England and Wales Court of Appeal (Civil Division) Decisions

ON APPEAL FROM THE LAW SOCIETY

		Royal Courts of Justice Strand London WC2A 2LL Thursday 18 January 2001

1. LORD PHILLIPS, MR: This is an appeal by Mr Tyrone Anthony Walker against a decision by the Appeals Committee to uphold the decision of the Office for the Supervision of Solicitors ("OSS") to approve, for the purposes of the condition imposed upon Mr Walker's Practising Certificate for the year 1999/2000, Mr Walker's partnership with Mr Lovell Chohan, subject to the condition that he may not be solely responsible for the firm's accounts function and firm's compliance with the requirements and obligations of the Solicitors Accounts Rules, nor may he be the sole signatory to any client account cheque, which must be signed by at least one other principal.
2. Mr Walker objects to that qualification of the condition that he practice in partnership with Mr Chohan, who is otherwise approved by the Law Society. But he has also advanced a wider objection that the condition imposed on his Practising Certificate, that he should have to practise in partnership, should be lifted because it is unfair that it should be continued.
3. Mr Walker was, and still is, in practice as the sole principal of Walkers, 6 Red Lion House, Alexandra Road, Hounslow. He was born in 1958 and admitted as a solicitor on 1 August 1985. This is his second appeal to the Master of the Rolls in relation to this matter, the previous one having been made to my predecessor, Lord Woolf.
4. In 1997 Mr Walker was investigated by the Monitoring and Investigation Unit of the OSS for alleged accounting irregularities. The investigation revealed that his accounts were not in compliance with the Solicitors Accounts Rules, and a formal application alleging various breaches of those rules was made on behalf of the OSS to the Solicitors' Disciplinary Tribunal. The Tribunal found a number of irregularities as set out in paragraphs 3 to 29 of their findings dated 22 February 1999. Their findings did not involve dishonesty, but they did involve serious breaches of the Accounts Rules. They found, in circumstances which Mr Walker has repeated to me, that his previous experience had not involved concerning himself with keeping accounts and therefore they had become out of his control or had never been properly in his control.
5. Having regard to the irregularities that Tribunal found, they imposed a fine of £12,500. In addition they made a recommendation to the Law Society that Mr Walker should in future be permitted to practise only in a partnership, or in employment, approved by the Law Society. That is a common condition imposed by the Law Society in circumstances such as this. I would emphasise that it is not imposed by way of punishment, it is imposed because of the duty of the Law Society to make sure that the public is properly protected, and seen to be properly protected, against any risk that there may be in dealing with solicitors.
6. Mr Walker made further representations to the OSS in a letter of 14 September 1999, but to no avail. His Practising Certificate for the year 1998 to 1999 was, therefore, subject to the following condition:

"That within three months of the of this letter, you may act as a Solicitor only in employment which is approved by the Office for the Supervision of Solicitors in connection with the imposition of that condition, or as a member of a partnership which is so approved."

7. Mr Walker appealed this decision, first, to the Compliance and Supervision Committee. Their decision was set out in a letter dated 11 November 1999. They upheld the Tribunal's decision and held that the condition should become effective on 15 February 2000.
8. Mr Walker then appealed to Lord Woolf as the Master of the Rolls under section 13 of the Solicitors Act 1974. That appeal was heard on 30 March 2000. Lord Woolf began his judgment by stating:

"I have no doubt whatsoever that Mr Walker is a very efficient and able relatively young solicitor."

9. But Lord Woolf upheld the decision of the Appeals Committee to approve the condition that Mr Walker only practised in approved employment or in partnership. He did, however, grant Mr Walker a period of six months to comply with that condition and, in accordance with a suggestion volunteered by Mr Walker, he directed that Mr Walker should provide the Law Society with accounts at two monthly intervals. Lord Woolf also stated:

"I also intimate that what I think is required in this case is a partnership with a respectable partner -- I emphasise the singular. As long as that proposed partner is someone with a proper record with regard to compliance with the rules of the Law Society and someone who is not in any other way unfitted to carry on a practice, I would expect the Law Society to approve the partnership."

10. On 23 June 2000 Mr Walker wrote to the OSS putting forward the name of Mr Chohan as a suitable partner to enter into partnership with him. In that letter Mr Walker said about Mr Chohan:

"Mr Chohan runs a Legal Aid Practice which deals with largely matrimonial and personal injury work. He has a Legal Aid Franchise and is regularly monitored as a result of this. He handles very little Client money.

This firm, because it deals with a very large amount of commercial and residential conveyancing work, deals with a substantial amount of money and, therefore, Mr Walker has no objection to being entirely responsible for the Accounts produced in respect of this firm.

We would, therefore, be grateful if you would confirm that a waiver can be granted to Mr Chohan in respect of the Accounts of this firm during the continuance of the partnership, once it has been formed."

11. Having received that letter on 3 July 2000, the OSS wrote to Mr Walker informing him of their decision to grant him a Practising Certificate subject to the following conditions, among others:

1(a) That from 30 September 2000 he may act as a solicitor only in employment which was approved by the OSS in connection with the imposition of that condition, or as a member of a partnership which was so approved, and that he should not be a director and/or shareholder of an incorporated practice.

(b) That any employer or any prospective employer, partner or prospective partner should be informed of the conditions imposed on his Practising Certificate.

