ON APPEAL FROM High Court, QBD, Administrative Court
Mr Justice Holman
ON APPEAL FROM High Court, QBD, Administrative Court
Mr Justice Mostyn
Strand, London, WC2A 2LL
B e f o r e :
LADY JUSTICE SHARP
LORD JUSTICE SINGH
| David Fenton Wingate
|- and -
|Steven Edward Evans
|- and -
|The Solicitors Regulation Authority
And Between :
|Solicitors Regulation Authority
|- and -
|John Michael Malins
Mr Richard Coleman QC (instructed by Russell Cooke Solicitors) for the Respondent
On the Malins appeal, Mr Richard Coleman QC & Ms Chloe Carpenter (instructed by Russell Cooke Solicitors) for the Appellant
Ms Fenella Morris QC (instructed by RadcliffesLeBrasseur Solicitors) for the Respondent
Hearing dates: Tuesday 6th & Wednesday 7th February 2018
Crown Copyright ©
Lord Justice Rupert Jackson :
|Part 1 - Introduction||Paragraphs 2 - 6|
|Part 2 - The facts: Wingate & Evans||Paragraphs 7 - 33|
|Part 3 - The facts: Malins||Paragraphs 34 - 55|
|Part 4 - The appeal to the Court of Appeal||Paragraphs 56 -58|
|Part 5 - Honesty, integrity and related concepts||Paragraphs 59 - 107|
|Part 6 - Mr Wingate's and Mr Evans' appeal against the judgment of Mr Justice Holman||Paragraphs 108 - 137|
|Part 7 - The SRA's appeal against the judgment of Mr Justice Mostyn||Paragraphs 138 - 169|
|Part 8 - Conclusion||Paragraphs 170 -171|
1. uphold the rule of law and the proper administration of justice;
2. act with integrity;
3. not allow your independence to be compromised;
4. act in the best interests of each client;
5. provide a proper standard of service to your clients;
6. behave in a way that maintains the trust the public places in you and in the provision of legal services;
7. comply with your legal and regulatory obligations and deal with your regulators and ombudsmen in an open, timely and cooperative manner;
8. run your business or carry out your role in the business effectively and in accordance with proper governance and sound financial and risk management principles;
9. run your business or carry out your role in the business in a way that encourages equality of opportunity and respect for diversity; and
10. protect client money and assets."
"ATE" means 'after-the-event' insurance.
"FSA" means Financial Services Authority.
"LASPO" means the Legal Aid, Sentencing and Punishment of Offenders Act 2012.
"Rule 5 Statement" means statement served pursuant rule 5(2) of the Solicitors (Disciplinary Proceedings) Rules 2007.
In this Agreement, including the Schedules, the words and expressions set out below have the following meanings: …
"Eligible Legal Expenses" means the Legal Expenses relating to a Claim which is evidenced by an invoice, in form and substance the same as the form agreed in relation to that Claim prior to the first Utilisation in respect of that Claim; …
"Termination Date" means  in relation to the Facility or the Available Facility the date falling 36 months from the date of this Agreement or  in respect of a Loan, the date falling 12 months from the date of this Agreement or the Utilisation Date, whichever shall be the later …
"Utilisation" means an utilisation by the Panel Firm having requested a loan under the Facility;
"Utilisation Date" means the date of a Utilisation being the date on which the relevant Loan, as detailed in any Utilisation Request submitted by the Panel Firm, is made, and which date shall not be less than 10 Business Days prior to the date which is 12 months from the date of this Agreement …
(a) The Panel Firm shall apply the proceeds of each Loan paid to the Panel firm out of the Facility towards payment of the Eligible Legal Expenses in relation to which the Loan was requested. …
The Panel Firm shall repay all of the amounts owing in respect of each and every Loan, together with the Facilitation Fee thereto, granted under the Facility in full on the Termination Date [being 12 months from the Utilisation Date of each Loan] and without prejudice to the generality of the foregoing all amounts owing shall include all Loans, interest arising, Facilitation Fees, and Financial Guarantee Insurance Premiums
SAVE THAT the Lender may, but entirely at its discretion, at the request of the Panel Firm in relation to a Loan which is repaid in full on the Termination Date in relation to that Loan, immediately lend the Panel Firm that Loan for a further period of 12 months from the date of repayment [whereupon the Termination Date in relation to that Loan shall be at the end of that second period of 12 months] subject to:
A There being no Event of Default as at the date of such request and
B All Conditions Precedent being fulfilled and Repeating Representations confirmed by the Panel Firm as if all such conditions were restated as at the date of such request and
C The interest rate attaching to the Loan shall be 18% from the date of the Loan being re-lent until the Termination Date for that Loan and
D The Panel Firm signing such documents as shall be reasonably required by the Lender to evidence the further transaction herein described, which shall itself be regarded as a Condition Precedent
BUT in the event that such Loan is re-lent for the further period of 12 months, no further Facilitation Fee will be payable or charged by the Lender in respect of that Loan by the Panel Firm, [so that there will be only one Facilitation Fee paid by the Panel Firm for that Loan which will be at the first Utilisation date for that Loan]"
"1. The purpose for which monies may be advanced by the Lender to the Borrower under the Facility is to enable the Panel Firm to fund Claims and Legal Work for Claimants of the Panel Firm as detailed to the Lender [Client Files], together with Eligible Legal Expenses, if applicable, and a Financial Guarantee Insurance premium, together with the Facilitation Fee [all of which is more particularly mentioned and referred to in the Funding Agreement] ("the Agreed Purpose") …
1.1 The proceeds of the Facility shall be used by the Panel Firm exclusively towards the Agreed Purpose but the Lender shall not be under any obligation to verify the use to which any drawdown against the Facility is put."
i) It paid £450,000 to HBOS in settlement of the outstanding debt.
ii) It paid or allowed to be paid £300,000 to Tangerine as a facilitation fee.
iii) It paid £27,000 as the premium for a financial guarantee policy.
iv) It paid £10,000 to Mr Wingate and £10,000 to Mr Evans as dividends.
v) It paid £11,535 to Lease Direct as repayment of a loan.
vi) It paid £27,047 to HM Revenue & Customs.
vii) The sum of £64,418 was used to fund the firm's general expenses, including salaries and overheads.
1.1 In breach of Principles 2 and 6, causing or permitting the firm to accept and use the Axiom monies.
1.6 Breach of rules 17 and 20 of the Solicitors Accounts Rules 2011.
1.7 Failing to run the firm effectively in accordance with proper governance and sound management and risk management.
2.1 In breach of Principles 2 and 6, causing or permitting the firm to accept and use the Axiom monies.
2.3 Breach of Rules 17 and 20 of the Solicitors Accounts Rules.
2.4 Failing to run the firm effectively in accordance with proper governance and sound financial and risk management.
Stephen Shirley v STMC
Please find enclosed a notice of funding confirming the details of the ATE Insurance that has been taken out in respect of our client's claim.
A copy of the notice will be filed at Court in due course, as necessary.
Bond Pearce LLP"
Further to our conversation earlier this week, I attach a copy of our correspondence last year with notice of funding.
The other point which we should have made clear in our last letter is that our client is also entitled to interest on their costs, but this has been waived for the purposes of their settlement offer.
I know you are away until 8 May, but can we speak by the end of next week to confirm whether your client accepts our client's offer in relation to costs.
for and on behalf of Bond Dickinson LLP"
"1. The allegations against the Respondent, made on behalf of the SRA, are that the Respondent:
1.1. Created a Form N251 (Notice of Funding) on 2 May 2014 which he backdated to 19 March 2013, in breach of Principles 2 and/or 6 of the SRA Principles 2011.
1.2. Created a covering letter for a Notice of Funding on 2 May 2014 with a date of 19 March 2013, in breach of Principles 2 and/or 6 of the SRA Principles 2011.
1.3. Relied on and/or acquiesced in others at his firm relying on the backdated documents mentioned above from 2 May 2014 until on or around October 2014, as evidence in supporting his position when seeking to favourably negotiate a costs settlement with his opponent in litigation, in breach of Principles 1 and/or 2 and /or 6 of the SRA Principles 2011.
1.4. Dishonesty is alleged in relation to Allegation 1.3 set out above. Whilst dishonesty is alleged with respect to this allegation, proof of dishonesty is not an essential ingredient for proof of any of the allegations."
