England and Wales Court of Appeal (Civil Division) Decisions

ON APPEAL FROM THE LAW SOCIETY

		Royal Courts of Justice Strand London WC2A 2LL Wednesday 19 June 2002

1. LORD PHILLIPS, MR: This is an appeal by Mr Martin against the Law Society's decision to impose a condition on his Practising Certificate for the year 2000/2001. The condition requires him to file half-yearly reports with the Law Society within two months of the end of each half year. Section 34 of the Solicitors Act 1974 requires accountants' reports to be submitted in each period of 12 months ending with 31 October, not more than six months after the end of the accounting period. Mr Martin's accounting period ends on 30 April of each year, so under section 34 his obligation is to submit accounts by 31 October of each year.
2. Mr Martin was born on 7 February 1941. He was admitted to the Roll of Solicitors on 7 June 1966. He is a sole practitioner and began to practise under the style of David Martin, Solicitor on 1 September 1977. Between March 1988 and March 1991 his accounts were delivered late, although in one year only one day late. This led the Solicitors Complaints Bureau, as it then was, to consider whether any action should be taken in relation to placing conditions on his certificate. After Mr Martin had made submissions, it was decided that he should continue to be issued with certificates without conditions, although he was rebuked for the late delivery of his reports.
3. The report for the accountancy period ending 30 April 1998 was due on 31 October 1998, but Mr Martin obtained an extension of time to 14 December 1998. Unhappily, he did not meet that deadline and only delivered the accounts for that year on 31 July 1999. When delivered the accounts were in proper order. The consequence of the late delivery of accounts, under section 12(1)(ee) of the Solicitors Act 1974, was that he was required to give notice of his next application for a Practising Certificate, and the Society was entitled to subject that certificate to such conditions as it might think fit.
4. On 17 September 1999 Mr Martin gave notice to the Law Society of his intention to apply for a Practising Certificate for the year 1999/2000. Because of his default in the timely submission of the accountant's report for the previous year, this notice was referred to the Office for the Supervision of Solicitors ("OSS"). On 22 December 1999 the Casework Subcommittee resolved that Mr Martin should be reprimanded for the late delivery of his report. His application for a Practising Certificate was referred to an adjudicator.
5. On 8 February 2000 Mr Martin was notified of the adjudicator's decision that his Practising Certificate was granted subject to the condition that he should lodge half-yearly accountants' reports to the Law Society, such reports to be delivered within two months of the period to which they related. The effect of this decision was that the provisions of section 12, as to giving notice, would continue to apply.
6. At that stage Mr Martin made no appeal against the imposition of these conditions, but on 17 November 2000, when he gave notice of his intention to apply for the Practising Certificate the year 2000/2001, he ticked the box which answered the question, "If your current Practising Certificate is conditional, please indicate whether, if appropriate, you would agree to your current conditions continuing for the next practice year", he ticked the box "No" and commented:

"The conditions are onerous and require me to file accountants' reports within 2 months of one another."

7. Notwithstanding his objection, the adjudicator determined on 23 April 2001 that the certificate should be issued subject to the same conditions. At this point Mr Martin appealed to the Review Panel against the imposition of those conditions. He made the point that his accounting books and records were currently manual. He was trying to achieve transition to computerise the accounts which would greatly ease the accounting burden. He hoped to have that in place by the end of the current financial year, but in the meanwhile he was having to work with manual accounting. In these circumstances he said that the conditions were onerous. He went on to comment that he practised as a sole practitioner; that he had no regulatory failings except for the late filing of accountants' reports; that his report for last financial year was duly filed; and that there was no evidence to suggest there was any public interest at risk.
8. By letter of 16 October 2001, Mr Martin was informed that, despite those submissions, the first instance decision was upheld. The reasons given were:

"The Review Panel carefully considered the application for review submitted by Mr D R Martin but RESOLVED to uphold the First Instance decision. The REASONS were that the Review Panel considered that as the Accountant's Reports for the period ending 30 October 2000 and 30 April 2001 were both outstanding it was inappropriate to grant Mr Martin a Practising Certificate free from conditions."

9. Mr Martin has appealed to me on the ground that the reasons given by the Review Panel, while perhaps literally correct, are not a fair representation of the position. On 16 October 2001 no accountant's report was outstanding under the provisions of section 34. The accounts for the previous accountancy year would fall due under the statute on 31 October. The two reports referred to were only said to be outstanding because of the conditions imposed on Mr Martin's certificate. As to the reports for those periods, there had been a sequence of monthly communications between Mr Martin and the Law Society. The first relevant communication was referred to the OSS. It asked for an extension for the delivery of the accountant's report for the period ending 31 October 2000.
10. Mr Boora of the Regulation Unit wrote to Mr Martin on 15 March 2000 granting the extension sought to 31 March 2001. The extension had been sought on 29 December 2000 before the period for submitting the report had expired. There seems to have been a regrettable breakdown in communication which led to the fact that the response to the request was sent to so late.
11. Thereafter, at monthly intervals, Mr Martin wrote to Diana Donnelly at the Law Society requesting a further extension of, first, the period ending on 31 October 2000 and, in due course, the subsequent six month period also, on the ground that he was awaiting the result of an appeal against the imposition of those requirements. On each occasion Diana Donnelly replied confirming that she had forwarded the request to the OSS. She added:

"If you should find that you require more time, please let me know in writing by [the expiry of the particular month's extension requested]."

12. Mr Martin has submitted to me that the effect of these letters from Diana Donnelly was to give him the impression that his request for extensions on the ground that he had an appeal pending were made on a perfectly legitimate ground and were, implicitly at least, acceptable. There was no reaction during this period from the OSS, a matter which seems to me extremely regrettable.
13. My conclusion is that Mr Martin has good ground for objecting to the only reason given by the panel for rejecting his application that the conditions should not be imposed upon his certificate. Last year's accountant's report is now outstanding. That should have been submitted by the end of October. Mr Martin has explained that the pending appeal had left him in a situation of some uncertainty as to whether he should be instructing accountants to prepare six monthly or 12 monthly accounts. That does not strike me as a satisfactory explanation, although I do accept that the facts as I have described were liable to give rise to some confusion. Mr Martin has, however, undertaken that the accounts for last year will be submitted within proper form within 28 days. If those accounts are submitted within 28 days in satisfactory form, it will follow that the accounts for the last three accountancy years have been duly submitted so far as the requirements of the statute are concerned, subject to the extension in relation to the last report. If Mr Martin complies with his undertaking, I take the view it will not be appropriate for his next certificate to be subject to any special condition as to the provision of accounts. He must then observe the normal statutory obligation which, in future, I trust he will comply with strictly, notwithstanding the burden that this may impose on him as a sole practitioner.
14. I intend to adjourn this application. If the Law Society is satisfied that Mr Martin has complied with his undertaking, they can simply indicate to my clerk that no further hearing is necessary and, in due course, Mr Martin will receive his next certificate without condition. But, if the Law Society does not consider he has complied satisfactorily with his undertaking, they can restore the matter for further consideration.