England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(MR JUSTICE COLLINS)

		Royal Courts of Justice Strand, London, WC2A 2LL
		17 June 2003

Lord Justice Sedley:

1. This is the judgment of the court.
2. Mr Haycocks is a solicitor practising in Wellington, Shropshire. A dissatisfied client, Mr Slater, made a series of complaints, starting in August 1996, to the then Solicitors Complaints Bureau about the quality of service he had had from Mr Haycocks in connection with the buying out of the interest of his former partner, Ms Williams, in two properties, one in England and one in France. He also complained that Mr Haycocks had in 1994 moved his files from one firm to another without his, Mr Slater's, authority. In September 2000 a written agreement was reached between the two men that Mr Haycocks would return to Mr Slater the deeds to the French property, would not bill him for work done on a (separate) neighbour dispute and would forward to him all his files which Mr Haycocks still held. In return Mr Slater would regard all his complaints as resolved. The agreement was reached, as it had to be, with the approval of the Law Society.
3. Mr Haycocks broke this agreement by not returning the deeds until mid-November 2000 and by not returning the files at all. In May 2001 the Office for the Supervision of Solicitors (as it by now was) therefore reopened Mr Slater's complaint. Following a thorough report made by a caseworker, Ms Wadham, which was disclosed to Mr Haycocks but to which he declined or neglected to respond, an adjudicator, Mr Lymbury, found the complaint proved in two respects: that Mr Haycocks had broken the agreement by failing to return Mr Slater's files, and further that he had moved Mr Slater's files without permission when he changed firms. He ordered Mr Haycocks to pay compensation in the maximum sum of £5,000 to Mr Slater. This decision was upheld in its entirety by the Adjudication Panel of the OSS's Compliance Board (to whom Mr Haycocks had applied out of time for a review of the decision).
4. There is no need to go into further detail on the charges which were found proved because Mr Haycocks does not contend that there is anything amiss in the findings themselves. His case is that the OSS had no jurisdiction to entertain the renewed complaint because it related to conduct occurring after the termination of his retainer, which according to Mr Haycocks had taken place in August 1998. If this argument fails, he contends that the award of compensation was irrationally severe and that it was based on a misapprehension of at least one important fact.
5. When Mr Haycocks sought permission to apply for judicial review of the adjudication on these grounds, however, Collins J held that his application was out of time, since it had been made more than three months from the date of the panel's decision (albeit within three months of his being notified of it), and that there were no sufficient grounds for an enlargement. The latter conclusion was based in part on his view that the claim itself was unarguable in either limb. Keene LJ took the same view on the papers when Mr Haycocks sought permission to appeal to this court, but on an oral hearing following renewal Schiemann and Rix LJJ granted permission to appeal. Such a decision takes effect as a grant of permission to apply for judicial review, but since their order goes on to provide that the appeal be heard by two Lords Justices, we take it to be an order that the case proceed in this court rather than be remitted to the Administrative Court for determination: see CPR 52.15(4). We do not have any record of their reasons, but we infer from the unqualified grant of permission to apply for judicial review that they considered either that the application had been made in time or that, if not, time ought to be enlarged.

The jurisdiction of the OSS

6. Turning therefore to the first substantive issue, section 37A of the Solicitors Act 1974 as amended provides:

"Schedule 1A shall have effect with respect to the provision by solicitors of services which are not of the quality which it is reasonable to expect of them."

Paragraph 1(1) of the Schedule says:

"The Council may take any of the steps mentioned in paragraph 2 ("the steps") with respect to a solicitor where it appears to them that professional services provided by him in connection with any matter in which he or his firm have been instructed by a client have, in any respect, not been of the quality which it is reasonable to expect of him as a solicitor."

7. Mr Haycocks, who has had the assistance of counsel but has argued his case in person, submits that to impugn conduct which postdates the termination of the retainer is to read the perfect tense in the latter provision as if it were the pluperfect. We disagree. One has only to try putting "had" in place of "have" in the phrase "any matter in which he or his firm have been instructed" to see how inapt it would be. The natural and grammatical meaning of the provision is that the power applies in relation to any matter in which the solicitor or his firm have at any time been instructed.
8. The more substantial argument is that an agreement with a former client to compromise his complaint is not in any case a matter in which the solicitor concerned can be said ever to have been instructed. That may be true, but the jurisdiction embraces "professional services provided by [the solicitor] in connection with any matter in which he or his firm have been instructed". There can be no doubt (a) that the present agreement was made in connection with matters in which Mr Haycocks was formerly instructed, and (b) that it was an agreement for a professional service, namely the return of documents held by him as solicitor. Moreover, as the Law Society points out, a solicitor's services are required to include provision for dealing properly with complaints – another obligation on which the caseworker reported that Mr Haycocks had defaulted.
9. Mr Haycocks submits that all such defaults constitute professional misconduct – a disciplinary offence carrying much more severe penalties, but of which he was not accused – and nothing else. Mr Dale for the Law Society accepts the first part of the proposition but not the second. He submits, rightly in our view, that the two categories may well overlap: some substandard services may well be bad enough to amount to misconduct. That breach of an agreement of this kind might have been charged as misconduct does not mean that it cannot be charged under paragraph 1 of Schedule 1A. In our judgment the OSS was entitled as a matter of law to conclude that both the failure to return the files as had been agreed and the failure to obtain the client's authority to move his file from one firm to another represented the delivery of sub-standard professional services.

Compensation

10. The power to award compensation is given by paragraph 2(1) of the Schedule, materially:

"The steps are … (c) directing [the solicitor] to pay such compensation to the client as the Council sees fit to specify in the direction."

By paragraph 3 a maximum amount is set. By virtue of delegated legislation this stood at the material time at £5,000. The caseworker's report had noted among its concluding "important points" that such an award was made "in exceptional cases only".

11. In spite of the caseworker's recommendation that compensation should include the cost of instructing new solicitors, there was no element of special damage in the adjudicator's award. He wrote:

"I am satisfied that the blatant refusal of the solicitor to comply with an agreement reached with the Office and with Mr Slater, has caused Mr Slater significant and substantial anxiety and distress. It is continuing to have a knock-on effect, in relation to Mr Slater's domestic circumstances. The matter has not been helped by Mr Haycocks' decision not to respond to the [caseworker's] Report in any way, and to leave Mr Slater, yet again, in the dark and without resolve. It is entirely appropriate for me to compensate Mr Slater insofar as I am able, and I intend to do so by directing the sum of £5,000 to be paid to him."

The Panel upheld the award as "appropriate to reflect the degree and consequence of the inadequacy identified".

12. There is manifestly no room for a purely punitive element in an award under Schedule 1A, but equally plainly there is room for what at common law would be aggravated damages – that is to say compensation which reflects not only the stress and inconvenience caused by the misconduct but its persistence and contumacity. Such elements were present here. In particular there was evidence – contested evidence, it must be said - before the adjudicator that Mr Haycocks was still holding on to files which he had agreed to return, causing Mr Slater inconvenience in trying to reorganise his life around a new relationship. But there are also two clear indications (in paragraphs 2(j) and 3(b)) that the adjudicator mistakenly thought that Mr Haycocks had failed to return the deeds to the French property until December 2001, when – as seems clear from the documents – he had returned them, albeit belatedly, in November 2000.

Compromise

13. We asked Mr Dale to take instructions, once this error became apparent, on the OSS's willingness to reconsider the award. We adjourned the hearing for this purpose, indicating that we were against Mr Haycocks on the jurisdiction issue. The OSS has now agreed that an adjudicator should reconsider the quantum of compensation in the light of the matters touched on above. This would carry a fresh right to seek a review of the decision. Mr Haycocks has accepted this, but seeks his costs of the appeal. The Law Society proposes that each side should bear its own costs.

Costs

14. Our present view is that the fair allocation of costs is the one proposed by the Law Society. Mr Haycocks has failed on one – arguably the principal one – of his two arguments. He has succeeded on the second by the voluntary act of the Law Society, but he is entitled to say that the Law Society appeared to have no good answer to his criticism. The CPR have moved us from a winner-takes-all approach to an approach which reflects the balance of success and failure, and this, it seems to us at present, is achieved here by letting the costs of this appeal lie where they fall. If Mr Haycocks wishes to persuade us to take a different course he is entitled, on notice to the Law Society, to attend on the handing down of this judgment and make submissions: but he must keep in mind that he places himself at risk of having to pay the further costs of doing so.

Maximum awards

15. There remains the now theoretical issue of the imposition of a maximum award of compensation: by analogy perhaps with criminal sentencing, ought something to be left in reserve; or putting it another way, does the imposition of a maximum award imply (what is always a risky proposition) that there could be no worse case?
16. It is evident from the caseworker's pro forma note (see paragraph 9 above) that the OSS does not take quite so conservative an approach and that it will make a maximum award in cases it regards as exceptional. £5,000 is not a large sum, and provided due regard is had to the fact that it is the ceiling, a policy of reaching it in exceptional – that is to say particularly bad – cases is certainly not irrational in the sense propounded by Mr Haycocks of being improperly weighted against the practitioner. But such an approach may in fact be too favourable to defaulting solicitors, since it is equally arguable that £5,000 is not the top end of a prescribed scale of fault but simply a cut-off point for compensatory awards which would otherwise go higher. But we do not have to decide this question.

Conclusion

17. On the Law Society's undertaking to retake the decision under paragraph 3 of Schedule 1A in the light of what now appear to be the correct facts, I would make no order on this application for judicial review.

Lord Justice Ward:

18. I agree.