"49.12 … It was the Tribunal's understanding that the test was objective. In order to assess whether the Respondent's admittedly wrongful conduct in creating back dated documents crossed the line, as Mr Treverton-Jones put it, over into professional misconduct and constituted acting in breach of the requirement to act with integrity and to maintain public trust, the Tribunal considered that it had to consider his explanation that he had created and served originals of the covering letter and Form N251 in March 2013 and that his creation of the documents was therefore a crude form of duplication.
49.13 The Tribunal did not overlook the submission that the documents in Mr S's case ran to 12 to 14 boxes. However the information before the Tribunal was clear; there was no evidence that documentation had been sent to HD in March 2013. The Tribunal had the benefit of Mr EW's evidence about searches of the firm's systems and the Respondent's own evidence of his inability to find contemporaneous copies of any such documents. The best evidence that the Respondent could produce that the Form N251 existed in March 2013 was his own oral evidence that he had a handwritten draft of it in his daybook up until he left the firm and that he used that handwritten draft as the basis for the document he created in May 2014. He also stated that the handwritten draft was among a wad of loose documents which he asserted had disappeared from the daybook. The Tribunal considered that his reliance on the retention of a draft was suggestive that a final typewritten version was not prepared. He admitted but could give no reason why he had not retained a copy of the completed and served Form in his daybook when his evidence was that it was his practice to keep key documents in such a book for each matter. The Form N251 was certainly a key document because of the impending deadline for the change in the CPR rules. Even if the Tribunal accepted the Respondent's evidence that a handwritten draft existed and had disappeared, it undermined his credibility that he had also not added it or a copy of the final version of the Form N251 as served to the file either electronically or in hard copy. There was then the obstacle that the electronic and paper filing systems contained no copy of any contemporaneous covering letter which the Respondent asserted he was sure he had sent. In answer to this the Respondent asserted that documents were missing from the electronic file and the paper file for the relevant period. The only other evidence to support the assertion that the documents had been sent was a reference in his oral evidence by the Respondent to a time recording entry for a letter to HD on 19 March 2013. However that did not constitute proof of the contents of any such letter or that it was signed and dispatched on that day. The evidence before the Tribunal led it to conclude that a covering letter and Form N251 were not sent in March 2013 to HD.
49.14 … The Tribunal did not find credible his reliance on the possibility that HD would find the documents in its files and that it had been toying with searching for them for some nine months. It was clear by May 2014 that these documents were not suddenly going to materialise. The Respondent was an experienced lawyer in this particular field and on his own evidence had dealt with two other cases where the CPR deadline was material and where his evidence was that the Forms N251 were in existence and in play during negotiations between the parties. The Tribunal noted that he did not produce the draft to HD in May 2014 and he could not on his own evidence produce it to the Tribunal at the hearing. The Tribunal was not satisfied that the handwritten draft existed but considered that the Respondent could not simply admit to having created the backdated documents but instead used the device of the draft to justify having done so. The Tribunal considered the Respondent's explanation that there was no trace of the Form N251 on the firm's systems because he had used a program PDF Filler. Even if this were the case and it left no trace on the firm's systems of the document itself, following normal office procedure he would have created the covering letter on the firm's system but no trace could be found of that either.
49.15 The Tribunal considered that the Respondent was an experienced litigation solicitor and clearly well versed in court procedure. In a situation where it was obvious what he had to do - apply promptly to the Court for relief from sanction - because he could not prove that he had served notice of ATE funding on the other side and knew (and indeed had always acknowledged) that he had not filed notice at Court, the Respondent chose instead when costs discussions were heading to court proceedings to create two backdated documents. This was a quite deliberate act involving use of the firm's computer system to extract a heading for one of its predecessor firms which would have been in use in March 2013 and a document template. The Respondent had minimised the issues in obtaining relief from sanction in his evidence but the Tribunal considered that the outcome was far from certain thus putting him under additional pressure. The Respondent faced a further complication in that by maintaining his assertion that he genuinely believed that he had served Form N251 at the appropriate time he made it impossible to apply for relief from sanction. In respect of the facts and circumstances surrounding the creation of the two backdated documents there were simply too many factors which militated against the explanation which the Respondent had given for his actions. The Tribunal found that the Respondent's actions in creating Form N251 Notice of Funding (allegation 1.1) and a covering letter for a Notice of Funding (allegation 1.2) both on 2 May 2014 displayed a clear failure to act with integrity (Principle 2) and that he had not behaved in a way that maintained the trust the public placed in him and in the provision of legal services (Principle 6). The Tribunal accordingly found allegations 1.1 and 1.2 proved on the evidence to the required standard."
