England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
DIVISIONAL COURT

		Royal Courts of Justice Strand London WC2
		11th December 2003

1. LORD JUSTICE ROSE: This is an appeal by Mr Stokes, a solicitor brought under section 49 of the Solicitors Act 1974 against the decision of a Solicitor's Disciplinary Tribunal which on 22nd April 2003 gave written reasons, following a hearing on 17th and 18th March 2003, for finding the appellant guilty of conduct unbefitting a solicitor in three respects. He was fined £5,000 and reprimanded.
2. In many respects, this is an unusual case. The circumstances are by no means commonly found, and the course which events took prior to and at the Tribunal hearing were by no means straightforward.
3. The relevant facts, in so far as they are common ground, are that the appellant was admitted as a solicitor in 1967, and since 1975 he has specialised in "dry shipping" cases. Between June 1990 and May 1992 he was in partnership with William A Crump. For a short period thereafter he was a self-employed consultant, and from October 1993 he was in sole practice.
4. In November 1978, there was a shipping collision at Port Said. One of the vessels involved was the COMARA. Part of the COMARA's cargo was insured by a Hamburg company of underwriters called Nordstern. They, in May 1980, had to pay over approximately US$40,000 towards the cost of repairs to the COMARA. In January 1985, in a London Collision Arbitration, the COMARA's owners recovered the greater part of the cost of the COMARA's repairs from the owners of the other vessels involved in the collision. Nordstern became entitled to reimbursement.
5. Their London agents, Internav, obtained the monies due to the COMARA's cargo underwriters but, it was said, spent it for their own purposes. In 1988, the COMARA's underwriters discovered this, and their German collection agent, Gustav Ziegler, sought redress from Internav. They, Gustav Ziegler, appointed London-based insurance recovery services, IRS, to coordinate the recovery proceedings.
6. A Mr Bentley, a solicitor experienced in relation to shipping law, had until 1988 been himself a director of Internav. In April 1990, he approached the appellant asking him to act as solicitor for IRS. The appellant told the Tribunal that he agreed to act on the basis that he received his instructions from Bentley, whom he knew to be a solicitor, and on the basis that Bentley would pay the appellant's fees. He was indeed paid £500 on account of costs and, before he instituted proceedings, he joined in partnership with William A Crump, the firm to which I have referred and into whose client account the £500 was transferred in July 1990.
7. It was common in the shipping world for a solicitor to be instructed through recovery agents acting for cargo insurers without the insurers taking an active role, and for an individual solicitor to be followed by the client if he changed firms. I shall return a little later to aspects of this appeal to which that matter is of high relevance.
8. The appellant told the Tribunal that his understanding was that Bentley was acting for IRS and had agreed with Gustav Ziegler that IRS had authority to appoint a solicitor and conduct proceedings. On 13th December 1990, Nordstern wrote a letter addressed to William A Crump. It is in these terms:

"We hereby authorise you to take such proceedings whether in London or elsewhere as may be necessary to recover from Internav Ltd and/or others our proportion of the sum of US$57,754.78 recovered on behalf of cargo underwriters by Holman Fenwick & Willan together with interest/compensation for loss of use of the funds."

