England and Wales Court of Appeal (Civil Division) Decisions

		Royal Courts of Justice Strand, London, WC2A 2LL
		10th July 2008

Sir Anthony Clarke:

1. Mr Brandon appeals from a decision of the SRA to impose conditions on his 2007/2008 practising certificate. He also seeks or, perhaps more accurately, sought an order prohibiting the SRA from intervening in his practice. Mr Brandon also sought a stay of the conditions pending this appeal. However, that application has fallen away as this hearing has been expedited.
2. The conditions imposed on Mr Brandon's practising certificate are that:

"1    He may act as a solicitor only:

1.1    in employment or partnership; and

1.2    as a member, office holder or shareowner of an incorporated solicitor's practice.

the arrangements of which have first been approved by the Solicitors Regulation Authority.

2.   He is not a Sole Principal… of any solicitor's practice regulated by the Solicitor's Regulation Authority.

3.    If he holds clients' monies, or he is a principal of an incorporated solicitor's practice that holds clients' monies, then he shall file half yearly Accountant's Reports, such Reports to be delivered within 2 months of the end of the period to which they relate: any Cease To Hold Accountant's Report required under the Solicitors' Accounts Rules is to be delivered within 2 months of the end of the period to which it relates.

4.    Mr Brandon shall immediately inform any actual or prospective employer, partner, co-member/office holder/shareowner of these conditions and the reasons for their imposition."

