfer my articles until satisfactory references were received, when I was invited to start in September I concluded that they must have known of the dispute but adjudicated to take me on regardless. Early into my training contract the HR department did inform me they had contacted The Law Society so as to confirm I had been given six months of articles. When I was recently summoned and told there was a problem I was shocked as I really did not know why. I had just assumed that during the due diligence process LG confirmed I had left their firm and that The Law Society had conferred one seat of training. Everyone in B&B's HR knew I had come from LG. Indeed, when I started work I never made it a secret that I had been at LG to anyone. Everyone knew because although I started work with the new intake in September 2000 I was given the status of a second seat trainee on internal literature."

22. In his interview with that Adjudicator, Mr Farrelly stated that he had not been in a position to raise the matter privately when he joined the firm. The first week at Bird & Bird was undertaken in very close contact with other trainees and when he had spoken with a Miss Murphy she confirmed that everything was in order. Therefore, he did not think it was necessary, as he assumed this meant that Lawrence Graham had told Bird & Bird of his suspension. In his appeal letter to me Mr Farrelly stated:

"On 25 July I received a letter informing me that I would be able to join B&B as a trainee and that my employment would start on Monday 4 September 2001.

I understood the letter to be confirmation that the Firm had contacted LG and that I had passed the Firm's due diligence requirement. I do firmly believe this was a reasonable assumption to make as otherwise I would simply not have been told I could start the training contract.

I knew the training principal at LG would have been duty bound to mention our dispute and its outcome. That is standard practice. Believing B&B had contacted LG and thus armed with the knowledge that they would have had to discuss the dispute led me to conclude B&B were fully aware of everything. I therefore did not undertake to further discuss the point as I saw no reason to. I did not ignore the advice from the previous hearing; I thought it had been fulfilled. This was an error.

I arrived at my new Firm on the 4th September 2001. When I arrived I believed B&B were fully aware of everything.

On the first day all new trainees were ushered into a conference room to be introduced to the various workings/departments of B&B. Each trainee had a designated seat with an individual training contract on the desk to sign. Before I signed I asked to speak to someone in Human Resource's Graduate Recruitment team. I asked whether or not the Firm had received confirmation from LG that the time I had served at LG was to count I was told that they had 'checked everything' and accordingly the training contract was for 18 months and not the usual 24."

23. On 13 March 2001, Bird & Bird received the following letter from Lawrence Graham:

"Mark [Farrelly] was employed by Lawrence Graham as a trainee solicitor from September 1999 to 20 July 2000.

On 20 October 2000 Mark e-mailed me to state 'I formally request that neither you, nor any member of the Lawrence Graham staff, ever provide anyone with a reference about me. I shall keep a hard copy of this transmission on my file'. I have since learnt that Mark misled Bird & Bird as to the reasons for his departure from Lawrence Graham and therefore it is clear that the transmission of 20 October was with the purpose in mind of misleading others with regards to the actions of this firm.

I, therefore, am obliged to correct Mark's claims. Mark's employment was suspended on 10 May 2000 and the firm applied to the Law Society to cancel his Training Contract. An adjudicator was appointed and the training contract was cancelled on 20 July 2000."

24. The receipt of this letter led Bird & Bird to apply to the Law Society to terminate Mr Farrelly's training contract and to the decision against which he now appeals to me.
25. Mr Farrelly told the Adjudicator, and the Appeal Adjudicator, that he did not send this e-mail in order to deceive Bird & Bird, but to ensure that any references he received in future came from Bird & Bird rather than Lawrence Graham. The appeal Adjudicator was not satisfied with this explanation.
26. Mr Farrelly has addressed me at length in support of his appeal. He has repeated the explanations he has already given to the two Adjudicators. He added, however, some further detail which he had not mentioned to them. Dealing with the letter that he wrote to Bird & Bird seeking a traineeship, he told me that he had spoken to Bird & Bird on two occasions before his suspension. He says he explained to them the reasons for wishing to transfer, which he subsequently set out in the letter to them.
27. I find it astonishing that if that conversation took place, it was not specifically mentioned to the Adjudicators. But whether it took place or not, I am in no doubt that Mr Farrelly must have known, when he wrote his letter applying for a traineeship, that the circumstances in which his traineeship with Lawrence Graham was coming to an end would be a matter of grave concern to Bird & Bird. It is something that fair dealing required should have been disclosed to them. The letter was seriously misleading. I concur in the view of each of the Adjudicators that it was intended mislead as to why it was that Mr Farrelly was seeking a new traineeship.
28. The CV that accompanied the application was also misleading. Mr Farrelly says that that was simply because he took it off his word processor and it was the CV that he had used when he applied to Lawrence Graham. He did not appreciate that it gave a misleading picture that he had passed, in full, the LPC course.
29. Mr Farrelly told me that he had been advised not to mention the earlier year at Guildford, not by any member of the BPP staff, but by a careers adviser who was attending a CV clinic as a visitor. If Mr Farrelly was told that anyone considering whether to give him a traineeship would be concerned that he had failed to pass the LPC Course at Guildford, honesty required that he should have disclosed that fact as well as the explanation given to the Adjudicators and to me as to the circumstances in which he failed that course. I also concur in the conclusion of the Adjudicators that it is not credible that he was simply unaware that his CV was giving a misleading picture of his academic achievements.
30. I turn to the failure to mention his relationship with Lawrence Graham when he came to be interviewed by Bird & Bird. In the course of his submissions to me, Mr Farrelly said that he did not think it would be productive to argue about his dispute with Lawrence Graham at that stage. It had not yet been adjudicated upon the by the Law Society, and he wanted to put himself forward in a positive manner. Mr Farrelly is no fool and has conceded that he must have had it in mind that, if the facts of his relationship with Lawrence Graham came to the attention of Bird & Bird, it was almost inconceivable that they would offer him a traineeship. I conclude, as did the Adjudicators, that he deliberately refrained from mentioning this at his interviews.
31. Mr Farrelly was told that references would be taken from Lawrence Graham, and he accepted, when I asked him, that he had thought that those references would be fatal. He must plainly have been labouring under great apprehension as to what was going to happen when the references were received. What in fact happened was that he received an acceptance letter. He said that he thought that Bird & Bird must have received the information in full and decided that, because he had done well in the interview with the Law Society, to take him on regardless. An alternative and more likely scenario is that he must have had very grave doubts as to whether a reference from Lawrence Graham could have been taken up at all.
32. That is a matter which, had he accepted the advice of the Adjudicator, he would have explored as soon as he arrived at Bird & Bird. I am satisfied that he did not do so deliberately. His explanation for this has developed on the three occasions that he has given an explanation as to why he did not raise this matter when he started with Bird & Bird. I have not found his explanation in the least convincing.
33. The e-mail came sometime later. One cannot conclude with certainty that it was intended to prevent Bird & Bird, rather than others, from receiving a reference from Lawrence Graham. However, one possible, and perhaps likely, view is that Mr Farrelly appreciated that Lawrence Graham's view of him could not have been communicated to Bird & Bird and was anxious to make sure that this remained the position.
34. It will be apparent from what I have said that I have concluded that each of the Adjudicators was justified in the view that he formed of this appellant. I am satisfied that he is somebody who falls short of the standards of honesty and integrity expected of a solicitor. The appeal against that aspect of the decision will be dismissed.
35. That renders academic the other limb of the appeal relating to three papers that the appellant sat on the PSC. Under the Regulation he was not entitled to be credited with passing those papers until he had completed the LPC. He sought a waiver of Regulation 31(2) so that he would be credited with them nonetheless. That application was refused and I can see no ground upon which that decision can properly be attacked. I dismiss the appeal against that also.
36. MR DALE: My Lord, there are no application for costs.