9. The appellant, in the name of the firm William A Crump, instituted proceedings on behalf of Nordstern against Internav by writ dated 13th February 1991.
10. The defence asserted that the monies had been received by Internav as agents and had been properly handed over to their principals. The issue in the proceedings was, therefore, whether, as Nordstern claimed, Internav held the monies paid to them as constructive trustees for Nordstern; or whether as Internav claimed, they had received the money merely as agents for another principal.
11. On that aspect, Mr Ter Haar, counsel, who appears on behalf of the appellant before this court but did not appear before the Tribunal, makes the point that the crucial documentation in the proceedings would therefore relate to Internav's relationship with their alleged principals.
12. In the course of those proceedings, by 1995, the appellant had served a total of six lists of documents without making any enquiry of Nordstern directly as to their instructions or as to any documents that they held. Also, in January 1992, there had been what the Court of Appeal on another occasion described as a collusive action whereby Mr Bentley was sued by Nordstern seeking disclosure of documents and information and, in those proceedings, Mr Bentley very quickly consented to orders in relation to those documents and otherwise being made.
13. In January 1996, the appellant, on behalf of Nordstern as plaintiffs, started another action against two named directors of Internav. The appellant told the Tribunal that he believed that the letter of 13th December 1990 was a sufficient authority for this, and that by communicating, as it is common ground he did, with Mr Bentley and/or IRS on a regular basis, he was, he believed, effectively communicating with Gustav Ziegler. It is accepted by Mr Marriott before us on behalf of the Law Society that communication with Gustav Ziegler should quite properly be regarded as being communication with Nordstern.
14. The appellant's evidence before the Tribunal was that Nordstern were what he called "the ultimate client", but that Bentley was his professional client, just as if he were instructing the appellant as his agent to appear at court.
15. The two actions against Internav and the Internav directors were fixed for trial in July 1996. It is common ground that the appellant did not notify Nordstern or Gustav Ziegler of the trial date or the issues in the case, the possibility of losing or the risks of litigation, including exposure to costs. But he did know that there was a risk in the litigation and, indeed, in April of 1996, he had written to Bentley saying that there was a substantial risk in the litigation.
16. Shortly before trial, Internav approached Nordstern with a view to settling. Agreement was reached, Nordstern withdrew the claims with no order as to costs. But Internav reserved the right in that agreement to proceed against Mr Bentley and the appellant for a wasted cost order.
17. In February 1998, the Solicitors Indemnity Fund, having taken control of the proceedings on behalf of the appellant, compromised the wasted costs claim by paying £164,000. A wasted costs order was made against Bentley following a contested hearing which he unsuccessfully appealed to the Court of Appeal, which, as I have already said, had referred to the 1992 action against Mr Bentley as collusive.
18. Sir Maurice Drake found against Bentley that he had initiated, controlled and maintained the Nordstern actions. Thereafter, the disciplinary proceedings which have culminated in the appeal to this court started at an interlocutory hearing in May 2001 on a false basis: namely that Sir Maurice Drake had made findings against the appellant. He had not.
19. This led to proceedings by the appellant by way of judicial review which culminated in the Divisional Court ordering, in December 2001, that the Law Society pay the appellant's costs of those proceedings up to 4th October 2001.
20. The disciplinary proceedings, until a few days before the hearing which took place in March of 2003, included allegations of dishonesty, fraud and deceit against the appellant. But on the Thursday before Monday 17th March, those allegations were abandoned.
21. On 17th March, Mr Stokes chose to represent himself. One thing which is abundantly clear is that he was very unwise so to do. It might well have been that, had he been represented, those representing him, faced at such short notice with a completely different case to meet, might well have sought an adjournment. But that did not happen, and matters proceeded before the Tribunal in the way I have already shortly referred to.
22. The allegations which were made against him and which the Tribunal found proved were that the appellant had been guilty of conduct unbefitting a solicitor in that:

"2.1 Contrary to Rule 1 of the Solicitors Practice Rules 1990 his professional conduct was such that it compromised or impaired or was likely to compromise or impair any of the following namely his independence or integrity; a person's freedom to instruct a solicitor of his or her choice; his duty to act in the best interests of his client; his good repute or that of his profession; his proper standard of work; and his duty to the Court.

"2.2 He accepted instructions which involved his breaching rules or principles of professional conduct.

"2.3 He acted or continued to act as a solicitor where his client could not be represented with confidence or diligence."

23. The professional standards relied on by the Law Society as supporting those allegations are to be found in chapter 8 of the "Guide for the Conduct of Solicitors, 1990". That includes the following principles. First, as set out in 8.01:

"(a) The client should be told the name and the status of the person responsible for the conduct of the matter on a day-to-day basis ... "

24. And more specifically, in 2(a):

"A client should be told in simple language at the outset of a matter or as soon as possible thereafter the issues raised and how they will be dealt with ... The client should also be informed about costs ...

"(b) The solicitor should keep his client informed both of the progress of his matter and of the reason for any serious delay which occurs ...

"(c) The solicitor should explain to the client the effect of any important and relevant document."

25. Principle 9.05 is in these terms:

"Where instructions are received not from a client but from a third party purporting to represent that client, a solicitor should obtain written instructions from the client that he wishes him to act, or in any case of doubt he should see the client or take other appropriate steps to confirm instructions."

26. Principle 9.12 says:

"A solicitor who has accepted instructions on behalf of a client is bound to carry out those instructions with diligence and must exercise reasonable care and skill."

27. Principle 13.01 says:

"A solicitor is under a duty to carry out the terms of his retainer with due care and skill, proper diligence and promptness; he must also keep his client properly informed."