"50.31 … The e-mail of 2 May 2014 stated: "I attach a copy of our correspondence last year with notice of funding." The statement left the Respondent no room for manoeuvre. It was irrelevant whether he believed that he had sent equivalent documents in 2013 because that was not what he said in the e-mail. The documents attached were not true copies of anything sent by the Respondent or his firm to HD the previous year and he knew that. He created these documents without being able to say that they were exact replicas of what he asserted he had sent before and he accepted that in cross-examination in respect of the letter dated 19 March 2013. It was clear that the purpose of the production of the three documents was to send them to HD. However his asserted motive was to provoke HD to search their files. The Tribunal found this not to be credible; if that was his purpose he would have written in different terms. "
50.32 … The Tribunal considered that in sending the e-mail of 2 May 2014 the Respondent relied on the backdated documents as evidence in supporting his position as alleged and that in respect of the letters of 21 July 2014 and 14 August 2014 he acquiesced in others at his firm relying on them also. The correspondence formed part of a piece of litigation and in acting as he did the Tribunal found that the Respondent failed to uphold the rule of law and the proper administration of justice (Principle 1). The Tribunal also found that the Respondent acted with lack of integrity (Principle 2). Such action would also diminish the public's trust in the Respondent and the profession (Principle 6). Tribunal therefore found allegation 1.3 proved on the evidence to the required standard."
"50.41 … The Tribunal wished to make clear that it arrived at its conclusions about the allegation of dishonesty based on the Respondent's evidence and on the documents in the case. It regarded the self-report as supportive of its conclusions. Based on the evidence the Tribunal considered that by the ordinary standards of reasonable and honest people the Respondent's actions in relying on the backdated documents he had created and by acquiescing in others at the firm doing the same would be considered dishonest and that the objective test in the case of Twinsectra was satisfied.
50.42 As to the subjective test, the Tribunal considered that the Respondent found himself in the position of having made a mistake regarding non service of the Form N251 which left his firm with the potential exposure of over £181,000 in terms of the premium which had to be paid back to the client Mr S. At the very latest by May 2014 he knew that he could not prove service of the Form on HD and must have had very serious doubts about whether service had been effected. He then consciously covered up his failure and then acquiesced in the costs team innocently doing the same and continued with his denial at least in respect of the covering letter dated 19 March 2013 in the first interview with Mr Marshall on 22 October 2014. While he might not have had the S matter in the forefront of his mind over the summer he did nothing to correct the false impression which the 2 May 2014 email and attached documents on the file would have given the costs team. The Tribunal had seen and heard evidence about various medical problems of a serious nature which had affected the Respondent and also close members of his family but it had no evidence that he was incapable of realising what he was doing at the material time. Mr Marshall had testified that the Respondent had an average workload. The medical report which was before the Tribunal was undated. The Tribunal had been informed that it had been prepared in the summer of 2015 but for other purposes than these proceedings. The Respondent in evidence had expressly stated that he did not seek to rely on his personal circumstances in respect of what he did in May 2014 but rather that they affected him in the summer of that year. He had shown himself to be capable of drafting a comprehensive and well prepared self-report at the end of October and early November 2014. Furthermore he had accepted unreservedly in evidence and Mr Treverton-Jones had emphasised that there was no suggestion that he had been "leaned on" by Mr Marshall. The Tribunal found that the Respondent had a choice in May 2014 of applying to the court for relief from sanction and if that failed resorting to the firm's PI insurance in respect of his oversight but instead he chose to create and deploy backdated documents as if they were genuine copies of originals and in doing so the Respondent knew that he was being dishonest and the subjective test was therefore satisfied. Accordingly the Tribunal found dishonesty proved in respect of allegation 1.3 on the evidence to the required standard."
(i) The tribunal failed to give proper consideration to the medical evidence or Mr Malins' good character.