(c) Subject to Mr Walker's entitlement to request the Office to consider, vary or remove the conditions on his Practising Certificate and the right of the Office to exercise discretion in this regard when considered appropriate to do so, the condition of approved employment is to remain in place during the currency of Mr Walker's next two Practising Certificates when it should be reviewed in any event by the Office in the light of the circumstances at the time to see whether the condition should remain, be amended, replaced or removed.

2. That Mr Walker should deliver to the Law Society Accountant's Reports for the periods ending 31 May 2000, 31 July 2000 and 30 September 2000, all of which should be delivered within two months of the end of the period to which they relate, except that an extension of time to 18 August 2000 was granted in respect of the report for the period ending 31 May in view of the short notice. This was stated to be in accordance with the direction of the Master of the Rolls that Mr Walker should deliver to the Law Society, within the six-month period from the date of the hearing on 30 March 2000, accounts every two months.

12. The letter stated that the OSS would be dealing with the application for approval of partnership with Mr Chohan. On 19 July 2000 the OSS wrote to Mr Walker informing him of their decision on the suitability of Mr Chohan. The decision granted conditional approval subject to the following condition:

"i) that Mr Walker may not be solely responsible for the firm's accounts function and the firm's compliance with the requirements and obligations of the Solicitors Accounts Rules, nor may he be the sole signatory to any client account cheque, which must be signed by at least one other principal."

13. Mr Walker appealed against that condition to the Compliance and Supervision Committee and indeed against the requirement to provide Accountant's Reports every two months. So far as the latter is concerned, he contended that it had not been the intention of the Master of the Rolls when he made the order, nor indeed was it the order made. That particular objection made by Mr Walker has, I am told, been resolved. It seems to me that Mr Walker was plainly right, having reviewed the proceedings, that the suggestion that he produce accounts did not carry the implication that they should be formal Accountant's Reports. So far as the requirement in relation to the firm's accounts, and in particular the requirement that both partners should sign cheques, Mr Walker submitted that this was unreasonable and unfair because:

"It would cause enormous difficulties in running the Practice and may prevent the Practice from running if it were necessary for Mr Chohan to sign each and every cheque which leaves the firm. Mr Chohan is a Litigator and spends much of his time at court .... If Mr Chohan had to be present at the Practice to authorise the sending of monies through the Bank system or by cheque, there would be unnecessary delays and this could result in complaints against the firm and serious losses to the members of the public for whom the firm acts.

Mr Chohan will have the opportunity each and every day to see what monies have been sent from the firm, without actually having to sign cheques, etc, so that members of the public are properly protected."

14. In a decision dated 7 September 2000 the Appeals Committee rejected Mr Walker's appeal in relation to this matter. They recorded that their reasons for dismissing his appeal against the condition that he should not be the sole signatory to client account cheques were that:

"...in the light of the findings of the Solicitors Disciplinary Tribunal of 22 February 1999, it was not in the interest of the public or profession for Mr Walker to sign any client account cheque of his own".