28. It is common ground that matters proceeded before the Tribunal on the basis that the issue for determination was whether Nordstern were the appellant's clients. At the heart of the submission made by Mr Ter Haar to this court is the proposition that that was not the real issue for the Tribunal to address. The real issues were: first, did the appellant have authority from Nordstern; and secondly, was he under a duty to report directly to Nordstern, or was it sufficient for him to report to Bentley and IRS and also, if a specific enquiry were to be made by them, to Gustav Ziegler?
29. Mr Ter Haar submits that no suggestion is made in this case that any material information was withheld by the appellant from Bentley and/or IRS.
30. It is convenient at that point to refer to a decision of Cresswell J in Papera Traders Co Ltd And Others v Hyundai Merchant Marine Co Ltd And Another (The "Eurasian Dream") (Number 2) [2002] 2 Lloyds Law Reports 692. This was an authority to which the Tribunal was, I think, referred. In the course of giving judgment, Cresswell J rehearsed at paragraph 27 an account of market practice which had been agreed for the purposes of that case.

"In casualty cases, salvage/GA work and recovery work will often be carried out concurrently and by the same individuals or departments."

31. Then in paragraph 28:

"Salvage/GA work will include some, or all, of the following ...

"(ix) Where appropriate, instructing lawyers to represent the cargo interests in advising, dealing with salvage security, defending salvors' claims, resisting claims for contribution in GA proceedings (although some agents have legally qualified staff and may conduct arbitrations themselves).

"29. Recovery work will include some or all of the following ...

"(iv) Where appropriate, instructing lawyers to represent the cargo interests in advising, obtaining security, bringing recovery proceedings (although some recovery agents have legally qualified staff and may conduct arbitrations themselves).

"(v) Co-ordinating all of the above, reporting regularly to the interests represented and obtaining their further instructions."

32. It is also convenient to refer to an affidavit which was before the Tribunal from a Dr Joachim Bartels, who is a German lawyer, as Mr Marriott rightly points out. But there was, as I understand it, no material before the Tribunal contradicting what he said. What he said included this at paragraph 4:

"it is in my experience the usual practice of German cargo interests/charters and insurers ... to refer the matter either to a German lawyer such as myself or to a para-legal collection agency in case of recovery claims ... I understand that Nordstern did so in the present case by agreeing to the collection of the COMARA receivable by Messrs Gustav Ziegler who often act as a collection agency."

33. In paragraph 8, Dr Bartels went on to say:

"I select and retain an English solicitor known to me as having particular experience not only in shipping or insurance law ... "

34. At paragraph 9 he said:

"Whether it is a German lawyer or collection agency the cargo insurer or charterer is and remains his/its client who expects him/it to take an active role directly or indirectly in bringing the matter to a successful conclusion."

35. Then in paragraph 10, he said:

"I can say with certainty that the usual practice is for the German lawyer to be in charge of the case throughout. I am convinced that the same applies to a collection agency the more so if it works on a "no cure no pay"-basis. There is no question normally of any English solicitor being expected or permitted to report directly to or take instructions directly from the cargo insurers/charterers ... the cargo insurers/charterers are nevertheless and remain the client of the German lawyer or collection agency ... I would expect the English solicitor to look to me for his fees (and certainly not to the cargo insurers directly) and to regard me as what I believe is known in London as the "professional client" ... I would most certainly not expect him to contact my cargo insurer/charterer client direct without my permission and would certainly not retain him again if he did so."

36. It is on the basis of that material that Mr Ter Haar submits that there was, in the present case, an appropriate chain of instructions whereby the appellant received instructions from Bentley and IRS, whom he had every reason to believe were acting for Gustav Ziegler and/or Nordstern, and that, so far as the appellant was concerned, provided Mr Bentley and IRS were fully informed and, provided Gustav Ziegler were informed if they raised particular enquiries, there was nothing inappropriate in his conducting the litigation in the name of Nordstern.
37. It is at that point convenient to refer to a document which it is common ground was not brought to the attention of the Tribunal, although it was one of very many documents that were in bundles available to the Tribunal. I mention, in passing, that, if the documents before the Tribunal were in an order resembling that in which they are presented in the binders before this court, the Tribunal cannot have found it easy to make their way through the relevant documents and to identify those which were of particular materiality, without specific guidance.
38. The document which I have referred to as "red 215" was a letter dated 7th August 1996 from Mr Hussey of IRS to Gustav Ziegler. It is unnecessary to rehearse the full terms of that letter, but the crucial paragraph for present purposes is to be found at page 215, and is in these terms:

"I understand that Holmes Hardingham's position is that the instructions given to William A Crump in 1990 were terminated in January 1993. The position in fact was that the file was transferred to Mr Stokes from William A Crump when he moved to his new firm of Hughes Hooker and it was clear from those instructions that the file was intended for him personally to handle through Hughes Hooker or whichever firm he subsequently joined. In the event, he of course set up on his own account as Richard Stokes & Co. I would refer you also to our fax of 31st March 1994 and to our telephone conversation when we advised you of this fact. Since that time, however, we have expended both considerable time, effort and money in bringing this matter to a position where as you yourself appreciated, the defendants were extremely agitated and were pressing for a settlement."

