England and Wales High Court (Administrative Court) Decisions

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

		Royal Courts of Justice Strand, London, WC2A 2LL
		11th May 2006

Lord Justice Keene :

I will ask Mr. Justice Jack to give the first judgment.

Mr. Justice Jack:

1. Frank D'Souza, the appellant, appeals against the decision of the Solicitors Disciplinary Tribunal on 20 December 2005 that he should be subject to a financial penalty of £2,500, should pay the costs of the hearing and investigation, and should be debarred from practising as a sole practitioner with effect from 31 March 2006. The appeal is brought under section 49 of the Solicitors Act 1974.
2. The appellant was born in 1942 and was admitted as a solicitor in 1977. He has always practised as a sole practitioner in the style of John Smythe & Co, for very many years mainly from his home in Kingston-upon-Thames. It seems that his practice has always been small, and at times very small. The bar on him practising as a sole practitioner will effectively bar him from practising at all. For his situation is such that he is highly unlikely to be able to obtain employment or to find a partner or partners. So this bar is the crux of the appeal. It is as well here to recall those well-known passages in the judgment of the Master of the Rolls, Sir Thomas Bingham, at pages 518 and 519 of his judgment in Bolton v Law Society [1994] 1 WLR 512 where he sets out the need for orders such as made here not so much to punish the solicitor but to protect the public and to preserve the reputation of the solicitors' profession.
3. The hearing on 20 December 2005 was the second time that the appellant had appeared before the Tribunal. On 27 April 1989 the Tribunal had found him guilty of conduct unbefitting a solicitor in that he had failed to maintain properly written accounts contrary to Rule 11 of the Solicitors Accounts Rules 1986, and in that he had failed to deliver accountant's reports in due time for two financial years. He was fined £1,500 and ordered to pay costs. The Tribunal stated "The Tribunal think that the Law Society should give careful consideration as to whether or not this Respondent is equipped to continue in sole practice.' On 13 July 1990 the fine was reduced on appeal to this court to £500. We have not seen a copy of the judgment of the court, nor, it appears, did the Tribunal have one on 20 December 2005. It is thus not known whether the fine was reduced to reflect the appellant's financial circumstances, or because the court took a different view from the Tribunal of the seriousness of the appellant's conduct, or a combination of the two. Information was not available to the Tribunal in December 2005 or to us as to whether the Law Society did in 1989 or 1990 consider whether the appellant should be permitted to continue in sole practice. He was, however, not prevented from doing so.
4. The appellant had no further problems with the Law Society until he was subject to an investigation which commenced on 19 April 2004. The investigation was not prompted by any complaint or by information received by the Law Society about the appellant, but the appellant was chosen for investigation at random. The investigation officer was Mr Middleton-Cassini who interviewed the appellant and inspected documents. Consequent upon this a report dated 20 August 2004 was made by the Society's Head of Investigations. It was not until 16 June 2005 that proceedings were issued before the Tribunal. There were six allegations against the appellant. The first and the last were withdrawn at the hearing on 20 December 2005. The remaining four were:

1. He has failed to record his dealings with office money on the office side of client ledgers in breach of Rule 32 of the Solicitors' Accounts Rules 1998.

2. He failed to provide a client with information about costs and other matters in breach of Rule 15 of the Solicitors' Practice Rules 1990.

3. He conducted himself in a manner which was likely to compromise or impair the solicitor's duty to act in the best interest of the client contrary to Rule 1(c) of the Solicitors' Practice Rules 1990.

4. He conducted himself in a manner which was likely to compromise or impair the solicitor's proper standard of work contrary to Rule 1(e) of the Solicitors' Practice Rules 1990.

I should emphasise that no suggestion was made of dishonesty or that a client had lost money or had been disadvantaged financially.

5. On 21 July 2005 an adjudication panel of the Society's Compliance Board in the exercise of its power under section 13A of the Solicitors Act imposed immediate conditions on the appellant's practising certificate to the effect that he should deliver 6 monthly accounts within 2 months of the period to which they related and should undertake an accounts course approved by the Law Society within 6 months. The appellant's appeal to the Master of the Rolls against the imposition of these conditions is outstanding. Until March of this year the appellant took the unwise and unjustified view that as he was appealing against their imposition he was not obliged to comply with them.
6. On 13 December 2005 the appellant applied to the Tribunal for an adjournment of the hearing on 20 December, which was refused. The written reasons for the refusal are dated 19 December 2005. On the application the appellant was represented by Mr Lindsay Keith from the Solicitors Assistance Scheme. Mr Keith also represented the appellant on the appeal itself. One of Mr Keith's submissions was that he would not have time to prepare the case for a hearing on 20 December. The Tribunal considered that the paper work was minimal and the case was not difficult to understand. I record, but without seeking to make any point on it, that the constitution of the Tribunal on 13 December differed from that which heard the appeal on 20 December.
7. The case against the appellant was heard on 20 December. The appellant admitted the four remaining charges. Issues of fact nonetheless arose during the course of submissions relating to the seriousness of the defaults. But no evidence was called. At the conclusion of the hearing on 20 December 2005 the Tribunal announced its conclusions. On 3 January 2006 the appellant filed his notice of appeal. The Tribunal's written 'Findings' are dated 2 February but were not filed with the Law Society until 22 February, when they were delivered to the appellant. The Findings conclude with this sentence: 'For the avoidance of doubt the Tribunal states here that should the Respondent wish to vary the order that he shall not practice as a sole practitioner then he has liberty to apply to the Tribunal in that respect.' Nothing had been said to that effect on 20 December. It was suggested to us by Mr Michael Havard, representing the Law Society that the Tribunal may have had in mind paragraph 14 of the decision of the Master of the Rolls in Taylor v The Law Society [2005] EWCA Civ 1473. That paragraph suggests the inclusion of a 'liberty to apply' in particular circumstances, namely where an indefinite prohibition on sole practice is imposed on a practitioner who may later be able to show that the prohibition is no longer necessary, because, for example, the solicitor has learnt from being in employment or partnership. It would have been helpful if the Tribunal had indicated in its written Findings its intended purpose in giving liberty to apply.
8. The appellant did apply to vary the order by removing the bar on sole practise. His application was heard on 23 March 2006 before a differently constituted Tribunal. It refused to remove the bar. It held that it should only do so if there was sufficient new material which had not been before the first Tribunal, which, it held, there was not. That was an appropriate approach if the liberty to apply was given with Taylor in mind.
9. On 29 March 2005 Jackson J stayed the order of the Tribunal that the appellant should not act as a sole practitioner from 31 March, and gave directions for the hearing of the present appeal. He declined to make an order in effect consolidating the appeal with the appeal to the Master of the Rolls.
10. In presenting the appeal on behalf of the appellant Mr Craig Barlow raised four main matters. In my own formulation they were:

(a) that the Tribunal did not give adequate reasons for its conclusions;

(b) that the Tribunal did not act fairly in that (i) it gave no warning that it intended to rely on the previous adjudication; (ii) it gave no warning that it had in mind the imposition of a bar on sole practice; (iii) it sought no information as to the appellant's means before ordering him to pay the fine and the costs; (iv) it heard no evidence on points of dispute but did not determine them in favour of the appellant; and (v) the Tribunal did not know that the Law Society had imposed conditions on the appellant's practising certificate on 21 July 2005;

(c) that the Tribunal's imposition on the appellant of a bar on sole practice was disproportionate, that is to say, the restriction was not justified by the gravity of the appellant's conduct.

Mr Barlow also reserved for the consideration of a higher court the submission that for the purpose of Article 6 of the European Convention on Human Rights the Solicitors Disciplinary Tribunal is not an independent and impartial tribunal established by law. I will take these submissions in turn beginning with whether the Tribunal gave adequate reasons.

11. In its Findings the Tribunal set out the facts relevant to its adjudication in 16 paragraphs. These were largely a reflection of what had been found on the inspection. I can summarise them in the following way:

(a) The appellant had failed to record his dealings with office monies on the office side of side of client ledgers. This was a breach of rule 32(4) of the Solicitors Accounts Rules 1998, which provides:

'All dealings with office money relating to any client matter, or to any controlled trust matter, must be appropriately recorded in an office cash account and on the office side of the appropriate client ledger account.'

Bank reconciliations showed that client liabilities were covered by available funds but because of the absence of office side entries there was no certainty that client liabilities had been appropriately recorded. Neither the appellant nor his accountants were aware of the rule.

(b) A number of faults were found relating to the appellant's financial records relating to administration of the estate of a Mr W, together with other faults. Mrs W, the beneficiary, was a vulnerable person with a poor command of English.

(c) There was a widespread failure to provide 'client care letters' as required by the Solicitors' Costs Information and Client Care Code 1999 (given effect by rule 15 of the Solicitors' Practice Rules 1990), which included Mrs W.

(d) Attendances notes had not been made recording Mrs W's instructions as to the payment of monies and who she wished to act for her.

(e) No progress had been made with the administration since 1996. (Mrs W had returned to Thailand, where, the appellant has recently ascertained, she had died.) The estate's main asset, a house, was unsold.

The file for the W estate was the only file which was criticised by Mr Middleton-Cassini apart from the criticisms recorded at (a) and (c). It is not clear how many files he inspected.

12. In paragraphs 20 to 31 the Tribunal set out the submissions of the appellant. The first was that the appellant could immediately produce from his computer all office entries for a particular account. The Tribunal had questioned this at the hearing on the basis that, if it was so, why had it not been done and Mr Middleton-Cassini satisfied. A number of points were recorded in relation to the W estate. It was recorded that new accountants had been instructed and that it had been said that all was now well. I mention here that there were produced to us copies of an accountant's report form dated 28 April 2006 for the year to 30 October 2005. It appeared to be in due form, but Mr Havard had not had an opportunity to take full instructions on it. It can only be treated as untested.
13. In a single sentence under the heading 'The Tribunal's Findings' the Tribunal found that the four allegations had been substantiated and that the appellant had been guilty of conduct unbefitting a solicitor. The Tribunal recorded no findings in relation to the factual matters relied on by the appellant to mitigate his admitted misconduct.
14. The Tribunal then referred to the 1989 adjudication and quoted substantially from it.
15. Finally, the Tribunal stated under the heading 'The Tribunal's Decision and its Reasons':

"Whilst the Tribunal considered that the Respondent's shortcomings could be met by the imposition of a fine, the Tribunal was very concerned about the Respondent's ability to practise as a sole practitioner. The Tribunal expressed that concern in order to protect the public and to maintain the good reputation of the solicitors' profession. The Tribunal imposed the financial penalty of £2,500 on the Respondent and ordered him to pay the costs of an incidental to the investigation and enquiry, to include the costs of the investigation accountant (otherwise known as the FIO) of The Law Society.

The Tribunal further ordered that the Respondent should not practise as a sole practitioner with effect from 31^st March 2006. For the avoidance of doubt the Tribunal states here that should the Respondent wish to vary the order that he shall not practise as a sole practitioner then he has liberty to apply to the Tribunal in that respect."

16. Were the reasons adequately stated? The Tribunal stated its concern as to the breaches of the Rules, and its particular concern as to the appellant's conduct of the W estate. Although it is not stated in such terms, it is straightforward to read into the Findings the conclusion that the appellant was simply not competent to deal with the difficulties which the estate involved. In the light of those concerns it held that the protection of the public required that the appellant should not practise on his own. It had previously set out under the heading of 'facts' the failings that had been found. There is nothing said about the appellant's submissions, earlier set out in the Findings, either in so far as they consisted of fact or were submissions as to the seriousness, or lack of it, of what had occurred. In my view that is unfortunate. In short, if the submissions merited setting out, they merited dealing with - even if not at any great length. I refer in paragraph 21 below the need for the Tribunal to hear evidence on any significant issues of fact which was in dispute unless the Tribunal was prepared to accept the appellant's case on it.
17. The Tribunal apparently gave weight, perhaps considerable weight, to the 1989 adjudication. Mr Barlow submitted that warning of this possibility should have been given by the Tribunal. To my mind no warning was necessary. It should have been obvious to the appellant that it would form a part of the Tribunal's considerations, and it should have been obvious to Mr Keith who represented the appellant before the Tribunal – provided, of course, that he was adequately instructed. It would have been wrong for the Tribunal to have wholly ignored it. That said, I do think that there is a problem here. First, after Mr Keith had concluded his submissions the chairman asked the clerk whether there were any previous matters on the file. The clerk answered that there was one matter in 1988. Mr Keith then responded that that was simply a failure to deliver accounts on time, and that the appellant had taken the rap for somebody else's default. Those may have been his instructions. In fact, contrary to the impression which may have been given by the reference to the clerk, the Tribunal were well informed as to the 1989 matter, and they knew there was more to it than Mr Keith said, in particular the recommendation as to sole practice. Second, the Tribunal did not know what this court had said on appeal about the seriousness of the appellant's conduct there under consideration, nor what the Law Society did as regards the question whether the appellant should be in sole practice. At the hearing on 20 December 2005 when giving the decision of the Tribunal and the Chairman stated:

"When the allegations made against Mr D'Souza came before this Tribunal in 1989 the Tribunal said that the Law Society should give careful consideration as to whether or not he was equipped to continue in sole practice. We do not think Mr D'Souza should continue in sole practice. In passing I note that the penalty was reduced, I understand, when this matter came before the Tribunal in 1989 from £1,500 to £500. I do not think the recommendation of this Tribunal was affected in any way."

18. It may or may not be correct that the recommendation of the Tribunal was unaffected. There is no similar statement in the Findings, and it may have been appreciated that it might be wrong.
19. When Mr Keith addressed the Tribunal on behalf of the appellant he said very little about what the outcome of the proceedings should be. At the conclusion of them he simply urged the Tribunal to be as merciful as it could be to a small practitioner who 'really could not afford a large impost'. So it looks as if he was thinking only in terms of a fine. The Tribunal did not correct him and invite him to address them as to whether the appellant should be permitted to continue as a sole practitioner. As it turned out this was the most important issue which the Tribunal had to decide: but they heard no submissions upon it. Mr Keith should have been informed that it was in the Tribunal's mind and invited to address the issue.
20. Mr Barlow's next point was that the Tribunal heard no evidence as to the appellant's means before ordering him to pay £2,500 and costs. In paragraph 54 of his judgment in Camacho v Law Society delivered on 1 April 2004 [2004] EWHC 1042 (Admin) Thomas LJ referred to the Tribunal's then practice of not taking into account the means of a solicitor in awarding costs, but leaving it to the Law Society to see if the order should be enforced, which he questioned. He left the matter open in his judgment delivered on 12 July 2004 [2004] EWHC 1675 (Admin), [2004] 1 WLR 3037, at paragraph 9. I understand that when imposing a fine the Tribunal does take means into account. It is plainly right that it should. In my view it was for the appellant and Mr Keith to decide whether the Tribunal should be provided with evidence of his means so that could be taken into account by the Tribunal in relation to the amount of a fine and costs.. The Tribunal knew the size of his practice. I do not consider that there is anything in this point.
21. There were issues on which the Tribunal might have made findings for or against the appellant. One example is whether the appellant could immediately produce from his computer all office entries for a particular account and so the lack of entries on the office side of client ledgers was unimportant. Another is whether there were significant discrepancies in the figures relating to the W estate. As I have pointed out no such findings were recorded in the Findings. If the Tribunal had been of a mind to make such findings against the appellant on disputed points of significance, in accordance with the practice which is well-established in the criminal courts where a party has pleaded guilty but disputes of fact remain which are relevant to the seriousness of the offence, the Tribunal should have offered the appellant the opportunity to give evidence. I appreciate that the possibility was not raised by either advocate before the Tribunal, but in the absence of evidence there was no basis on which the Tribunal could reach a decision. However, in the absence of such findings, which is itself a criticism, this criticism has nothing on which to bite.
22. We were informed that it is the practice that the Tribunal is not informed as to any order which the Law Society has made attaching conditions to the practising certificate of a solicitor before the Tribunal. The reason is that it is thought that this might prejudice the Tribunals approach. Mr Barlow submitted that the Tribunal ought to be informed. He suggested that here it would have assisted the appellant because it showed that the Law Society did not consider that a condition that the appellant should not be in sole practice was necessary. In my view the Tribunal ought to be informed of any such conditions. There are two reasons. One is that it is part of the information that the Tribunal should have to give it the full picture in relation to sentence. Second, if it does not have it, there is a risk that conditions imposed by the Tribunal might not fit well with conditions imposed under section 13A. I do not think that such knowledge would prejudice the Tribunal in the sense of improperly influencing its decision. The Tribunal is in a different position to the Society acting under section 13A. Thus the Tribunal has its particular function established under the Act and will hear the parties and is likely also to hear evidence. If it had been considered as part of the section 13A exercise whether a bar on sole practice was necessary in the appellant's case and it had been decided on the basis of the report of 20 August 2004 that it was not, that is something which the appellant could have relied on before the Tribunal as suggesting that no such bar was needed. It is not known, however, whether that decision was reached. The Adjudication Panel may have decided that a decision on such an important issue was better left to the Tribunal. So I do not consider that the point assists the appellant.
23. The submission that the barring of the appellant from private practice was too severe a penalty, or, better put in the light of the Tribunal's reasons, was not required to protect the public, has to be considered against the conclusions which I have already reached. The approach of the court to this aspect of a decision of the Tribunal can be taken from paragraph 14 of the judgment of Rose LJ in Langford v Law Society [2002] EWHC 2802 (Admin):

"Before examining the substance of these submissions, it is necessary to identify, briefly, the approach which this court should, as it seems to me, adopt in an appeal of this kind. The classic authority as to the approach of this court is Boulton v Law Society [1994] 1 WLR 512. (To a passage in the judgement of Sir Thomas Bingham (then Master of the Rolls), I will refer later in relation to the propriety or otherwise of striking off). As to the approach, in general, which this court should adopt, it is not contested to the contrary by Mr Williams, on behalf of the Law Society, that Mr Foster's submission, based in particular on Ghosh v General Medical Council [2001] 1 WLR 1915 and MacMahon v Council of the Law Society of Scotland SLR 36, is appropriate. That is to say, in dealing with an appeal of this kind, a greater flexibility is now appropriate than was suggested in Bolton which was decided before the coming in to force of the Human Rights Act. In Ghosh at 1923, Lord Millett, giving the judgment of the Privy Council, in an appeal under the Medical Act 1983 (but, for my part, it seems that the principle should be of equal application in relation to appeals by solicitors) said this:

"The Board's jurisdiction is appellate, not supervisory. The appeal is by way of a rehearing in which the Board is fully entitled to substitute its own decision for that of the committee. The fact that the appeal is on paper and that witnesses are not called makes it incumbent upon the appellant to demonstrate that some error has occurred in proceedings before the committee or in its decision, but this is true of most appellate processes.

It is true that the Board's powers of intervention may be circumscribed by the circumstances in which they are invoked, particularly in the case of appeals against sentence. But their Lordships wish to emphasise that their powers are not as limited as may be suggested by some of the observations which have been made in the past."

Lord Millett went on to refer to Evans v General Medical Council (unreported) and just above G said this:

"For these reasons the board will accord an appropriate measure of respect to the judgment of the committee whether the practitioner's failings amount to serious professional misconduct and on the measures necessary to maintain professional standards and provide adequate protection to the public. But the Board will not defer to the committee's judgment more than is warranted by the circumstances. The counsel conceded, and their Lordships accept, that it is open to them to consider all the matters raised by Dr Ghosh in her appeal; to decide whether the sanction of erasure was appropriate and necessary in the public interest or was excessive and disproportionate; and an the latter event either to substitute some other penalty or to remit the case to the committee for reconsideration."

There is a passage to similar effecting the judgment of the Privy Council delivered by Lord Cooke of Thorndon in Preiss v General Dental Council [2001] 1 WLR 1926 at paragraph 27. In McMahon v The Council of the Law Society of Scotland Lord Gill (Lord Justice Clerk), giving the opinion of the court, having referred to Ghosh and Preiss said:

"…we must now apply a less rigorous test. We should simply look at the tribunal's decision in the light of the whole circumstances of the case, always having due respect for the expertise of the tribunal and giving to their decision such weigh as we should think appropriate."

Then at paragraph 16 he went on:

"Nevertheless, in following this approach we think that it is good sense to keep in view the obvious reasons that have been repeated over the years for according respect to the views of specialist tribunals in appeal of this kind…."

24. In Newfield v Law Society [2005] EWHC 765 (Admin) David Steel J stated in paragraph 41 that 'a professional disciplinary tribunal still remains best fitted to assess the seriousness of professional misconduct and an appellate court should be slow, save in a clear case, to interfere in the sentence of the relevant Tribunal.'
25. I have concluded that, in the light of the failings that I have regretfully found to have occurred here, the decision that the public interest requires the appellant not to practise without either a partner or any employer cannot stand. I refer to the reliance upon the Tribunal's adjudication in 1989 without knowing what view this court had taken on appeal of the Tribunal's comment and its recommendation that the Law Society consider whether the appellant was equipped to continue in sole practice; to the failure to invite Mr Keith to address the Tribunal on whether it was appropriate to impose a bar on sole practice; and to the failure to make findings upon the appellant's submissions to the Tribunal. I do not consider that this court is in a position to substitute its view of the appropriate outcome: it lacks the ability to make the necessary findings of fact; nor in this case does it have the necessary appreciation of the relevant conduct which the Tribunal has. I have therefore with considerable reluctance concluded that the case should go back to be considered by a differently constituted Tribunal. The Tribunal should also reconsider the question whether the appellant should be subjected to a fine and if so in what amount, and also the question of costs.

Lord Justice Keene :

26. I agree. One interferes with the judgment reached by a professional tribunal such as this with great reluctance, but when that judgment has been reached on a flawed basis it cannot stand. In the present case, the Tribunal was clearly influenced by the decision of the Tribunal in 1989, for it quotes extensively from it. But that decision was taken on appeal to this court and the sentence varied. This Tribunal in 2005 did not know how this court regarded the reasoning of the 1989 Tribunal, including that part of it relied on by this Tribunal. It was improper for it to place reliance on a decision taken to appeal, in the absence of the appeal judgment.
27. I also share Jack J's concerns about the absence of any indication by the Tribunal to the appellant's advocate that it had a bar on sole practice in mind and that he should address the Tribunal on that issue.
28. I would have preferred to have been able to substitute this court's own sentence for that imposed by the Tribunal, so as to avoid the expense of a further hearing. But, like Jack J., I have concluded that we are not in a position to do so. These were serious failings on the part of the appellant. It may be that, even by themselves and ignoring the 1989 decision, they might justify an order in the terms imposed by this Tribunal, but that is first and foremost a matter for a Tribunal to consider. With regret, therefore, I concur in the order proposed by Jack J.