(ii) The tribunal wrongly made a finding of dishonesty in relation to allegations 1.1 and 1.2, when that was not pleaded.
(iii) If the SRA had pleaded dishonesty in relation to allegations 1.1 and 1.2, Mr Malins would have called further evidence to rebut that allegation.
(i) It was illogical that the Rule 5 statement did not charge Mr Malins with dishonesty in creating the documents on 2nd May 2014, but did charge him with dishonesty in deploying those documents a few minutes later.
(ii) That illogical approach led to great confusion. Accordingly the case must be re-tried.
(iii) Honesty and integrity have the same meaning. Dishonesty and lack of integrity also have the same meaning.
(iv) The statement by Holman J in SRA v Wingate and Evans that lack of integrity has a broader meaning than dishonesty is wrong. In cases where the SRA cannot prove dishonesty, they cannot sidestep the problem by alleging lack of integrity.
(v) From time to time in the hearing Mr Williams suggested that counts 1 and 2 involved dishonesty. So Mr Malins found himself facing unpleaded allegations of dishonesty. That was not fair.
(vi) In paragraphs 49.12-49.15 and 50.31-50.32 (passages quoted above) the tribunal found Mr Malins guilty of serious dishonesty in relation to counts 1.1 and 1.2, even though that had not been pleaded. Accordingly, those paragraphs of the tribunal's decision cannot stand.
(vii) The tribunal's wrongful findings of dishonesty in respect of counts 1.1 and 1.2 were the foundation of its finding of dishonesty in relation to count 1.3.
(viii) The tribunal failed to give adequate consideration to Mr Malins' good character and the medical evidence.
(ix) It would be unjust for Mr Malins to be re-tried on counts 1.1 or 1.2. Therefore he should be re-tried on count 1.3 alone, suitably re-formulated.
"In determining whether the prosecution has proved that the defendant was acting dishonestly, a jury must first of all decide whether according to the ordinary standards of reasonable and honest people what was done was dishonest. If it was not dishonest by those standards, that is the end of the matter and the prosecution fails.
If it was dishonest by those standards, then the jury must consider whether the defendant himself must have realised that what he was doing was by those standards dishonest."
"It is required of lawyers practising in this country that they should discharge their professional duties with integrity, probity and complete trustworthiness. That requirement applies as much to barristers as it does to solicitors. …
Any solicitor who is shown to have discharged his professional duties with anything less than complete integrity, probity and trustworthiness must expect severe sanctions to be imposed upon him by the Solicitors Disciplinary Tribunal. Lapses from the required high standard may, of course, take different forms and be of varying degrees. The most serious involves proven dishonesty, whether or not leading to criminal proceedings and criminal penalties. In such cases the tribunal has almost invariably, no matter how strong the mitigation advanced for the solicitor, ordered that he be struck off the Roll of Solicitors. Only infrequently, particularly in recent years, has it been willing to order the restoration to the Roll of a solicitor against whom serious dishonesty had been established, even after a passage of years, and even where the solicitor had made every effort to re-establish himself and redeem his reputation. If a solicitor is not shown to have acted dishonestly, but is shown to have fallen below the required standards of integrity, probity and trustworthiness, his lapse is less serious but it remains very serious indeed in a member of a profession whose reputation depends upon trust. A striking off order will not necessarily follow in such a case, but it may well."
"the defendant must himself appreciate that what he was doing was dishonest by the standards of honest and reasonable men."
"19. It may be asked whether the combined test is really appropriate in the present context, where one of the statutory objectives is the protection of consumers. It might be thought that a purely objective test would be a better protection. But we think it right to adopt the approach urged upon us, since it was not in dispute that we were required, as an additional matter, to consider the applicants' integrity, which both sides accepted involved the application of objective ethical standards. In our view 'integrity' connotes moral soundness, rectitude and steady adherence to an ethical code. A person lacks integrity if unable to appreciate the distinction between what is honest or dishonest by ordinary standards. (This presupposes, of course, circumstances where ordinary standards are clear. Where there are genuinely grey areas, a finding of lack of integrity would not be appropriate.)"
"… first, did Mr Bultitude act dishonestly by the ordinary standards of reasonable and honest people, and if so; secondly, was he aware that by those standards he was acting dishonestly."