39. What is apparent from that letter is that IRS at that time were communicating with Gustav Ziegler in relation to the conduct of the proceedings which had taken place.
40. The further submission made by Mr Ter Haar is that there is absent from these proceedings against the appellant complaint of any kind by Nordstern or Gustav Ziegler. There is no sign that any communication has ever been made by the Law Society in connection with the prosecution of the appellant as to their attitude to the suggestion that they were not being kept informed appropriately in relation to the conduct of these proceedings.
41. Mr Ter Haar points out that, although Stephenson Harwood (who were the solicitors acting for Internav in connection with the litigation) complained to the office for the supervision of solicitors about Mr Bentley, leading to the findings by Sir Maurice Drake to which we have referred on one aspect of this matter, and leading to admissions being made by Mr Bentley before the same Solicitors Disciplinary Tribunal which tried the appellant, and although Stephenson Harwood's letter of complaint about Mr Bentley did contain a reference to Mr Stokes's name, no complaint was made by them about him.
42. At that point, I turn to the findings made by the Disciplinary Tribunal.
43. At page 2, there appears the following:

"The evidence before the Tribunal included the admissions of Mr Bentley on the basis that his conduct was such that it compromised or impaired his independence, his good repute or that of the solicitors' profession and his duty to the Court on the basis that Mr Bentley had been misguided in his involvement with the "Comara" case and went far beyond what a normal witness would do."

44. Whatever the status may be of Mr Bentley's admissions in relation to him, it is plain that they could not afford evidence against the appellant, any more than the findings of Sir Maurice Drake in relation to Mr Bentley afforded the basis for findings against the appellant.
45. The findings of the Tribunal go on:

"Mr Bentley gave oral evidence."

46. It is common ground that he did not.
47. The findings of the Tribunal at paragraph 163 state this:

"With regard to the allegations made against Mr Stokes, the nub of the matter before the Tribunal was to ascertain the client for whom Mr Stokes was acting."

48. For the reasons advanced by Mr Ter Haar, he submits that that simply was not the nub of the matter at all.
49. There follow a number of conclusions, including that at paragraph 168:

"The Tribunal finds that Nordstern was not merely the "ultimate client" but Nordstern was the client of Mr Stokes. Indeed he was on the Court record as acting (through one or other of his firms) for Nordstern, the claimant in the litigation."

50. Also rehearsed are the principles in relation to professional practice which earlier I have set out, culminating in the Tribunal's findings that Mr Stokes fell very far short of his duty to keep his client properly informed. Plainly, as it seems to me, that can only be a supportable conclusion if it be the case that Mr Stokes's communications with Bentley, IRS and Gustav Ziegler were inadequate to keep Nordstern properly informed.
51. As I have said, Mr Marriott very properly accepts before us that communication with Ziegler should properly be regarded as communication with Nordstern.
52. At that point, it is convenient to refer to a letter which is to be found in the red bundle at page 34. It is dated 3rd March 1995 from Mr Stokes to Gustav Ziegler. It is to be noted that it was originally alleged against Mr Stokes that this letter was a forgery. That allegation was among those abandoned a few days before 17th March.
53. Gustav Ziegler apparently said that they did not receive that letter, but it is also clear that, at the relevant time, they had moved their address. The significance of the letter is not whether it was received by Gustav Ziegler, but that it was written by Mr Stokes to them. It starts by saying:

"We have been asked to contact you direct by Richard Hussey of Insurance Recovery Services Ltd, who has now been posted abroad for an indefinite time."