15. Before me Mr Walker has attacked both the requirement for two partners to sign the cheques, but also, much more broadly, the continuance of the condition requiring him to practise in partnership. His submissions to me have shown that he is not yet in a position to satisfy that condition because he tells me that the negotiations with Mr Chohan, which had been proceeding very favourably at the time of the hearing before Lord Woolf, have been thrown into disarray by the requirement that Mr Chohan should have to countersign cheques. He has told me that the request that he made to the OSS in his letter of 23 June 2000, which would in effect have absolved Mr Chohan from any responsibility in relation to the accounts, was not one he made at his own initiative but at the request of Mr Chohan. He has submitted that the defaults which led to the imposition of the condition that he should practise in partnership are now over three years old; that he has maintained a thriving partnership which is of great benefit not only to his clients but to the community; that he has rectified the deficiencies which are shown to exist in the book-keeping of his firm and now has in place an accounts department which will ensure that the irregularities that occurred in the past will no longer occur; and that in all these circumstances it is not reasonable that the condition that he should practise in partnership should subsist.
16. As Mr Field for the Law Society has observed, this is in effect an appeal against the decision which was reached by my predecessor Lord Woolf. I do not consider that he has made out a case which should lead me to reverse the decision made by Lord Woolf. It is true, however, that a further period of time has elapsed, and unfortunately elapsed, since the hearing by Lord Woolf without the requirement being satisfied while Mr Walker has continued to practise. Mr Field has pointed out that that is an unsatisfactory state of affairs, but it does mean that Mr Walker's practice has continued that much longer. It is the practice of the OSS to review conditions requiring partnership and consider whether they are still appropriate. The norm is that they subsist for a period of three years. Obviously, the length of time they subsist must bear some relation to the time that has elapsed since the events took place which gave rise to the conditions. Having heard what Mr Walker has said, I would urge the OSS to examine his practice so that they can give consideration to the points he has made before me. So far as I am concerned, the case has not been made out for varying the order that was approved by Lord Woolf.
17. That part of the appeal will be dismissed.
18. I now turn to the requirement that Mr Chohan, or whoever the approved partner should be, should countersign all the cheques. I can understand why it was that the OSS imposed such a requirement. The fact that the relevant passage in Mr Walker's letter of 23 June was written at the instigation of Mr Chohan only underlines their anxiety. That letter plainly gave warning of the possibility that, if Mr Chohan was taken into the practice, he would not wish to concern himself with the accounts of the practice. That was the very matter that the Law Society wanted any partner to concern himself with and the reason for the imposition of the original condition. In those circumstances, I can understand the OSS wishing to impose a further condition that would ensure that Mr Chohan did concern himself with the accounts.
19. However, I have been persuaded by Mr Walker that a requirement to countersign cheques is not the best way of achieving this and, equally, would impose restrictions on the efficient running of the partnership which would be undesirable. Because Mr Walker's practice involves a considerable amount of conveyancing work and cheques are received in relation to transactions on behalf of clients, it is desirable they should be passed on to the clients without any delay. What I have suggested as an alternative, and it is a suggestion which Mr Field has acknowledged is perhaps more sensible, is that the condition should be varied to a requirement that Mr Walker should produce a weekly schedule of payments made from client's accounts of the practice and that Mr Chohan should, say within 48 hours of production of that schedule, initial it with the date thereby showing that he has considered the payments made. He will no doubt appreciate his duty as a partner to ensure that payments made by the practice are properly made. It will obviously be desirable that the schedule should contain a brief explanation of the payments so that Mr Chohan can quickly appreciate the reason why payments are made.
20. I will allow the appeal to the extent of directing that the condition be substituted by that requirement. The position is that Mr Chohan is not yet a partner and some time must be allowed to enable negotiations to be resumed. Mr Field has urged me to allow very little further time to elapse having regard to today's hearing. I direct a further two months be permitted for that to take place.
21. MR FIELD: My Lord, can I take you back to the revised condition when you refer to the schedule of payments made from client's account. Would you perhaps consider payments made from and to client's account.
22. LORD PHILLIPS, MR: Payments made from and to client's account, I think that may be more satisfactory.
23. MR WALKER: That will cause a great deal of work because there are a lot of cheques that come in every day. I understood the only concern was the signing of cheques, I was not aware there was concern about cheques coming in. That has not been raised before, it was the signing of cheques point which is the one we are concerned about.
24. LORD PHILLIPS, MR: It seems to me that the important concern is cheques going out of client's account rather than coming in. Of course Mr Chohan would wish to satisfy himself that the accountancy of the practice is being properly managed. Having heard your point, I will leave the variation as it stands. It does entirely embrace that area of concern that the was covered by the original requirement to double sign cheques.
25. MR WALKER: Talking about timing here. I have mentioned that I now need to go back to Mr Chohan. It does leave me in a difficult situation if Mr Chohan feels he does not want to take this forward because of time which has elapsed since we were discussing this in great detail and we were ready to join hands. It was not through any fault of mine that this partnership did not come about.
26. LORD PHILLIPS, MR: I have made my order. You have two months, you will have to move fast. If Mr Chohan is going to say "nothing doing", that will be something he will make plain very quickly indeed and you will have to seek some alternative solution. I have urged the OSS to review your position, and if you are having difficulties with Mr Chohan you must raise this immediately with the OSS.
27. MR WALKER: I have been speaking to Mr Field over the last two weeks because I have been trying to get hold of Mr Chohan, but I have not been able to get hold of Mr Chohan because he has been in court. When I saw him before Christmas, we had so many discussions about this case he did not want to talk to me until after today.
28. LORD PHILLIPS, MR: That has now taken place.
29. MR WALKER: I welcome your urging of the Law Society, the OSS, to reconsider this partnership but my own view about it is that neither of those bodies had done me any favours. I have done nothing to harm any of them, but they have never tried, as you can see from all the various appeals that have gone on, to be in any way reasonable about my situation, and I feel as though if it is left to them to reconsider this whole partnership is never going to happen. The concerns I have which I have already made to you about the community in which I work and all the people I am obliged to and have worked hard for all over the years (and I am in my ninth year of running this practice) it would be a tragic loss. I just cannot even think of the consequences for those people who rely on me as almost part of their family, to think what would happen if after the two months elapses and Mr Chohan feels he does not want to take it forward.
30. LORD PHILLIPS, MR: I am not in a position to do anything about these matters other than to reiterate the request I have made that the OSS should look very carefully at this situation. You have heard Mr Field on the points that have been made, and I suspect you have heard them several times before. Plainly, if there is a thriving practice that is now being properly run, it would be a very great pity indeed if that practice had to cease and it was not necessary. That is ultimately a matter for the OSS to consider.
31. MR FIELD: I will convey your comments straight away. Finally as to the matter of costs. In relation to the argument that the original condition should be removed, you disagreed with that. In relation to the other condition, you substituted a rather different condition. You acknowledged that it was quite understandable why the Society imposed it in the first place, and you also opined that Mr Walker has brought it on his own head by virtue of what he wrote in the letter of 23 June last year. In the circumstances, looking at the matter as a matter of substance rather than detail, I would ask for the Law Society's costs.
32. MR WALKER: Yet again, I would not have got anywhere without coming before you today. The condition has been varied. You have looked at it and you can see the difficulties of working within the condition as imposed. As a result of that, I feel as though I have achieved mainly what I mainly came here for. At the outset, when I made my application, I only came here to vary that condition, the position regarding Mr Chohan's partnership was never a problem at that stage. It has only because these things take so long to come before yourself -- and I do not blame you for any way for that -- but they do take their time to get to that stage and I had hoped that the Appeal Committee could have look at this more reasonably at the time when I made appeal many months ago which could have resolved the situation and the partnership would have been finalised. It is only because I have come here after all these months. A lot of my time has been taken up in this, really time which should be given to my clients. I have taken time to do this, I do not seek my costs in this, I just seek justice and I think it is unreasonable that the other side should be asking for costs. I would not have got what I got from you today if I had not come this far.
33. LORD PHILLIPS, MR: I consider that the variation which has been made is one which could have been achieved without it coming before me. The real issue that has been canvassed before me is the one upon which Mr Walker has not succeeded. It is right that he should pay the costs.
34. MR FIELD: To be assessed if not agreed.
35. LORD PHILLIPS, MR: Yes.
36. MR FIELD: I am obliged.
PROCEEDINGS
37. LORD PHILLIPS, MR: Good morning.
38. MR WALKER: It is a main application today for this condition attached to a partnership and there is then a subsequent application following that which forms part of the petition before you today. Perhaps I could take you to the main point first.
39. When we were before Lord Woolf in March last year, Lord Woolf heard in full the case and gave a full judgment, I hope my Lord has a chance to look at that, setting out what the background was and his views about the situation and what should happen. He made it very clear -- and I draw your attention to paragraph 36 which is on page 50 of the bundle before you -- where Lord Woolf says:

"I am going to say that I allow six months, and I also intimate that what I think is required in this case is a partnership with a respectable partner -- I emphasise the singular. As long as that proposed partner is someone with a proper record with regard to compliance with the rules of the Law Society and someone who is not in any other way unfitted to carry on a practice, I would expect the Law Society to approve the partnership."

40. That was the condition upon which he said the partnership should be approved.
41. LORD PHILLIPS, MR: He also goes on to to deal with providing accounts.
42. MR WALKER: Yes, that is a separate issue and that has been resolved. There is no dispute about that. What is in dispute is what the partnership should consist of. Those were his conditions. It should be somebody who is a respectable partner with a proper record of compliance with the rules of the Law Society and somebody who is not in any way unfitted to practise. I put forward Mr Lovell Chohan within a few months of this judgment being given and the Office for the Supervision of Solicitors approved Mr Chohan, but they attached those conditions. One of those conditions was that, as far as signing any cheques was concerned of the practice, they should be signed not simply by me but also by Mr Chohan. I was a bit surprised about that because I was not expecting any further conditions to be attached to the decision made by Lord Woolf. LORD PHILLIPS, MR: I have read all the papers and I am familiar with the sequence of events. I rather feel that you brought this on your own head because the reason that Lord Woolf imposed this condition was because of the fact that you had lost a grip of the accounts back in 1997. He considered that the Law Society were justified in imposing a condition that you should have a partner so that there should be somebody else in the partnership, apart from yourself, overseeing; overseeing in particular the accountancy side of the practice. What you then did was to write to the OSS on 23 June saying that Mr Chohan, who you were hoping that the Law Society would approve.... May be it was not on 23 June.
43. MR FIELD: It was, my Lord, page 58 in your bundle.
44. LORD PHILLIPS, MR: That is right. You said he had a legal aid franchise and is "regularly monitored and handles very little client money". Then you go on to say:

"This firm, because it deals with a very large amount of commercial and residential conveyancing work, deals with a substantial amount of money and, therefore, Mr Walker has no objection to being entirely responsible for the Accounts produced in respect of this firm.

We would, therefore, be grateful if you would confirm that a waiver can be granted to Mr Chohan in respect of the Accounts of this firm during the continuance of the partnership, once it has been formed."