3. In paragraph 2 in the part of the paragraph which I have denoted by "…" there appeared the words "partner or salaried partner". It appears that those words are a mistake and should be deleted from the condition.
4. The conditions were imposed by Ms Susan Webb, an SRA adjudicator, on 22 January 2008. Mr Brandon sought a review of that decision. In that review he also applied for approval of his status as a designated member with Mr Michael Rosenfeld in Just Lawyers LLP of Harrow. On 26 March 2008 an SRA adjudication panel dismissed his appeal from Ms Webb's decision and, acting at first instance, refused to approve his partnership with Mr Rosenfeld. An appeal from that last decision was rejected by a further panel on 13 May 2008.
5. In his present appeal Mr Brandon seeks to challenge both those decisions. The present position is that Mr Rosenfeld is no longer working with Just Lawyers LLP, which is being operated by Mr Brandon. I should say at once that, so far as I am aware, the SRA has had no complaint about the way in which Just Lawyers LLP has been operating since it began in 2006 or indeed since it has been operated by Mr Brandon and his assistant or assistants. The only point raised was that there was an Accountant's Report, which was I think delivered some four days late, which I regard as a point of no significance. It is accepted by Mr Marriott on behalf of the SRA that the Accountant's Reports reveal no breaches of the Solicitors' Accounts Rules or indeed any other relevant rules or regulations.
6. Just Lawyers LLP was set up as from about August 2006, with Mr Brandon and Mr Rosenfeld as the two designated members. Unfortunately Mr Rosenfeld left in May 2007 and went to work elsewhere and has not returned since. There is an ongoing dispute, as I understand it, between Mr Rosenfeld and Mr Brandon, which is the subject of dispute and indeed litigation elsewhere.
7. As to the appeal against the decision refusing to approve Just Lawyers LLP without Mr Rosenfeld, as I see it I do not have jurisdiction to entertain such an appeal. My jurisdiction under section 13 of the Solicitors Act 1974 is limited to an appeal against decisions to impose practice certificate conditions. It does not, as I see it, extend to decisions operating the conditions once they have been imposed.
8. I should also say a word about Mr Brandon's application for what is, in effect, injunctive relief. In his written materials Mr Brandon submits that I, as Master of the Rolls, have an inherent jurisdiction to deal with all regulatory and disciplinary matters concerning solicitors, and that that jurisdiction is wide enough to enable me to prohibit the SRA from taking any regulatory or disciplinary steps such as intervening in his practice. The SRA submits, on the other hand, that I have no such inherent jurisdiction, which would run counter to the jurisdiction created by the Solicitors Act 1974.
9. I am unable to accept Mr Brandon's submissions on this point. As I see it, the Master of the Rolls does not have inherent jurisdiction over solicitors of the kind that he suggests. On the contrary my jurisdiction is a creation of the Solicitors Act 1974 and its statutory predecessors. That jurisdiction is in this context an appellate and supervisory one and goes no wider than that. There is certainly no jurisdiction which would enable a Master of the Rolls to prohibit the SRA from taking regulatory or disciplinary action against a solicitor outside the terms of the Solicitors Act 1974. While I note that section  50 of the 1974 Act preserves the jurisdiction exercisable over solicitors before the enactment of the Supreme Court of Judicature Act 1873, there is nothing in that summary jurisdiction which assists Mr Brandon in this regard.
10. In any event, insofar as an injunction was sought pending the outcome of this appeal, the SRA undertook to take no action pending my decision in this appeal, so that it would be inappropriate to grant an injunction of that kind in any event. If the SRA were in the future to intervene in Mr Brandon's practice in a way which was unlawful on the grounds of irrationality or disproportionality or the like, any remedy would have to be obtained through the ordinary courts.
11. I turn to the history of the matter. Mr Brandon was admitted as a solicitor in 1971. It appears that he practised on his own account as "Brandons" without any difficulties until the mid-1980s when his conduct was referred to the Solicitors Disciplinary Tribunal (the "SDT"). The SDT found him to have been in breach of a number of professional conduct rules, including a failure to comply with a professional undertaking and a failure to comply with the Solicitors' Accounts Rules. It fined him £1,500 and ordered him to pay costs. His conduct was again considered by the SDT in 1994. In those proceedings he was found, amongst other things, to have practised without a practising certificate, to have failed to comply with an undertaking, to have failed to comply with the Solicitors' Accounts Rules and to have demonstrated, as the SDT, put it "a cavalier attitude to the accepted professional standards of a solicitor". The SDT suspended him from practice for two years commencing on 9 December 1994 and ordered him to pay costs. I entirely accept that all that was a long time ago.
12. Following the conclusion of those proceedings Mr Brandon did not apply for a practising certificate until the 1995/1996 practising certificate year. He was granted a certificate, subject, in effect, to one principal condition: namely that he should only act as a solicitor in employment and moreover in employment approved by the Law Society. An appeal against that decision to Lord Woolf MR failed: see Re A Solicitor No 12 of 1996.
13. Mr Brandon may have applied for a practising certificates in 1997/1998 but certainly applied for practising certificates in 1998/1999, 2002/2003, 2003/2004 and 2004/2005. Those certificates were all granted with similar conditions to those in the 1995/1996 certificate. However, while the applications for certificates were granted, they were never in fact issued because Mr Brandon was not actually in practice in those periods and thus did not pay the necessary issue fee. His application for a certificate in 2005/2006 was the first one in which not only was a certificate granted but was also issued. In that year he was granted a certificate subject to conditions which are almost identical to those in the 2007/2008 certificate which is the subject of this appeal. Mr Brandon was content at that time with those conditions. After a long time trying without success, he says because of the conditions which would have been on the face of the certificates if they had been issued, he had formed a potential relationship with Mr Rosenfeld. The reasons given by Mr Piper, as the chairman of the panel which granted the certificates subject to those conditions, were in these terms.

"The Panel had carefully considered all the documentation provided in this matter and in particular Mr Brandon's representations regarding his request that he be permitted to practice in partnership with Mr Rosenfeld. In view of Mr Brandon's conduct and previous financial and disciplinary history and his lack of recent experience as a solicitor and also as a principal of a solicitors practice, the Panel considered it necessary in the interests of maintaining public confidence in the proper regulation of solicitors that conditions be placed on Mr Brandon's practicing certificate for the time being. The conditions imposed were determined by balancing the effect of the conditions on Mr Brandon's ability to practice as a solicitor and the impact those conditions may also have on any business where he practices, whilst at the same time ensuring that when practising he does so in an environment where there is an appropriate level of supervision and support and some degree of monitoring to minimise any risks there may be to the public, given the history and lengthy absence from practicing as a solicitor referred to above. It is also important for the same reasons that Mr Brandon has up to date knowledge of the current rules and regulations affecting how a solicitor may practice. His attendance at the training courses specified should assist in this regard."

14. Mr Brandon expressly accepted in the course of argument this morning that those reasons represented a fair balance between his interests, on the one hand, and the interests of the regulator on behalf of the public, on the other. I should also add that the reference at the end to training courses was a reference to one of the conditions which was imposed on the 2006/2007 certificate. He has carried out those courses and that provision is therefore no longer necessary and is not part of the 2007/2008 conditions.
15. I think I am right in saying that there was no appeal from the conditions imposed on the 2005/2006 certificate. It is right to say, as I indicated earlier, that Mr Brandon was content with the position at that time because he entered into the LLP partnership with Mr Rosenfeld, which got under way in the course of 2006. Problems really only arose after Mr Rosenfeld left in about May 2007.
16. Mr Brandon applied for a certificate in the next year, 2006/2007. In that year he was issued with a certificate in the same terms as 2005/2006 without the reference to training courses, which had already been carried out. He also asked the SRA to approve Mr Brandon's membership with Mr Rosenfeld at Just Lawyers LLP subject to the conditions that: 1) they have one normal place of work; 2) the Law Society Regulation Unit or its successor is informed immediately of any changes to the composition or structure of the practice; and 3) that the approval and conditions are subject to review at the Law Society's discretion.
17. The adjudicator, Ms Webb, considered a request made by Mr Brandon at that time that the Law Society should consider accepting an undertaking in respect of the various matters previously imposed on his practising certificates as conditions, so that he might now be granted an unconditional practising certificate. She acknowledged Mr Brandon's concerns that a conditional practising certificate might have the effect of "compromising his business opportunities". However, she said that the Law Society's overriding duty was to take action necessary to ensure that the interests of the public and the profession are adequately protected whilst balancing that obligation against the solicitor's right to practise unfettered by unnecessary, unreasonable, inappropriate or disproportionate conditions. She carried out that balance and concluded that the conditions were necessary and proportionate. The arrangement with Mr Rosenfeld was approved. Mr Brandon appealed against the conditions on the ground that they should have been replaced by an undertaking, but that appeal failed. He did not further appeal to the Master of the Rolls at that time.
18. We now arrive at the 2007/2008 practising certificate to which I have referred. Ms Webb carried out the same balance as previously and concluded that the conditions should remain. It does not appear that she was asked to consider an undertaking in lieu of the conditions at that time. As to the position of Mr Rosenfeld, some information had been placed before her including a statement from Mr Rosenfeld dated 22 November 2007 and a letter from a Ms Chern dated 30 November 2007. Ms Webb said that she acknowledged that Mr Brandon took issue with the statements in those documents, which she said were the subject of a separate inquiry by the SRA, and said that it was not appropriate to draw any conclusions in respect of any matters in dispute.
19. Mr Brandon appealed to the adjudication panel, as I have indicated, and his appeal failed. They said that they thought that there was nothing in the Grounds of Appeal to persuade them to alter the decision reached by the adjudicator at first instance and added that they were satisfied that it remained appropriate and necessary in the public interest for Mr Brandon to be permitted to practise as a solicitor only with supervision and support for the time being, and concurred with the reasoning of the adjudicator. As I have indicated they also considered the position of Mr Rosenfeld and they expressed their conclusion as follows:

"The Panel considered his application for approval of membership with Mr Michael Richard Rosenfeld in Just Lawyers LLP and RESOLVED to refuse the application.