54. It goes on to refer to a considerable amount of investigation having been undertaken by IRS in relation to the Internav directors, and it refers to Mr Stokes' surprise at the defences advanced in the proceedings. It refers to "extensive Interrogatories", which were being prepared, and indicates the absence of an alternative to pushing on steadily with the litigation hoping in the meantime to obtain some damning piece of evidence.
55. It is perfectly true, as Mr Marriott points out, that that is not a letter which is specifically seeking instructions from Gustav Ziegler as to the conduct of the litigation. But again, one returns to the current question of whether, by keeping Mr Bentley and IRS informed, the appellant can properly be regarded as having kept Nordstern informed.
56. As it seems to me, whatever the precise rights and wrongs of what occurred in this case, the approach of the Disciplinary Tribunal on the hearing of this matter was seriously flawed in a variety of ways which fatally undermine the conclusions which the Tribunal reached. As I have said, a measure of sympathy for the Tribunal is appropriate, having regard to the quantity of documentation which was before them and having regard to the fact that their attention was not drawn by anyone to, in particular, the document which I have referred to as "red 215". That said, a scrutiny of the Tribunal's reasoning displays the series of flaws to which I have referred.
57. First, Mr Bentley, contrary to what is asserted on page 2, did not give evidence before the Tribunal.
58. Secondly, contrary to what is asserted on that page, Bentley's admissions could not properly be regarded as evidence against this appellant.
59. Thirdly, on analysis, it is clear that Mr Ter Haar's submission is well-founded. The true issue was not whether Nordstern was the client, but whether it was appropriate for him to act in the way he did in relation to Nordstern on the basis of the authority, admittedly addressed to William A Crump, and by way of keeping Bentley and IRS fully informed and Gustav Ziegler informed from time to time as to the progress of the litigation.
60. Fourthly, as I have said, Mr Hussey's letter at red 215 was not drawn to the Tribunal's attention. If it had been, it may very well have affected their approach in this matter.
61. Fifthly, once the allegation of forgery had been abandoned in relation to the letter written by the appellant to Gustav Ziegler on 3rd March 1995, that letter had a significance in the case to which, as it appears from their reasons, no adequate regard was had by the Tribunal.
62. Finally, it is, as it seems to me, a matter of considerable significance that neither Nordstern nor Gustav Ziegler, whether they are properly described as "the client" or "the ultimate client", ever made any complaint about the failure of Mr Stokes to communicate with them. Whether the absence of complaint is due to the fact that they believed that they were being kept fully informed by Bentley and IRS is another matter. But no inquiry was made of them in relation to their satisfaction or otherwise with the way in which, on one interpretation of the Eurasian Number 2 case and Dr Bartels's affidavit evidence, it was appropriate for Mr Stokes to behave.
63. In those circumstances, for my part, I would allow this appeal and I would quash the findings of the Tribunal.
64. MR JUSTICE JACKSON: I agree. The charges against the appellant in their final form boil down to two main allegations. One, the appellant commenced and conducted litigation on behalf of Nordstern without proper authority. Two, the appellant failed properly or at all to communicate with his client Nordstern, but instead he wrongfully relied upon communications with agents or sub-agents of Nordstern as being sufficient.
65. It is a striking feature of this case that neither Nordstern nor Nordstern's agents have complained to the Law Society or the Office for the Supervision of Solicitors about these matters. It is also a striking feature of this case that the representatives of the Law Society who were prosecuting the appellant before the Solicitors Disciplinary Tribunal did not make enquiries of Nordstern or Nordstern's agents about what communications passed up and down the chain.
66. When the hearing took place before the Tribunal in March 2003, there appears not to have been a full investigation of the allegations against the appellant in their revised and final form. There was no proper analysis of the evidence against the appellant as opposed to the evidence against Mr Bentley, and there was no proper analysis of how that evidence impacted upon the surviving allegations against the appellant. In particular, it appears from Mr Marriott's submissions today that the letter from IRS to Ziegler dated 7th August 1996 was not drawn to the attention of the Tribunal; there was no debate about the content of that letter.
67. I think there is force in Mr Ter Haar's submission that the Solicitors Disciplinary Tribunal were made to focus upon the wrong issue, namely who was the appellant's client. See the transcript of the hearing on day one and paragraphs 163 and 168 of the Tribunal's findings.