45. What you were asking for was an agreement to something which would nullify the object of the exercise which was that your partner should join with you in having an oversight of the accounts.
46. MR WALKER: I appreciate that, but that was actually put forward at the instigation of this particular individual. I said to him -- we had a lot of discussions about this -- that I could not seem them wanting to agree to waiver as the whole object of the exercise was to have some control. This was only put forward at his instigation, obviously I have to put it forward in a way that makes it sound as though I am trying to convince the OSS or whoever that that is something they may want to consider. I could not put it forward in a half-hearted way because, obviously, he had to have sight of this letter and he had to be satisfied that it was being pursued in a way which he felt was genuine. I put that forward on his behalf, not mine, because I appreciated the situation.
47. LORD PHILLIPS, MR: But it is not surprising that the response to that was to set alarm bells ringing in the OSS who said, "We must impose some additional condition to make sure that this litigation partner is actually concerned with the accounts".
48. MR WALKER: I appreciated that, but I would have thought that they would have said that "No, we cannot agree to that waiver". As I understood it from Mr Chohan, he had known of situations where the waiver had been approved. I was not familiar with that at all, he actually said there were cases where it had been approved. So I was really putting it forward because he thought there was a possibility that there was something he might be able to give. I said that I could not see it happening but I would try. I thought they would say "no" and that would be the end of it and we would finalise everything. What surprised me was that they came back with this condition about signing cheques. As I said in the appeal notice to the OSS at the time, on page--
49. LORD PHILLIPS, MR: I see what you said, that you had an awful lot of cheques and Mr Chohan is busy with his litigation work and it is going to be a considerable administrative burden if he has to countersign all the cheques.
50. MR WALKER: It would be virtually impossible because he very often goes from home straight to court and would often get back late in the evening so if I had cheques or monies to be sent that day, I could not do it at all. I could not function without him being there. Very often you would not know what money was to go out until the day itself because you are waiting for money to come in, perhaps in a conveyancing transaction or whatever, so you could not be pre-prepared. My difficulty was that I just could not function, I could not provide a service to the clients. Mr Chohan would keep an eye on things on a day to day basis. He would be there at some time in the evening.
51. LORD PHILLIPS, MR: One might say that if he was going to be there some time in the evening, he could perhaps sign the cheques when he was there and they could go out the next morning.
52. MR WALKER: I discussed that with him, but looking at it realistically it is not realistic, because, particularly with conveyancing transactions, we have completions ON a particular day. The money comes in, say, early in the morning from the bank and can only be sent out during the course of that morning. I cannot ask Mr Chohan to sign anything until I know the money is in because we have no money to send out at that stage. The clients may not turn up with the balance of the money that is needed to complete the transaction. There is a whole series of things that might happen and it is almost impossible to pre-plan the whole thing. It is just a question of somebody being there, doing the job as a conveyancer, making sure the money comes in and making sure that the correct money goes out. To expect Mr Chohan to sign all that is just impossible, it just could not be done. We had a long chat about it. He does not do conveyancing for the simple fact that he does not like dealing with all this money and all the rest of it. The practical way round it was that if he could be left -- as a normal partner would be under the rules as applied -- in everyday control of what is going in and what is going out. I would have thought that Lord Woolf made that plain in his judgment, that just allow the partnership to be formed and allow it to operate in the normal way.
53. LORD PHILLIPS, MR: I do not think Lord Woolf envisaged the picture you painted to the OSS of having a partner who would be out doing litigation work.
54. MR WALKER: It was explained to Lord Woolf at the time that he was a litigation partner. I think it is in his judgment that it was explained that he was a litigation partner and that was why the two practices could work together well. I do a lot of property and commercial type work and he did a lot of litigation work. So it was understood that that was the way it was going to be. I can take you through some of the paragraphs in the judgment if you would like.
55. LORD PHILLIPS, MR: I have read the judgment.
56. MR WALKER: I think he understood clearly what the circumstances were. He understood that I was in an area where I am a reasonably highly regarded lawyer in this area. People trust my ability. I accept that things went wrong some years ago and the point has to be made again that it was not something which I personally did. I was responsible for it as the solicitor who owned the practice, but it was not something which I personally did. It was not as though anybody lost any money, it was not as if anything went wrong as a result of it. I accepted responsibility because my book keepers, effectively, my accountants, did not do the job they should have done as well as they should have done and there was no way I could not defend that. I had to accepted it. The punishment that was handed down was a very severe fine. What happened was obviously something which had to be paid, but this further matter is something causing considerable concern and difficulty to me.
57. LORD PHILLIPS, MR: Perhaps we could explore with Mr Field whether there is any alternative which would avoid the difficulties but achieve the object of making sure that Mr Chohan is actually applying his mind and his eyes to what is happening as far as payments from clients' account are taking place. Would one possibility be for the conditions to be varied, and I put this to you for the moment, so that you would be required each day to draw up a schedule of all payments made from clients' account, with just a line of explanation of why they had been paid and that Mr Chohan should initial and date the schedule when he pays his evening visit, or whatever, just to show that he would be aware of monies that had gone out since he last performed that act, and would therefore be properly informed of the way in which the accounts were being handled to that extent. If that were done, that would probably be a more effective way of making sure Mr Chohan was kept informed than his simply sitting down in a rush and signing a whole lot of cheques. Obviously I want to discuss that with Mr Field if that would be a way ahead.
58. MR WALKER: Obviously I can only answer for myself because I have not put this to Mr Chohan. But it seems a practical way forward. I would not be able to say whether Mr Chohan might accept that.
59. LORD PHILLIPS, MR: That is perhaps another matter.
60. MR WALKER: He might say that at the end of the day what he would be looking at is a number of blank figures and having to accept my explanation of what has gone on.
61. LORD PHILLIPS, MR: That is equally true of the requirement that he should countersign cheques.
62. MR WALKER: He has the same problem because he would be signing cheques not knowing what they relate to.