REASONS

The Panel have no information before them as to whether or not Mr Rosenfeld would ever return to the practice but the Panel were satisfied that even if Mr Rosenfeld were to return to the practice their decision to refuse the application was appropriate in the public interest. The Panel had noted Mr Rosenfeld's absence from the practice and that there was a dispute at present as to whether or not he remained a member of Just Lawyers LLP. The dispute was to be determined by due legal process, the outcome of which the Panel could not pre-judge. However, even if the Court determined that Mr Rosenfeld remained associated in any way with Just Lawyers LLP or Mr Rosenfeld decided to return to the practice, the Panel was not satisfied that Mr Rosenfeld could provide a sufficient degree of supervision or control in respect of Mr Brandon's practice as a solicitor"

20. As I indicated earlier, an appeal from that part of the decision was subsequently rejected on 13 May. Again as I indicated earlier, as I see it I have no power to review that decision. I have, however, in any event been told that Mr Rosenfeld has not returned to Just Lawyers LLP and, so far as I understand it, there is no real likelihood that he ever will.

Mr Brandon's submissions.

21. In his written materials Mr Brandon sets out a considerable number of points in a somewhat discursive way. I say that without disrespect to him. First, he complains about some aspects of the SDT proceedings. However, I should say at once that, as was indeed previously held by Lord Woolf on Mr Brandon's 1996 appeal, it is not possible for me to go behind the SDT's findings in this appeal. As Lord Woolf noted, the sole matter of relevance for this appeal  is  whether the SRA could properly conclude that it was inappropriate  to  impose  conditions on his present practising certificate: see Re a Solicitor No 12 of 1996 at paragraph 3.
22. Secondly, Mr Brandon relies upon the Divisional Court's decision in Camacho v The Law Society [2004] EWHC 1675 and the decision of the Court of Appeal in Taylor v The Law Society [2005] EWCA Civ 1473. He submits that they establish that practising certificate conditions should be imposed only for a finite period of time. The SDT, he says, decided not to impose practising certificate conditions. In those circumstances the SRA either ought not as a matter of principle to have imposed practising conditions on his present practising certificate or at least ought not to have done so for an indefinite period of time.
23. Thirdly, he submits that the SRA's decision was flawed because it relied upon evidence supplied by Ms Chern. However, I see no force in that conclusion. On the contrary the adjudicator made it clear that she was not having regard to points in a document, for example, from Ms Chern which Mr Brandon disputed.
24. Fourthly, he submits that there must come a time when he can practise with an unfettered certificate.
25. Fifthly, he submits that it would be improper or inappropriate for the SRA to intervene in his practice. As to this last point I have already indicated that I have no jurisdiction to deal with any such possibility, but so far as I see it the SRA has not intervened or indeed purported to take steps to intervene in the practice.
26. Finally and perhaps most importantly, the essential thrust of Mr Brandon's submissions as they were put to me this morning was this: he says that he has tried over a very long time, indeed I think he would say some years, to find someone with whom he could go into partnership or by whom he could be employed, but he is thwarted by the conditions on the face of the certificate -- although it is fair to say that of course only means certificates (conditions?) on the face of the certificate in comparatively recent times -- but nevertheless he says that potential partners or employers are, as he puts it, "spooked" by the existence of the conditions. And indeed he is very concerned by the situation as it stands at present. I have seen an exchange of letters on 20 and 30 June between Mr Brandon and the SRA. In a letter of 20 June he asked for the SRA's consent that he be employed by a lady called Ava Walters who is in practice as a solicitor, but he adds that his negotiations with her were, as he put it:

"…all very delicate so much so that IF you were to even phone her it will spook her and she may immediately change her mind even before she has agreed to my current offer."

27. The SRA replied on 30 June, pointing out, to my mind quite reasonably, that if they are to approve a solicitor's practising arrangements they would naturally have to contact the person with whom the arrangements were being made. As I see it, there is really no alternative to the SRA contacting such a person if they are to approve the arrangements. Indeed, one of the curiosities of the situation is that Mr Brandon accepts that he will in practice have to inform anybody by whom he is employed or anyone with whom he goes into partnership of the true position, namely the regulatory history and how he has reached where he is today. And he has told me in the course of the hearing that he is not sure what the present position is in relation to Ms Walters, but that he has one or more other possible people with whom he might enter into an appropriate arrangement, but again he is concerned that if these conditions remain on his certificate they will be "spooked" and not go ahead with it. I will return to that in a moment.

The SRA's submissions

28. The SRA correctly notes that the purpose of regulation is not to punish Mr Brandon but to safeguard the public and exercise control of his practice as a means of doing so. The fundamental aim of the discretionary power to impose practising certificates is to maintain the reputation of the profession in the interests of both the profession and the public. Mr Marriott correctly submits, as I have already indicated, that it is not appropriate to go behind the decisions of the SDT. He recognises that those decisions were some time ago but he points out that Mr Brandon was not for a number of years practising as a solicitor before he began to practise with Mr Rosenfeld in 2006. As to the suggestion that the conditions could be replaced by undertakings, he submits that the adjudicator and appeal panel who considered the matter earlier were correct to hold that conditions were appropriate. It is accepted that there is now an SRA policy statement which refers, under the heading of "Practising Controls", to the fact that the SRA may be prepared to accept undertakings from solicitors that result in control of their practising arrangements in a number of different respects. It has to be said that no such undertaking was proposed to the SRA in relation to the 2007/2008 practising certificates until, I think, yesterday, and the undertaking there proposed is not to my mind in very clear terms. I do not think that that is a proper basis upon which I could allow this appeal. That is not to say that in the future some discussion might not take place between Mr Brandon and the SRA, perhaps in relation to the 2008/2009 practising certificate, to that end; that would be a matter for the SRA.
29. The central point Mr Marriott makes is that Mr Brandon was out of practice for many years and that it is now only some eighteen months or so since he recommenced practice. Mr Marriott submits that in these circumstances the SRA properly exercised its regulatory functions in imposing conditions in the public interest on his practising certificate. The conditions are the kind of conditions which are often imposed in just this kind of situation, and indeed Mr Marriott goes further. He says that the SRA, properly exercising its regulatory functions, could not but impose conditions in the public interest. Mr Marriott further submits that Mr Brandon is too pessimistic when he says that any possible employer or potential partner or designated member would be "spooked" by the mere existence of the conditions, especially since Mr Brandon himself accepts that he has no alternative but to inform any prospective employer or partner or designated member of the history of the matter. If, as I believe it to be, that is correct, then Mr Brandon has to explain the true position to any such person before entering into an arrangement with them and the SRA has no alternative but to contact any such person.
30. Mr Brandon has a number of things going in his favour. He was able to persuade Mr Rosenfeld to enter into a commercial arrangement with him and he has now been practising in the LLP for some 18 months. The regulatory history of that is good and he is no doubt able to explain to any prospective associate that he has a number of clients and that the business is going well, as he assures me it is.

Discussion

31. Well, the fundamental question in this appeal is whether the SRA could properly impose the conditions. The difficulties which Mr Brandon has had and continues to have with Mr Rosenfeld are not issues which assist in arriving at an answer to that question. It is important to note that conditions imposed by the SRA are regulatory in nature, not disciplinary. Thomas LJ provides a helpful summary of this in Camacho, where he said at paragraph 15:

"It was submitted, however, that a Tribunal ought not to exercise such power and the practice of making a recommendation to the Law Society as to the conditions on which a person should be permitted to practice should continue so that the Law Society could implement the recommendations by imposing conditions on practising certificates. In exercising those powers, the Law Society acted in accordance with the guidance given by successive Masters of the Rolls. For example, in Re  a solicitor No 6 of 1993 (transcript 23 July 1993), the then Master of the Rolls (Sir Thomas Bingham MR) stated:

'The purpose of a condition on a practising certificate is not punitive, but is intended to ensure that a solicitor who has run into trouble in a professional capacity is subject to a degree of oversight in the conduct of his professional life at least until he has demonstrated over a period that he is not in need of any such supervision to protect the public.'"