68. The Tribunal should not be criticised unduly for the flaws in their decision. If the bundles before us today are any guide, the bundles before the Tribunal would not have been easy to follow. More importantly, in my view, the Tribunal did not receive from the parties the assistance which it was entitled to expect. In particular, the Tribunal did not have the advantage of hearing the clear and forceful submissions of Mr Ter Haar which we have received today.
69. In the result, I agree with the order proposed by my Lord, namely that the decision of the Solicitors Disciplinary Tribunal dated 22nd April 2003 should be quashed.
70. MR TER HAAR: My Lord, in the course of Rose LJ's judgment, there were a few minor slips.
71. LORD JUSTICE ROSE: Well, I am sure there were. If you tell me what they were, then the transcript will be corrected.
72. MR TER HAAR: Yes. At one point, my Lord referred in dealing with the section of monies recovered by Holman Fenwick & Willan to the German owners. I think the expression should have been German cargo underwriters. It is easily done. I think it comes at the point where you were describing the monies which Nordstern were entitled to.
73. LORD JUSTICE ROSE: I am sorry. Nordstern were the underwriters.
74. MR TER HAAR: Yes.
75. LORD JUSTICE ROSE: Did I describe them as the owners?
76. MR TER HAAR: As one point you described them as the German owners. It is an easy slip of the tongue.
77. Secondly, William A Crump. There once was a Mr Crump. I think he died in the 1930s.
78. LORD JUSTICE ROSE: I spoke of him as though he were still alive. Is that the problem? Or is he immortal?
79. MR TER HAAR: When my Lord referred to Mr Stokes going into partnership "with Mr William A Crump", it should be just "with William A Crump", because that is the name of the firm.
80. LORD JUSTICE ROSE: I see, yes.
81. MR TER HAAR: Easily done again. The third, again a very minor slip; my Lord, when referring to the judgment of this court in 2001, refers to the judgment as being in October 2001. The judgment was actually in December 2001.
82. LORD JUSTICE ROSE: But they gave the costs up to 4th October 2001.
83. MR TER HAAR: That is right. That bit of my Lord's judgment was right.
84. LORD JUSTICE ROSE: Yes. I said the judgment was in October, it was in December.
85. MR TER HAAR: I hope you do not mind my putting these matters to you.
86. LORD JUSTICE ROSE: No, I am always open to correction.
87. MR TER HAAR: I think, in particular if anyone from the firm William A Crump reads this, it is best to resolve these matters. No consequential matters.
88. I of course accept, and I accepted in my submissions, that the matter could have been put more clearly before the Tribunal. The central point of the chain of communication was firmly placed before the Tribunal, and in Mr Stokes's written submissions presented before the November hearing, it was made clear -- and perhaps I could give my Lords the references. It is in the yellow bundle, tab 6, at pages 34 and 49. It was made very clear just the exact point that I have emphasised today: that this was the chain of command.
89. However, it is right that that which one might call shortly "red 215" was not expressly drawn to the attention of the Tribunal. That is a matter which certainly, if I had been representing Mr Stokes, it would have been very much my responsibility to make sure that was put before the Tribunal. But it would be our submission that in this sort of proceedings, particularly the way in which Mr Stokes had to deal with matters, they had changed the landscape from Thursday to the Monday, it very much fell to the Law Society to make sure that those matters were clearly placed before the Tribunal so that they had the matter in the round.
90. The reason I make this submission is obviously in relation to costs. I seek my client's costs of this appeal. He has had to come here to finally clear his name. Secondly, this court has power to substitute any order for the court which may seem appropriate, and I respectfully ask you to order that the Law Society pay my client's costs of the disciplinary proceedings. As the court knows, allegations of dishonesty have been hanging over him since 1998, only withdrawn at the last moment, and even what was left then, these were serious matters and they have now finally been defeated.
91. LORD JUSTICE ROSE: I do not know. Has any order hitherto been made in relation to the costs of the abandoned dishonesty proceedings?
92. MR TER HAAR: No. Except in this sense: that in making some order as to costs, what my client was ordered to pay; fine, but also to pay two thirds of a half of the Law Society's costs, so it was reflected in a minor reduction in the amount recoverable by the Law Society. So that order obviously now falls, and there is therefore now no order in relation to costs for the proceedings below at all as a result of this court's order, and it is for this court to consider afresh what order to make. My submission is that Mr Stokes should have his costs of the disciplinary hearing.
93. LORD JUSTICE ROSE: Can I just be clear, Mr Ter Haar, because I am not at the moment.
94. MR TER HAAR: I apologise.
95. LORD JUSTICE ROSE: Was any distinction drawn in relation to costs before the Tribunal between the costs in relation to the allegations which were pursued and the costs in relation to those which were abandoned?
96. MR TER HAAR: There was no distinction drawn.
97. LORD JUSTICE ROSE: There was the order of two thirds of the half?