63. LORD PHILLIPS, MR: The difference with this is that you could put a line of explanation "Completion of this or that". Obviously, in that situation, he would have to rely upon you to be honest and to explain what you were doing. This would only be one aspect of the overall accountancy of your firm, but it is the aspect the Law Society has expressed concern about and it would leave you in a position to demonstrate to the Law Society, by giving them photocopies of the schedules initialled by your partner, that this had been taking place. It occurs to me that, obviously if Mr Chohan is not going to play ball, you are going to be in difficulty. The inference would be that he is not prepared to play ball with doing that area of responsibility which the Law Society was anxious that a partner should do.
64. MR WALKER: We have been discussing partnership for some time. I think at least a year before I came before Lord Woolf we had a lot of long meetings and we were very close to reaching partnership arrangement. What has caused the problem is that Lord Woolf gave his decision last March and I had a number of lengthy discussions with Mr Chohan and we were ready to go forward with the partnership. I put his name to the Law Society, OSS, in June. That was a couple of months after the decision of Lord Woolf. I was expecting them to say fine because he had a good track record. That would be it and we could then finalise the terms of partnership.
65. LORD PHILLIPS, MR: More water has flowed under the bridge since then.
66. MR WALKER: Time has gone by and one of the reasons we were going to have this partnership was because he was in premises in Hounslow, just up the road from me, where he was getting slightly tight for room. He was expanding and taking on other people and his space was just becoming used up. He was going to move into my building. I have a large building where I have an upstairs part which I let to a tenant. Obviously I would have asked them to go, I have known them for a long time.
67. LORD PHILLIPS, MR: Perhaps we are going off the point. I would like to ask Mr Field for his reactions to this proposal.
68. MR FIELD: Before I deal with that, with respect, can I enquire of Mr Walker whether he is realistically pursuing the second limb of his application to try to get rid of the approved partnership/employment condition.
69. LORD PHILLIPS, MR: You can ask him.
70. MR WALKER: That is my second point today before you. I am quite happy to take that forward at this point before you put the other point to Mr Field if you want.
71. LORD PHILLIPS, MR: Would that be helpful?
72. MR FIELD: Yes, my Lord, I think it would.
73. MR WALKER: The second point in my petition is regarding the partnership condition itself. That was imposed, as you are aware, originally by way of recommendation at the disciplinary hearing in January 1999, which is now two years ago. That was following a very substantial fine for what had happened which actually took me by surprise. There has been quite a lot of argument about this.
74. LORD PHILLIPS, MR: I am aware of that. Mr Field told you what his bald part estimate of what time was likely to be.
75. MR WALKER: I have been given an indication which I took, perhaps, a bit too literally and, as a result, I decided not to defend anything because I knew that at the end of the day I had to accept responsibility for what had happened.
76. LORD PHILLIPS, MR: Do assume I have read the papers because I have.
77. MR WALKER: That was the recommendation made two years ago. That is only a recommendation, it is not a question of the Law Society being bound by it. They do not have to follow it if they feel a particular solicitor has been penalised heavily already. I might point out that prior to that I had a completely clean record. I had worked in the City for about ten years, an unblemished record, there was no previous disciplinary hearings, nothing of any kind whatsoever. This was the first time I found myself in a situation where I was facing questions about what I had done in my firm and so on. One would have thought a fine, a very substantial fine, at that stage would have been sufficient to say that the lesson had been learned, coupled with perhaps further regular reporting on the accounts of the firm or whatever, that that would be sufficient and I would be allowed to carry on practising on my own. The point had been made and you see that there had been no dishonesty, nobody had lost any money, so the question was.... The amount of money concerned was not huge sums of money. I am actually dealing with multi millions of pounds all the time. We are talking £10,000 - £12,000 which was the amount which concerned about 24/25 different files. So the level of concern was where there was no actual loss to anybody, where there was no intention to run the practice on money belonging to other people, or anything like that. These were all points accepted by the tribunal. The fine, I would have thought at the time, would have been adequate in view of my past unblemished record so I took on board the recommendation. I did consult Mr Field about this at the time and he felt that perhaps at the time it was not something the OSS would pursue. It was purely a recommendation and I felt assured that maybe that would not happen. That decision was delivered in January 1999. It was September 1999, some 8 or 9 months later, that I actually heard from the OSS saying they now wished to pursue this three month partnership condition. This took me by surprise because 8 or 9 months had gone since the decision had been made. If they were that concerned about the problem about partnership and having control over the accounts and so on, it seemed odd to me that they had taken so long to do this. To some extent I did feel that they waited for me to pay the fine and costs before they actually pursued this recommendation because I had mentioned to them at one stage that I might want to appeal the original decision of the tribunal because I thought it was unfair, but I decided as time was passing and it seemed as though they were not taking the point about the recommendation, I paid the fine and I paid the costs, and I thought that would be the end of it. I had learned my lesson. I purchased new software, new hardware. It cost me thousands of pounds to put all this in place. I now have two book keepers and two accountants, each watching each other making sure that things are done properly. I have been giving regular accountant's reports at considerable expense to the OSS and the Law Society. So I feel that the accounting side of it is very much under control. Everything is there. The monitoring unit have every right to visit me and look at my books and take whatever it is, copies of whatever they want. There is that course available to them. I feel as if I have complied with everything I was asked to do. I put my house in order.
78. I do accept that mistakes were made earlier on. I had come from the City after ten years. I had been leading a charmed life to some extent because I never had to handle money at all. That was done by the department which dealt with the funds. To me it was a new thing. I came to a practice, I took over the existing firm, bought the partners out. They had their own book keeper and everybody else already there. I took those people on and I trusted that they were doing the job well. I did not see that there was any reason why I should question them. They were mature people who had been doing it for 20 or 30 years. Maybe that was naive of me. The reality is you cannot just sack people who have been doing the job well for many years. It came as a surprise to me there were things that were not being done as well as they should have been done, and I accept I should have been keeping a firmer grip of what was going on. Lord Woolf accepted I was busy doing the law and acting for my clients and doing the best I could for them and that was what I concentrated on. Now I devote a lot more time to the finance side of the firm, checking the accounts regularly and making sure everything is as it should be, and as I have so many book keepers and accountants falling all over me now, it is highly unlikely that anything can go wrong. We are all checking each other, so I cannot really believe there is another firm in Hounslow that has got quite so many people looking at the accounts and keeping it under regular control. I say that because I know a lot of the solicitors in Hounslow and I know how they work.
79. I really have worked very hard and spent a lot of money putting this in place. We have said to the Law Society that we would welcome the monitoring unit if they want to look at things and make sure everything is all right. We welcome giving them six-monthly accountant's reports, even though is has cost me money to do so. From that point of view, and also having spoken to Roger Field, as I understand the position, the condition of partnership normally imposed, you would only normally expect it to last for some three to four years depending on how serious it was. This recommendation was made more than two years ago. It does not seem unreasonable to me that maybe now some thought should be given perhaps to this condition being considered again and see whether it is fair to impose it in the light of all that has gone, of all the changes that have been made, all the lessons that have been learned and everything else.
80. I do have this problem about this condition about partnership. Mr Chohan has not been happy about the way his firm is being handed. He does feel that the Law Society is leaning on him. I saw him before Christmas and apparently there is a lot of solicitors in Hounslow who are on section 12 arrangements who have gone to him to get references so that they can apply for their practising certificate. Apparently the Law Society have rung him up and asked him why he was doing this for so many solicitors. He feels there are number of calls he is receiving from the OSS and the Law Society which makes him feel he is under the spotlight. He is becoming uneasy about that and talking in terms that, if he does link up with me, somebody who has a sort of scarred record, maybe he will be looked at more closely and so on. He feels worried about that now.
81. This condition about cheques is perhaps the icing on the cake for him because when I came away from the judgment before Lord Woolf, I said that it now looks open that we can go ahead. Once we had a copy of the judgment he seemed to feel that that was the case. I was very surprised that the Appeal Committee did look at paragraph 36 and they would not pursue that condition. Perhaps they could have found another way, if they were concerned. They could have said no to the waiver. It was only a request that he asked them to pursue. They could have thought about some other way, but there was no consultation, there was no effort to think about a way forward. You could not get any way through it. It became very frustrating that we could not finalise this partnership at the time we could. All the steam has gone out of it now. A lot of the reasons why we would have joined partnership, joined hands, is beginning to disappear. There are other people on the scene now who are talking to him as well. It has just made it all that more difficult. In Hounslow it takes a long time to talk to somebody and get to know somebody well enough to say, "We can work together". You cannot talk to everybody about it, it would be unrealistic and disingenuous to do that because you cannot seriously talk to one person and say, "I want to link hands with you", while at the same time you are talking to others about that. It has now made it very difficult for me.
82. I just want to provide a high quality service to my clients. I have a tremendous following, a huge following. I am involved in the Prince of Wales Trust, I do a lot of work for young people who are setting up business, I do a lot of charity work in the area, I take on a lot of school kids and give them work experience over the year. I sign up for that every year. I am very much part of the community and this is very much more than any of the other firms in the area because I am prepared to do it. I am prepared to be involved, whereas many people are not. This would become a dreadful shame if anything was to happen to this practice because it is the one which supported the police, the community generally, the schools, hospitals and everything. I just feel as though this condition now is unfair. Perhaps one, maybe from a Human Rights angle, would say it is unreasonable. A solicitor who paid a heavy fine, has gone through all I have gone through to satisfy all those who need to be satisfied, should be allowed to practise and if there is anything wrong with the practice let us look at it and talk about it. But this arbitrary condition about partnership seems very heavy handed.
83. LORD PHILLIPS, MR: Thank you.
84. MR FIELD: If I can deal with the second point first. You will know that the Disciplinary Tribunal made unstinting criticism of Mr Walker in its findings. I only need to mention page 13 in bundle 2 where he expressed the view that he adopted a cavalier attitude to the keeping of accounts which was wholly unacceptable. It was not therefore remarkable that when he made application for his next practising certificate there was a condition of approved partnership/employment. Lord Woolf recognised that that was an appropriate way to proceed.
85. Generally, as a matter of practice, such a condition is likely to remain on a practising certificate for 3 to 4 years. That is the norm and has previously been recognised by this honourable court. In my submission, which I put shortly in my outline argument, I would ask you to view any removal of that as premature at this stage. In effect what Mr Walker is seeking to do is to appeal to you as well as to Lord Woolf. So those are my very brief submissions on the first point.
86. LORD PHILLIPS, MR: What can the Law Society do by way of satisfying themselves that things are now running properly or not?
87. MR FIELD: If I can move on to that. What concerns the Law Society is the way in which this matter has, regrettably, dragged on. I mention in the outline argument that the condition of approved partnership was imposed some time ago. A long time has elapsed since then. What concerns me particularly, in view of what Mr Walker has said to you, is that there seems no certainty at all that the partnership with Mr Chohan will progress. It is fair to say that when the matter came before Lord Woolf last year Mr Walker did talk about the detailed negotiations which had been taking place between him and the other solicitor. But from what Mr Walker said to you today, there is no certainty that any partnership will ensue. He mentioned that Mr Chohan had gone luke warm. You have nothing in front of you by way of an affidavit, by way of a letter or anything else from Mr Chohan to indicate how he see things. Certainly from previous cases I have done in this particular forum that is rather odd. Almost inevitably there is something from the proposed partner or proposed employer, if that is the route the solicitor proposes to take, confirming that, "Yes, subject to these conditions, I am more than happy to enter into partnership with the individual". From what you have heard, the proposed partnership seems very amorphous indeed.
88. LORD PHILLIPS, MR: That is the only condition that has been approved. On the face of it, it is this requirement to sign cheques everyday.
89. MR FIELD: If I can move to that. The concern of the Law Society was inspired by the letter of 23 June, to which you referred, that the partnership would be not one of substance but one in which there was an application in relation to the accounts by the proposed partner.
90. LORD PHILLIPS, MR: I entirely follow their concern and I am not surprised they reacted to it in a manner which is designed to satisfy them that it was more than a partnership in form.
91. MR FIELD: The specific condition of more than one principal to sign cheques is a common condition.
92. LORD PHILLIPS, MR: It is a condition that is appropriate where one has concern as to whether cheques are being drawn to appropriate persons. In this case the concern was not a concern about honesty, it was a concern about general management of the accounts. I have myself had experience of situations where two people had to sign cheques and it does not always ensure that every single transaction is closely scrutinised. It can become a formality and if the object of the exercise is to make sure that Mr Chohan is aware of what is going out, it seems to me it could better be done in the kind of way I suggested, which would require him to initial a schedule on occasions, not everyday but once a week would be a more sensible arrangement. There would then be something that the Law Society could check on.
93. MR FIELD: My concern about that are these. First, overwhelmingly what I have said that there seems to be some doubt as to whether it will go ahead.
94. LORD PHILLIPS, MR: If it does not go ahead, it does not go ahead.
95. MR FIELD: Secondly, there is the problem of a busy solicitor doing litigation who might often find himself in a position from time to time where he does not go back to the office or does not go into the office.
96. LORD PHILLIPS, MR: That is why I was thinking maybe once a week would suffice.
97. MR FIELD: Certainly in principle, I would endorse your suggestion but perhaps also making clear that, when the schedule is submitted, it makes clear that the partner has in fact seen the appropriate ledger satisfying himself that the cheques are properly drawn. That might be an additional safeguard.
98. LORD PHILLIPS, MR: Seen what?
99. MR FIELD: That he has seen the copy ledger card before the cheque is signed.
100. LORD PHILLIPS, MR: I think there you are really beginning to impose an unrealistic burden. What is the kind of timeframe going to be if he has to go through all this checking on the figures.
101. MR FIELD: It is merely a suggestion. My concern and the concern of the Law Society is that both partners should be seen to take a meaningful responsibility in the matter of accounts or cheques. I am searching for a way that that can be achieved.
102. LORD PHILLIPS, MR: The fact that he has to initial his schedule makes it clear to Mr Chohan that he has a responsibility for these.
103. MR FIELD: If he is in any doubt at all, I suppose, he can always call for the ledger cards.
104. MR WALKER: My Lord, that seems to be the case my Lord. It seems that if there is a way, if I can now still discuss this matter with Mr Chohan, if he is still interested in pursuing it.
105. LORD PHILLIPS, MR: If he is not, you are likely to be in trouble.
106. MR WALKER: I would not have been in trouble some months ago had this condition not been imposed. It was not something we expected, it was not something Lord Woolf talked about. The waiver question was not something that was going to benefit me. There was no way I was going to get any benefit from asking the Law Society would they agree to a waiver for Mr Chohan. That gives me no benefit at all. I was doing it on his request, and I did not realise that it was going to give rise to this condition being imposed. The condition having been imposed, I thought on reflection the Appeals Committee might say that it is not fair, "He is going to have a partnership, the partners are going to be working together, there are rules, the rules are in place, the accounts rules and so on which both partners will have to comply with and both partners would be at risk if it was not complied with". So my view was that everything would be in place, all the checks would be there and we would be able to get on and finalise the partnership. That was not to be and it seems we have spent a lot of time talking over the last year and a half, two years. We had a lot of meetings, some four or five hours long, just chatting and talking about how we were going to work together. It all seemed very a realistic and positive idea and a very good future for both of us. I get a lot of litigation work which I cannot do because I do not have a legal aid franchise, and I do not want one, and he has a legal aid franchise and he gets a lot of conveyancing work which he cannot do and we would have worked well together. I cannot believe we have got to the stage where I had to come back before the Master of the Rolls to say, is this condition fair?It is not as if I have not been penalised and I have not paid the penalty already.
107. LORD PHILLIPS, MR: I think you are repeating the submissions you made earlier.
108. MR WALKER: All I can say is that the condition seemed unreasonable. If there is a way round it, something else which can satisfy the OSS, I would be happy to pursue that. But, having said that, I would now have to go back to Mr Chohan and see if he is still interested. Leading on from that there is this condition about partnership generally and you have heard what Mr Field has to say about that. The only thing I would add is that, if it is going to be unrealistic, if Mr Chohan is not prepared to come forward and it is going to be unrealistic in terms of releasing me from that partnership condition about finding a partner, all I suggest is that I am able to take the steps to dispose of my practice to another solicitor who wishes to take on the practice and I be given time to do that. I can then hand over the reins to another solicitor and then, as far as I am concerned, the Law Society and the OSS will not have a problem because I will not be there any more. So the way I can see the situation is that it is a great shame because I have been in the profession for over 20 years after Law School and university. I feel it is a shame that having done all that and having come as far as I have in gaining the respect I have in the community in which I am and all the rest of it, I have been in the City and so on, it seems that all I can do is bow out of it. I do not feel I can continue to take the pressure I have been taking from the OSS because every time you agree something they find some other way of imposing some other condition, and you cannot talk to partners realistically in an open handed way and say this is what the situation is because you just do not know what is round the corner. I realise now that, having gone through the whole adjudicator, committee, appeal situation, before the Master of the Rolls several times now, I can see there is now way out of the circle. Once you are in that vicious circle you cannot get out of it. I paid my penalty four years ago when this first arose. It has been embarrassing enough, it was in the local press, a lot of people read about it. Fortunately all my clients stayed with me because they knew the reality of the situation was that I had not taken anybody's money and I had always worked very hard for my clients and honestly for my clients. So, I just feel I do not want to go on fighting an organisation which does not seem to want me there. It might be as well, if I am given the appropriate time, to dispose of the practice. That might be the way forward. It would save Mr Field and the organisation he represents a great deal of trouble because they will not have to come back here again because I will sell up and disappear.
109. MR FIELD: Can I just say that, if you are minded to go along with the variation of the condition as you have indicated, the present position is that he is in breach of the present condition on his certificate. In view of the time passage and given that he has had very extensive talks with his proposed partner, I would ask that, perhaps, you give a short period of time in which he be allowed to pursue partnership. By a short period of time, I mean, perhaps, one month.
110. LORD PHILLIPS, MR: Thank you. I will give judgment.