England and Wales Court of Appeal (Civil Division) Decisions

ON APPEAL FROM THE LAW SOCIETY

		Royal Courts of Justice Strand London WC2A 2LL Tuesday 23 July 2002

1. LORD PHILLIPS, MR: This is an appeal by Mr Hunt, under section 13(2)(b) of the Solicitors Act, against the Law Society's decision to issue his Practising Certificate subject to certain conditions. Mr Hunt seeks an extension of time for compliance with those conditions, not so that he can comply with them, but so that he can complete the sale of his practice in an orderly fashion. Mr Hunt also seeks a modification of the conditions to allow him to work at one branch of his former firm in an administrative, rather than a fee earning, capacity after he has disposed of the firm. When I say "disposed of the firm" that is shorthand for allowing another local practice, Canada House, to take over the lease of the firm's premises at Cromer, and to take over those of his clients who are prepared to transfer their clientele to Canada House. His petition to me was dated 31 May 2002, but he has provided details of the position as it then was in a witness statement of 18 July 2002. Further information has now been placed before me.
2. The facts are as follows. Mr Hunt qualified as a solicitor in 1981. He was one of two partners of a practice that was known both as Hunt & Co and Walter Smith & Co. There were two partners. Mr Hunt practised in the Cromer practice, which was largely a litigation practice, and his partner, Mr Whatley, practised at Sheringham, a general practice which included conveyancing but did not extend to litigation. The firm have eleven staff, including two legal executives, eight secretaries and an accountant.
3. During the latter part of his career, Mr Hunt has been the subject of numerous complaints and disciplinary proceedings. The Law Society has prepared a lengthy schedule. It starts in 1992 and presents a horrifying story of repeated shortcomings. However, I should emphasise that those shortcomings relate to administrative and accounting matters and do not involve any allegations of dishonesty.
4. In 1998 Mr Hunt was briefly suspended from practice for a failure to pay agent's fees and to comply with a direction of the Professional Regulation Subcommittee of the Compliance and Supervision Committee. Since 2000 there have been ten findings of inadequate professional services against Mr Hunt and ten references to the Solicitors' Disciplinary Tribunal. Those references still remain outstanding. Mr Hunt has accepted that this is a very poor record, but emphasised the fact that it does not include offences of dishonesty. He seeks to explain it by saying that he took on more work than he could properly handle with the office support that he had.
5. In the light of these matters, in June 2001, Mr Hunt's Practising Certificate was issued subject to various conditions, including a condition that he practises in an approved partnership of employment. By taking certain steps, including attending a management course in London, Mr Hunt obtained the approval of his present partnership as satisfying that condition. But, in December 2001, further disciplinary matters were pending, and the Office for the Supervision of Solicitors therefore recommended that his certificate should be subjected to further conditions, including a condition that he should only practise as an employed solicitor or in an approved partnership, and that approval should not be given unless there were three other partners. The OSS recommended that this condition should take effect three months after the expiry of the period for seeking a review of the decision. The regulations give seven days after notification of the decision to seek a review.
6. On 8 January 2002 the Adjudication Panel decided that they would implement that recommendation. At the same time they dealt with a number of outstanding complaints against Mr Hunt. They found that those complaints were substantially justified and referred a number of matters arising out of them to the Solicitors Disciplinary Tribunal. They gave the following reasons for the imposition of the conditions:

"In view of Mr Hunt's disciplinary history, his failure to ensure compliance with Practice Rules 1 and 15 of the Solicitors Practice Rules and his persistent failure to reply to correspondence from clients and the Office for the Supervision of Solicitors it is in the interests of the public and the good repute of the profession that he practises as a solicitor subject to a greater degree of supervision and in an environment that can provide a high level of support."

7. Mr Hunt applied for a review of the imposition of these conditions, but he did so over two months out of time. The Review Panel refused to grant an extension of time which meant that the conditions stood. In relation to the other complaints, the decisions on review were substantially upheld.
8. By letter dated 3 April 2002, the Law Society informed Mr Hunt that his new Practising Certificate for the year 2001/2002 was issued subject to the same conditions as the previous year, those conditions to be implemented by 26 April 2002, which was on or about the expiry of the three months period that had originally been allowed. By letter dated 12 April 2002, Mills & Reeve, solicitors instructed by Mr Hunt, sought a review of this decision by an adjudication panel but the sole ground of review was that Mr Hunt wanted an extension of time until 1 August 2002 in order to give him time to retire fully and make arrangements for handing over his practice. Ten days later, Mills & Reeve wrote to the OSS informing them that Mr Hunt had found a replacement solicitor and that in the circumstances an extension was only required until 1 June 2002. The letter, however, indicated that, after that date, Mr Hunt intended to continue to work for the practice in a purely administrative role. The OSS replied indicating that enforcement of the conditions would not be sought pending the review.
9. Following the review, and by letter dated 23 May 2002, the Law Society informed Mr Hunt that he had been granted an extension of time, as requested, until 1 June 2002. The letter added that he did not have permission to work for the partnership after that date. This led to a telephone conversation and a further letter dated 24 May 2002 from the Law Society confirming that the condition prevented Mr Hunt from working in his former firm in any capacity whatsoever, including in an administrative capacity. That situation results from section 1A of the Solicitors Act 1974 which provides that:

"A person who has been admitted as a solicitor and whose name is on the roll shall, if he would not otherwise be taken to be acting as a solicitor, be taken for the purposes of this Act to be so acting if he is employed in connection with the provision of any legal services-

(a) by any person who is qualified to act as a solicitor."