98. MR TER HAAR: Of the whole.
99. LORD JUSTICE ROSE: Yes.
100. MR TER HAAR: So the fact that the dishonesty allegations had been dropped was reflected in that order. Mr Bentley was ordered to pay half the costs of the Law Society. Of the remaining half, the application was for the whole of that remaining half from Mr Stokes.
101. LORD JUSTICE ROSE: Yes, and the Tribunal did succeed to the extent of two thirds.
102. MR TER HAAR: Yes.
103. MR JUSTICE JACKSON: And they expressly said at paragraph 180, "costs for the dishonesty allegations".
104. MR TER HAAR: My Lord, absolutely right.
105. LORD JUSTICE ROSE: But that order falls away as a result of our quashing the order. What you are wanting is the appellant's costs before the Tribunal. His own costs?
106. MR TER HAAR: His own costs of the disciplinary proceedings. I would submit that follows.
107. LORD JUSTICE ROSE: I am not sure that it follows, but I know that is what you are submitting.
108. MR TER HAAR: That is certainly my submission. It is certainly within the power of this court to do that. In practical terms, this has on and off been Mr Stokes' sole ability to carry out any more litigation work, he has been involved with his own appeal, for a very heavy matter put upon him, as the court can imagine. I do not suggest there should be any financial order today, clearly a matter for assessment.
109. My Lord, forgive me. Mr Stokes correctly points out that the effect of that order, apart from costs of instructing me today, basically, my Lord, he would be able to recover such costs as a litigant in person, but that is a matter for the detailed assessment.
110. LORD JUSTICE ROSE: I will not go into that. Yes.
111. MR TER HAAR: That is my submission.
112. LORD JUSTICE ROSE: Thank you. Now, Mr Marriott, as far as the costs of the appeal are concerned, you cannot resist that, can you?
113. MR MARRIOTT: The costs I cannot resist.
114. LORD JUSTICE ROSE: No. What do you say about the costs below?
115. MR MARRIOTT: I say with regard to the costs below, my Lord, that an appropriate order would be to make no further order, and I say that for these reasons: that the inordinate amount of time that has been involved in this case was because of the voluminous documents which the respondent kept on producing. We ended up with 12 lever-arch files before the first hearing, they were due to arrive on the second hearing, but then documents, more and more, appeared.
116. I accept that in so far as was possible, it was my duty to draw to the attention of the Tribunal to this highlighted document, red 212. It was an oversight. I have said that. But in the context of the tens of thousands of pages of documents, many of which were duplicated and all of which the respondent, Mr Stokes, wished to control as he wished to control the documents before the court today, has ended up in a case which took far longer than might otherwise have been the case, and had he been represented, it would have been far easier to have crystallised the issues. As you have seen, my Lord, it is ridiculous. We never knew clearly what his case was.
117. My Lord, in view of all those circumstances, my submission would be that in the interest of fairness, his costs today, obviously, and no order substituting for the order that was already made for the profit of the Tribunal in the court below.
118. LORD JUSTICE ROSE: Thank you. Do you want to say anything else?
119. MR TER HAAR: There undoubtedly was a great deal of documentation floating around below, but essentially it is for the prosecution to identify the core documentation and to make sure it is in a clear format for the Tribunal to consider. In this case, if they allowed large quantities of documentation to be there, it was because the prosecution were not doing what is undoubtedly their obligation.
120. Now, it may well be that they end up with all this massive affidavit evidence that Mr Kaiser of Stephenson Harwood had not put in before, but that is in the nature of the way in which this prosecution grew. Because, as the court knows, what the OSS did was to lift the Kaiser allegations, which had become vast amounts of affidavits, et cetera, and use that as the basis for their prosecution, ultimately abandoning that approach, which of course brought in the sort of massive documentation you seem to always get in wasted costs applications.
121. It wholly flows from the way in which the case was being run, because there never was a clear approach from the prosecution saying: "This is our case, these are the minimum documents needed to prove it, here is a chronological bundle which sets it out", and to do what you would expect to come from people who start the proceedings.
122. MR JUSTICE JACKSON: Mr Ter Haar, what really flows from the submissions of both you and Mr Marriott is this: so far as the case below is concerned, the Law Society, who were bringing the prosecution, had a responsibility to place before the Tribunal an appropriate core bundle of documents upon which the Tribunal could focus, leaving on one side however many volumes and bundles Mr Stokes might produce. But when one comes to this appeal, surely this is the point at which the documentary chaos should be reflected in some discount of the costs which your client recovers.