32. Sir Thomas Bingham's statement of principle has been repeated and applied on many occasions since then, see for example the Court of Appeal's decision in Awan v The Law Society [2003] EWCA Civ 1969 at 25. Regulatory conditions are imposed where they are necessary in the interests of the public and the reputation of the profession. They must not only be necessary but also reasonable and proportionate. As already stated, Mr Brandon, however, relies on Camacho and Taylor to the effect that the SRA has improperly adopted a stance whereby it imposed practising conditions indefinitely. He submits that that is wrong in principle in the light of those two decisions. He further submits that it is wrong in practice because the SDT did not itself impose or recommend the imposition of practising certificate conditions, however that is not in my judgment the effect of those cases. Camacho established at paragraph 16 that the SDT could not delegate its disciplinary function to another body such as the Law Society unless there were compelling reasons. If the SDT concluded that practising certificate conditions ought to be imposed as a sanction, it should impose such conditions itself; otherwise it should leave the matter entirely to the Law Society. The Law Society exercising its regulatory powers cannot bind itself to follow any recommendation or direction made by the SDT as to the imposition of conditions. The imposition of conditions under sections 9 to 18 of the 1974 Act was a distinct power from the disciplinary powers set out in section 46 to 54 of that Act; see Taylor at paragraphs 10 to 12.
33. It is also clear that the divisional court in Camacho held that the SDT could, if it was appropriate, impose practising certificate conditions for an indefinite term, provided that it gave a permission to apply to the SDT so that it could reconsider the conditions and vary them according to circumstances. I do not, therefore, think Camacho assists Mr Brandon. Camacho does not establish that it would be wrong in principle for the SRA to impose practising certificate conditions for an indefinite period. In any event, the SRA does not impose conditions for an indefinite period, it grants a certificate when asked to do so on an annual basis. Each year a solicitor must renew his certificate, he must make a fresh application and it is the duty of the SRA to consider each year whether to issue an unconditional certificate or a certificate subject to conditions, and, in the latter case, what those conditions should be. It has a duty to consider the conditions each year and it would be expected to have regard to the evidence of any improvement in the position as time goes by. Thus there is no question here, as I see it, of Mr Brandon's certificate being subjected to conditions indefinitely. After a time, when he has shown that supervision is no longer necessary or proportionate, the SRA would be under a duty to issue an unconditional certificate.
34. In these circumstances I see no error of principle in the approach of the SRA in the imposition of conditions on the 2007/2008 certificate. I could not characterise their decision as in any way wrong in principle or indeed in fact. I have already indicated my view that Mr Brandon's view that all possible partners and the like will be "spooked" is too pessimistic.
35. In these circumstances it seems to me that I have no alternative but to dismiss the appeal. My only real concern is this. There is no evidence, so far as I can see, that Just Lawyers LLP is operating other than entirely satisfactorily; yet it appears that, because Mr Rosenfeld left, Mr Brandon has been operating the firm now for some considerable time without a partner or, I should say, designated member. There is no evidence before me that suggests that the position is such that the SRA should take immediate steps to intervene in the operation of the firm, although it is not, of course, for me to judge that; it will be a matter for the SRA exercising its regulatory functions.
36. Mr Brandon accepts, I feel, that it is appropriate that he should operate, either with someone else, either in employment or in partnership, and it is therefore desirable that he should find somebody as soon as possible; and I simply express the hope that, unless there are good regulatory reasons for intervention, the SRA will give him time to do just that. It is obviously urgent that he take steps as soon as possible to that end. I am pleased to see that he has some possible candidates on the horizon. I see no reason why they should be "spooked", as he puts it.
37. When he comes to apply for his 2008/2009 practising certificate, he should, of course, explain the position clearly to the SRA so that they can then consider in the light of the practice of the firm whether it is appropriate to impose conditions for 2008/2009 or not, and, if it is appropriate, what those conditions should be. I hope that constructive dialogue will be possible between Mr Brandon and the SRA.
38. But for the present it appears to me that I have no alternative but to dismiss the appeal.

Order: Appeal dismissed

SIR ANTHONY CLARKE

THE MASTER OF THE ROLLS