"10. … Although a dishonest state of mind is a subjective mental state, the standard by which the law determines whether it is dishonest is objective. If by ordinary standards a defendant's mental state would be characterised as dishonest, it is irrelevant that the defendant judges by different standards. The Court of Appeal held this to be a correct state of the law and their Lordships agree.
11. The judge found that during and after June 1987 Mr Henwood strongly suspected that the funds passing through his hands were monies which Barlow Clowes had received from members of the public who thought that they were subscribing to a scheme of investment in gilt-edged securities. If those suspicions were correct, no honest person could have assisted Mr Clowes and Mr Cramer to dispose of the funds for their personal use. But Mr Henwood consciously decided not to make inquiries because he preferred in his own interest not to run the risk of discovering the truth.
12. Their Lordships consider that by ordinary standards such a state of mind is dishonest. The judge found that Mr Henwood may well have lived by different standards and seen nothing wrong in what he was doing."
"15. Their Lordships accept that there is an element of ambiguity in these remarks which may have encouraged a belief, expressed in some academic writing, that Twinsectra had departed from the law as previously understood and invited inquiry not merely into the defendant's mental state about the nature of the transaction in which he was participating but also into his views about generally acceptable standards of honesty. But they do not consider that this is what Lord Hutton meant. The reference to "what he knows would offend normally accepted standards of honest conduct" meant only that his knowledge of the transaction had to be such as to render his participation contrary to normally acceptable standards of honest conduct. It did not require that he should have had reflections about what those normally acceptable standards were."
"153. In our judgment, the decision of the Court of Appeal in Bultitude stands as binding authority that the test to be applied in the context of solicitors' disciplinary proceedings is the Twinsectra test as it was widely understood before Barlow Clowes. That is a test that includes the separate subjective element. The fact that the Privy Council in Barlow Clowes has subsequently placed a different interpretation on Twinsectra for the purposes of the accessory liability principle does not alter the substance of the test accepted in Bultitude and does not call for any departure from that test."
"23. … If a solicitor exhibits manifest incompetence, as, in my judgment, the appellant did, then it is impossible to see how the public can have confidence in a person who has exhibited such incompetence. It is difficult to see how a profession such as the medical profession would countenance retaining as a doctor someone who had showed himself to be incompetent. It seems to me that the same must be true of the solicitors' profession. If in a course of conduct a person manifests incompetence as, in my judgment, the appellant did, then he is not fit to be a solicitor. The only appropriate remedy is to remove him from the roll. It must be recalled that being a solicitor is not a right, but a privilege. The public is entitled not only to solicitors who behave with honesty and integrity, but solicitors in whom they can impose trust by reason of competence."
"48. As to want of "integrity", there have been a number of decisions commenting on the import of this word as used in various regulations. In my view, it serves no purpose to expatiate on its meaning. Want of integrity is capable of being identified as present or not, as the case may be, by an informed tribunal or court by reference to the facts of a particular case."
"48. The fact that the appellant was, in the event, found not to have been dishonest, plainly did not mean that it was not open to the SDT to conclude that he lacked integrity. There is an obvious distinction between the two concepts, as Mr Williams QC submits, and Mr Kendal did not argue to the contrary. A person can lack integrity without being dishonest. One example which applied here, was by being reckless as to the use of various client accounts. As the SDT found, the appellant had not enquired as to the reasons for the improper payments and transfers out of client account; he had not cared at all about what he was instructed to authorise, and he had not shown any steady adherence to any kind of ethical code. Accordingly it was not so much a case of what the appellant thought, but that he neither thought nor cared about what was required by the rules governing his profession, of which he was aware."
"45. … "Integrity" in CD3 takes its colour from the term "honesty" in CD3 and connotes probity and adherence to ethical standards, not inappropriate and offensive social or sexual behaviour."
"1) Integrity connotes moral soundness, rectitude and steady adherence to an ethical code: see Scott §§38 and 59, both citing Hoodless §19.
2) No purpose is served by seeking to expatiate on the meaning of the term. Lack of integrity is capable of being identified as present or not by an informed tribunal by reference to the facts of a particular case: see Chan §48.
3) Lack of integrity and dishonesty are not synonymous. A person may lack integrity even though not established as being dishonest."