123. Brooke LJ in Haggis(?) v the DPP has recently deplored the preparation of bundles for appeals to the Divisional Court. It was pointed out that part 52 of the CPR applies to appeals from the Divisional Court, and that, from time to time, parties are simply disregarding the practice direction in part 52 about the preparation of bundles. He went on to say that from now on, litigants could expect this court to take a much less forgiving attitude to that omission.
124. In this case, the bundles which we have been presented with are chaotic. It is quite impossible to follow events chronologically. One has to hop from bundle to bundle. Even the core bundle is in a state of chaos. So what has happened with this appeal is precisely what Brooke LJ said was going to be visited by cost sanctions.
125. MR TER HAAR: My Lord, I started with an apology this morning, so it is impossible for me to entirely distance myself from what my Lord has said. Can I put it in context in this way: first of all, the red file was always going to be a necessary file. That is Mr Stokes' own file. So far as that is concerned, if one was to see the history, it was always going to have to be an available reference bundle if nothing else in this court.
126. The yellow files consists basically of the prosecution statements, and of course they are chaotic, because of the way in which the prosecution has moved in ways that we have described. But that file, sadly, was also an inevitable file.
127. That leaves us, so far as the documentation produced by Mr Stokes is concerned, with the blue file. The blue file contains up to a point the documentation which is absolutely essential, namely the findings, and there is also ...
128. MR JUSTICE JACKSON: The core bundle is at tab two of the blue file.
129. MR TER HAAR: The core bundle is perhaps the least easy to justify. Would my Lords give me a moment?
130. LORD JUSTICE ROSE: Yes.
131. MR TER HAAR: My Lords, can I then turn to the core bundle, which is tab two of the blue bundle. I was half right. I was going to say that it was the core bundle before the Tribunal. That is not quite right, but close to it. It is those parts of the core bundle before the Tribunal that Mr Stokes believed to be relevant for this hearing but kept in the order that it had been placed before the Tribunal. But it undoubtedly has not made this court --
132. MR JUSTICE JACKSON: Was the core bundle which you prepared for the Tribunal similarly chaotically formed?
133. MR TER HAAR: No, the prosecution prepared for the Tribunal. I quite accept that in this court, the documentation should have been presented in a clearer way, and it would have made everybody's task easier.
134. MR JUSTICE JACKSON: And also the practice direction says, and again it is not your fault, that there should have been a skeleton argument which reflected rather more closely the argument we were going to hear today.
135. MR TER HAAR: I am not in any way going to back off from accepting that.
136. LORD JUSTICE ROSE: You see, on one view, because of the point my Lord is making, in particular, this case was transformed by the oral argument because we had not had a skeleton argument raising the arguments you were making. On one view, some proportion of the costs of the appeal should not accrue to the benefit of Mr Stokes. On the other hand, if he gets the costs of the appeal, it may be that he should not get any costs in the court below. How one actually seeks to achieve justice between the parties is a matter for debate.
137. MR TER HAAR: I certainly would not accept the very last part of that, that if he gets costs of the appeal he should not get any of the costs below, but I can see that it could be reflected in some form or way in the percentage of the costs awarded. Because the one thing that is undoubtedly the case is that dealing with below, he has had over the years to handle the case for dishonesty, and to handle a case which, we would submit, has not been very clearly put together on the remaining applications. He had to deal with that, and those were serious matters.
138. In this court, it is clear from Mr Marriott's arguments today, even if what I had put forward had been put forward earlier, it still would have been contested, because they went to the heart of the way in which the case was prosecuted in the court below. I also told the court that of the costs in this court, the bulk of the costs would be -- briefly I can give the court detail of what figure that is, clearly from Mr Stokes' point of view, that is something for which he would very much like to be reimbursed.
139. LORD JUSTICE ROSE: I understand that. Mr Marriott has not resisted a order in your favour so far as the costs of the appeal are concerned. That being so, the only question really that we have to decide is what order we should make in relation to the costs below.
140. MR TER HAAR: I accept that, and I can also accept my Lord Jackson J's point, that some reflection of Mr Stokes' part in that these papers were purely chaos, even if he did not -- the argument of whether or not he caused it, should be reflected. But I would submit that justice would require that some aspect of his costs from the Tribunal below should flow.
141. LORD JUSTICE ROSE: Thank you.
142. The Law Society will pay the appellant's costs of this appeal. They will also pay one third of the appellant's costs in the court below.
143. Anything else? Thank you both very much.