10. By this time, Mr Hunt had indicated that he would be petitioning by way of appeal to me, and the Law Society indicated they would not enforce the condition pending this hearing.
11. On the 24 May 2002 Mr Hunt retired as a partner with Mr Whatley, although continuing to practise as an employee. It is not clear whether he was receiving any salary for doing so.
12. So far as the extension of time is concerned, Mr Hunt has negotiated with a local firm of solicitors, Canada House, that they will take over his practice at Cromer and the lease of his premises. They will also take over those of his clients who are prepared to transfer their allegiance to Canada House.
13. Initially, I adjourned the matter so that Mrs Bromley, who acts for the Law Society, could check over the telephone with Canada House the precise position as to this proposed arrangement. She ascertained that there is no reason for apprehending that it will not go ahead, but that the agreement is not yet concluded. There are one or two matters to be clarified, including the terms of the lease of the premises and the professional indemnity provision in relation to the previous business of the partnership carried on at Cromer. I indicated that, had it been the case that it was quite clear that this transaction was to go ahead, I would be minded to grant the extension sought to enable an orderly take-over by Canada House and to give the current clients of Mr Hunt's partnership time to consider whether to transfer to the new solicitors or to make other arrangements.
14. As the position is still unclear, I have adjourned the application for an extension of the conditions until 6 August 2002, making it plain that if the Law Society is satisfied that the new firm is going to take over the practice by the end of August, and is prepared to extend the coming into force of the conditions to enable Mr Hunt to practise until the end of August to ensure a smoother transition, there will then be no need for this matter to be restored to me.
15. I now deal with the second application: that the condition prohibiting Mr Hunt from practising other than in employment or an approved partnership with, in effect, three partners should be varied to enable him to continue to perform administrative services as an employee of his erstwhile partner, Mr Whatley, at the Sheringham branch of the practice over the next two years.
16. On his behalf Mr Lomas has urged a number of matters in support of that application. The first is that the practice at Sheringham is not one that involves previous personal clients of Mr Hunt, so he will not be coming into contact with his previous clients. The practice conducts no litigation. Mr Hunt would not be in contact with any of the clients, and he would not be involved in any of the accountancy. His role would be exclusively administrative and he would even be prepared for a curfew to be imposed that would result in his only attending at the office at times when clients would not be present. Mr Hunt wishes to provide these services in order to ensure that he receives, as soon as possible, the outstanding entitlement that he has to the 50 per cent of the profit of the firm up to 24 May 2002. He is also owed some £60,000 by the partnership. He is anxious that Mr Whatley should continue to practise fruitfully in order to ensure that he receives the amount due to him.
17. Mrs Bromley, for the Law Society, resists this application for two reasons. The first is that a condition of this type is without precedent and would be impossible to draft in a manner that was satisfactory and would enable the conditions to be policed. Secondly, having regard to the nature of Mr Hunt's past record, it is not desirable that he continues to perform administrative services for the firm.
18. In my judgment both those points are well made. The shortcomings of Mr Hunt are very largely administrative. Having regard to the length and nature of his record of shortcomings, I consider that it is perfectly reasonable for the Law Society not to be prepared to permit him to be involved in his old firm in circumstances where it seems to me inevitable that he would not be receiving the degree of supervision required by the Law Society. I also consider that there would be very grave problems in drafting suitable conditions that would be capable of policing, but I consider that to be a secondary matter.
19. Accordingly, the appeal against the imposition, in due course, of these conditions with their full rigour is dismissed, but whether the imposition of the condition should be deferred until the end of August remains to be resolved. In the meantime they will be deferred until 6 August.
20. MR LOMAS: I am much obliged. Is that a firm fixture for the 6 August?
21. LORD PHILLIPS, MR: It is a firm fixture.
22. MR LOMAS: Do we have a time or will your Lordship's clerk be in touch with us?
23. LORD PHILLIPS, MR: Would 2pm be convenient?
24. MR LOMAS: My Lord, yes.
25. MRS BROMLEY: It will not be myself dealing with it, if there needs to be some change of time.
26. MR LOMAS: If matters are able to be resolved with the Law Society that the conditions can be deferred until end of August, we do not need to come back at all, but we should notify your Lordship's clerk.
27. MRS BROMLEY: The question of costs. Obviously, you have dismissed the appeal but, subject to the outstanding matters, I do have a schedule of my costs and we would make an application. A copy has been given to Mr Hunt and his advisers. I can tell you that the bottom line, including all VAT and disbursements, is £5,135.26. I can hand up the schedule. I would just make the observation that my costs are roughly half of the schedule prepared by the other side. MR LOMAS: I would resist any order for costs. I do not apply for an order for costs on behalf of Mr Hunt. In my submission it was inevitable that Mr Hunt had to come before your Lordship to deal with the question of when these conditions were going to come into effect because he remained in practice. Your Lordship has seen his witness statement, his attempts to find someone to take over and dispose of the practice. Until that happened and the Law Society intervened in the practice, he had no choice but to go on representing the clients for whom he was on the record in various courts. We have had to be here. We made great steps to resolve that issue. We will not know the result of that until 6 August.
28. The second part we have dealt with is very much a secondary matter, it has not used up more than an extra 45 minutes or so in court. In my submission, the proper order would be no order as to costs or costs to be deferred to the resumed hearing on 6 August when we know whether the first and primary part of this application has been successful or not.
29. LORD PHILLIPS, MR: I do not view the second part of application as a subsidiary matter. It was a very important matter. Obviously, the two limbs of the application overlap very much so far as the relevance of the background material is concerned. I consider the appropriate order is that Mr Hunt should pay the Law Society £5,000 costs.