"35. In our judgment, the Tribunal did err in failing to address the question of whether the carelessness exhibited by the Respondent in dealing with the loan money, and failing to ensure that it was only used for purposes which were permitted, was such as to amount to a breach of Principle 6 of the Principles, notwithstanding the absence of any dishonesty or any lack of integrity on his part. Furthermore, in our judgment on the facts as found by the Tribunal in this particular case, the only conclusion that the Tribunal could reach was that the conduct complained of did involve such a failure to show the care and attention to be expected of a reasonably competent solicitor as would undermine the trust and confidence that the public would place in a solicitor."
"54. I proceed on the basis, both on the authorities and as a matter of principle, that, in the field of solicitors' regulation, the concepts of dishonesty and want of integrity are indeed separate and distinct. Want of integrity arises when, objectively judged, a solicitor fails to meet the high professional standards to be expected of a solicitor. It does not require the subjective element of conscious wrongdoing."
"130. As to paragraph 54, lest Mr Williams feel that Mr Lawrence has failed to take a point which could have been argued, I ought to make it clear that, in the absence of compelling justification, I would reject Mostyn J's description of the concept of want of integrity as second degree dishonesty. Honesty, i.e. a lack of dishonesty, is a base standard which society requires everyone to meet. Professional standards, however, rightly impose on those who aspire to them a higher obligation to demonstrate integrity in all of their work. There is a real difference between them."
"60. It is plain that in Ghosh the court concluded that its compromise second leg test was necessary in order to preserve the principle that criminal responsibility for dishonesty must depend on the actual state of mind of the defendant. It asked the question whether "dishonestly", where that word appears in the Theft Act, was intended to characterise a course of conduct or to describe a state of mind. The court gave the following example, at p 1063, which was clearly central to its reasoning:
"Take for example a man who comes from a country where public transport is free. On his first day here he travels on a bus. He gets off without paying. He never had any intention of paying. His mind is clearly honest; but his conduct, judged objectively by what he has done, is dishonest. It seems to us that in using the word 'dishonestly' in the Theft Act 1968, Parliament cannot have intended to catch dishonest conduct in that sense, that is to say conduct to which no moral obloquy could possibly attach."
But the man in this example would inevitably escape conviction by the application of the (objective) first leg of the Ghosh test. That is because, in order to determine the honesty or otherwise of a person's conduct, one must ask what he knew or believed about the facts affecting the area of activity in which he was engaging. In order to decide whether this visitor was dishonest by the standards of ordinary people, it would be necessary to establish his own actual state of knowledge of how public transport works. Because he genuinely believes that public transport is free, there is nothing objectively dishonest about his not paying on the bus. The same would be true of a child who did not know the rules, or of a person who had innocently misread the bus pass sent to him and did not realise that it did not operate until after 10.00 in the morning. The answer to the court's question is that "dishonestly", where it appears, is indeed intended to characterise what the defendant did, but in characterising it one must first ascertain his actual state of mind as to the facts in which he did it. It was not correct to postulate that the conventional objective test of dishonesty involves judging only the actions and not the state of knowledge or belief as to the facts in which they were performed. What is objectively judged is the standard of behaviour, given any known actual state of mind of the actor as to the facts."
"62. Dishonesty is by no means confined to the criminal law. Civil actions may also frequently raise the question whether an action was honest or dishonest. The liability of an accessory to a breach of trust is, for example, not strict, as the liability of the trustee is, but (absent an exoneration clause) is fault-based. Negligence is not sufficient. Nothing less than dishonest assistance will suffice. Successive cases at the highest level have decided that the test of dishonesty is objective. After some hesitation in Twinsectra Ltd v Yardley  UKHL 12;  2 AC 164, the law is settled on the objective test set out by Lord Nicholls in Royal Brunei Airlines Sdn Bhd v Tan  2 AC 378: see Barlow Clowes International Ltd v Eurotrust International Ltd  UKPC 37;  1 WLR 1476, Abou-Rahmah v Abacha  EWCA Civ 1492;  Bus LR 220;  1 Lloyd's Rep 115 and Starglade Properties Ltd v Nash  EWCA Civ 1314;  Lloyd's Rep FC 102."
"74. These several considerations provide convincing grounds for holding that the second leg of the test propounded in Ghosh does not correctly represent the law and that directions based upon it ought no longer to be given. The test of dishonesty is as set out by Lord Nicholls in Royal Brunei Airlines Sdn Bhd v Tan and by Lord Hoffmann in Barlow Clowes: see para 62 above. When dishonesty is in question the fact-finding tribunal must first ascertain (subjectively) the actual state of the individual's knowledge or belief as to the facts. The reasonableness or otherwise of his belief is a matter of evidence (often in practice determinative) going to whether he held the belief, but it is not an additional requirement that his belief must be reasonable; the question is whether it is genuinely held. When once his actual state of mind as to knowledge or belief as to facts is established, the question whether his conduct was honest or dishonest is to be determined by the fact-finder by applying the (objective) standards of ordinary decent people. There is no requirement that the defendant must appreciate that what he has done is, by those standards, dishonest."
i) A sole practice giving the appearance of being a partnership and deliberately flouting the conduct rules (Emeana);
ii) Recklessly, but not dishonestly, allowing a court to be misled (Brett);
iii) Subordinating the interests of the clients to the solicitors' own financial interests (Chan);
iv) Making improper payments out of the client account (Scott);
v) Allowing the firm to become involved in conveyancing transactions which bear the hallmarks mortgage fraud (Newell-Austin);
vi) Making false representations on behalf of the client (Williams).
i) The judge erred in finding Mr Wingate in breach of Principle 6. The funding agreement was not a sham and Mr Wingate did not display manifest incompetence.
ii) The judge erred in finding Mr Wingate in breach of Principle 2. Mr Wingate did not act without integrity. The judge erred in saying that lack of integrity was a purely objective concept.
iii) The judge erred in finding that Mr Evans was in breach of Principle 6. Mr Evans was not manifestly incompetent.
iv) The judge erred in making a costs order against Mr Wingate and Mr Evans.
Grounds (i) and (ii)
"The law requires a subjective element to any finding or conclusion of dishonesty, but the question whether a person lacked integrity is objective."
"Any solicitor who signs a sham contract of this magnitude and significance in relation to a loan of £900,000 must objectively lack integrity in that regard."
"The second respondent had made adequate, if not full, inquiries."
i) The Judge erred in holding that "integrity" in Principle 2 had the same meaning as honesty.
ii) The SRA's case was not illogical or contradictory, as the judge held.
iii) In any event, that did not infect the conviction on count 1.3.
iv) The tribunal gave adequate consideration to the character evidence and the medical evidence.
v) If remitting the case to the tribunal, the Judge should have done so on the original grounds.
Grounds (ii) and (iii)
"14. It is a fundamental principle of fairness that a charge of dishonesty should be unambiguously formulated and adequately particularised."
"6. I accept the Appellant's analysis that the rules thus require the Respondent to give notice of any particular allegation being pursued against the practitioner and to particularise the facts upon which it is based and it is those facts, where disputed, which the Panel is required to determine in accordance with Rule 17(2). In so far as the Panel, at stage one of its decision process, makes material findings of fact adverse to the practitioner which could themselves have been the subject of a charge of professional misconduct, which however are not within the charges as formulated and particularised in the Notice of Hearing, then those findings in my judgment cannot properly or fairly be used by the Panel to support its findings under the Notice and in so far as the Panel has so used them, then the Notice findings are liable to be held vitiated and set aside."
"69. I do not think that I state anything novel or controversial by saying that it is an allegation (a) that should not be made without good reason, (b) when it is made it should be clearly particularised so that the person against whom it is made knows how the allegation is put and (c) that when a hearing takes place at which the allegation is tested, the person against whom it is made should have the allegation fairly and squarely put to him so that he can seek to answer it."
"24. It can be seen that the charges as framed accuse the appellant of dishonesty in relation to the deployment of the documents created on 2 May 2014 but not in relation to their creation, which as I have explained above must have occurred about seven or eight minutes before they were first deployed. In relation to their creation the appellant was accused of acting without integrity but not with dishonesty. This is intellectually virtually impossible to understand, and led to great confusion in the proceedings before the tribunal which has led me to conclude that the case must be retried."
Lady Justice Sharp:
Lord Justice Singh: