England and Wales High Court (Administrative Court) Decisions

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

		Royal Courts of Justice The Strand London WC2A 2LL
		27 July 2009

Monday 27 July 2009

LORD JUSTICE THOMAS: Mr Justice Coulson will give the first judgment.

MR JUSTICE COULSON:

1. The appellant, Frank D'Souza, was born in 1942. He was admitted as a solicitor in 1977. He appeals against the decision of the Solicitors Disciplinary Tribunal on 10 October 2007 that he should be subject to a financial penalty of £1500 and pay the costs of and incidental to the inquiry and hearing up to 20 December 2005, but not thereafter. Those costs are said to amount to just under £8,000 before assessment. The matter has a somewhat tortuous history.
2. In April 1989 the Solicitors Disciplinary Tribunal found the appellant 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 accountants' reports in due time for two financial years. He was fined £1500 and ordered to pay costs. In 1990 that fine was reduced by this court on appeal to £500.
3. In April 2004 the appellant was the subject of a random investigation by the respondent which was the subject of an investigator's report dated 20 August 2004. On 16 June 2005 proceedings were issued against the appellant before the tribunal. By the time of the hearing on 20 December 2005 there were four remaining allegations against the appellant. They were:

(1) He 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.

4. At the hearing before the Tribunal on 20 December 2005 the appellant admitted these four charges. There were, however, issues concerning the relative seriousness of the default, although it appears that, on that occasion at least, no evidence was called. At the end of the hearing the Tribunal announced its conclusions. Its Findings were not produced until February 2006.
5. The Order of the Tribunal on 20 December was in these terms:

"....[the appellant] do pay a fine of £2,500.00, such penalty to be forfeit to Her Majesty the Queen, and it further Orders that he do pay the costs of and incidental to this application and enquiry to be subject to a detailed assessment unless agreed between the parties to include the costs of the Investigation Accountant of the Law Society.

The Tribunal further Orders that the [appellant] shall not practise as a sole practitioner from 31 March 2006."

6. Although the subsequent findings of the Tribunal purported to qualify that Order by adding the proviso that the appellant had liberty to apply if he wished to vary the prohibition on him practising as a sole practitioner, it was clear that it was this aspect of the Order which, understandably, was of the greatest concern to the appellant. With the permission of the single judge he sought to vary that decision in this court.
7. In judgments handed down on 11 May 2006 this court did indeed vary the Order. In his judgment Jack J expressed his concern about a number of aspects of the Tribunal's decision-making process. It is clear that both the appellant and the court were principally exercised by the Tribunal's decision to impose, without warning, the prohibition on the appellant practising as a sole practitioner.
8. At paragraph 19 of his judgment, Jack J said:

"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."

At paragraph 25, Jack J concluded:

".... 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 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."

9. That the focus of the court's concern was on the imposition of the prohibition is made clear beyond doubt by the terms of the Order of 11 May, which was in these terms:

"IT IS ORDERED that the Appeal herein be allowed and that the Order of the Solicitors Disciplinary Tribunal dated the 20th day of December 2005 be set aside.

IT IS FURTHER ORDERED that the Solicitors Disciplinary Tribunal shall convene a full hearing and re-determine afresh the sanction to be imposed on the Appellant in respect of the allegations admitted by him at the hearing on the 20th day of December 2005 to include penalty and costs."

10. The re-hearing before the Tribunal took place on 10 July 2007. The evidence on that occasion included the admissions made by the appellant (which he did not seek to withdraw), and the oral evidence of the Forensic Investigating Officer, Mr S M Middleton-Cassini. Although the appellant argued that the Tribunal should consider re-opening its earlier findings of fact, the Tribunal rejected that submission. At paragraph 44 of its Findings, it said:

"The decision of the Divisional Court was clear that the matter was to be remitted to the Tribunal for the purposes of reconsidering sanction. The Tribunal was prepared to consider only submissions relating to the question of sanction."

11. The Order made following the re-hearing by the Tribunal on 10 July 2007 was in the following terms:

"....[the appellant] do pay a fine of £1,500.00, such penalty to be forfeit to Her Majesty the Queen, and it further Orders that he do pay the costs of and incidental to this application and enquiry up to and including the Tribunal hearing on 20 December 2005 to be subject to a detailed assessment unless agreed between the parties (to include the costs of the Investigation Accountant of the Law Society)."

It is that Order which the appellant now seeks to challenge on this appeal.

12. Before considering the eight grounds of appeal raised by the appellant, it is worth shortly summarising the relevant principles governing appeals of this kind:

(a) Prior to the Human Rights Act 1998, the general position was that it required a very strong case to interfere with a sentence imposed by a professional disciplinary committee or tribunal because they are considered to be the best people to weigh the seriousness of professional misconduct: see Bolton v Law Society [1994] 1 WLR 512.

(b) A greater flexibility than that set out in Bolton is required as a result of the Human Rights Act: see Langford v Law Society [2002] EWHC 2802 (Admin).

(c) Despite this modification, it has been said that "a professional disciplinary tribunal still remains the body best fitted to assess the seriousness of professional misconduct and an appellate court should be slow, save in a clear case, to interfere with a sentence of the relevant tribunal": see David Steel in Newfield v Law Society [2005] EWHC 765 (Admin).

13. The most recent statement on this subject can be found in the decision of the Court of Appeal in Law Society v Salsbury [2008] EWCA Civ 1285, in which Jackson LJ said that Bolton remained good law, subject to this qualification:

"30. .... In applying the Bolton principles the Solicitors Disciplinary Tribunal must also take into account the rights of the solicitor under articles 6 and 8 of the Convention. It is now an overstatement to say that 'a very strong case' is required before the court will interfere with the sentence imposed by the Solicitors Disciplinary Tribunal. The correct analysis is that the Solicitors Disciplinary Tribunal comprises an expert and informed tribunal, which is particularly well placed in any case to assess what measures are required to deal with defaulting solicitors and to protect the public interest. Absent any error of law, the High Court must pay considerable respect to the sentencing decisions of the tribunal. Nevertheless if the High Court, despite paying such respect, is satisfied that the sentencing decision was clearly inappropriate, then the court will interfere."

14. With those principles in mind, I turn to the eight grounds of appeal advanced by the appellant. I deal with ground 7 first because that is, without doubt, the appellant's best point and the issue on which his helpful oral submissions focused this morning.

Ground 7: The Appellant's Means and the Financial Orders Made

15. The first limb of the appellant's argument on this ground was that the tribunal failed to take into account his means in arriving at the amount of the fine (£1,500) and his liability for costs up to 20 December 2005 (just under £8,000 before assessment). This gives rise to three sub-issues:

(a) Should the Tribunal have taken into account the appellant's means when arriving at their decision on sanctions?

(b) If so, did they do so?

(c) If not, what are the appellant's means and what in all the circumstances is the appropriate order?

16. In Camancho v Law Society [2004] EWHC 1675 (Admin), this court declined to say whether or not the Tribunal was obliged to take into account the means of a defendant when making an order for costs. That issue was not relevant to the decision which was reached in that case. However, in the first appeal here, Jack J referred to Camancho and said this:

"20. .... 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."

17. In Merrick v Law Society [2007] EWHC 2997 (Admin), Gross J said:

"63. Thirdly, when an order is made, effectively depriving a solicitor of his livelihood, the question necessarily arises as to how any order for costs would be paid. An analogous issue arises when in a criminal case a defendant is given a custodial sentence. In my view, if an order for costs is being considered, the right course is to inquire into the means of the solicitor before coming to a decision on the question of costs.

64. Fourthly, no inquiry into the means of Mr Merrick was conducted by the SDT in this case. This court has, however, caused such an inquiry to be made. It is clear from the materials now available that Mr Merrick would not be in a position to satisfy the order for costs, on the assumption that he is now suspended from practice."

In that case the appeal against the order for the payment of the Law Society's costs was allowed.

18. It seems to me that Camancho and Merrick are authority for the proposition that the means of a defendant to tribunal proceedings may be a relevant consideration in calculating the appropriate sanction as to the level of fines and costs. This would usually arise when a solicitor is being suspended from practice or struck off; but there will be exceptional cases where, even though a solicitor is allowed to continue in practice, his income may be a relevant consideration both as to any costs sanction and in respect of any financial penalty that might be imposed. For the reasons set out below, this seems to me to be one such case.
19. The next issue is whether the Tribunal did take into account the appellant's means when arriving at the amount of the fine and the costs order. I do not believe that it did. At paragraph 85 of the Findings, the Tribunal summarised the appellant's submissions on this point in these terms:

"The [appellant's] thirty years of practice had been brought to the verge of extinction, leaving him without any income and the almost certain loss of his home, from which he ran his practice."

There are no findings based on that submission. Nor is there anything to indicate that the Tribunal took into account the appellant's means when arriving at the amount of the fine or his liability for the costs order.

20. There can be no doubt that the appellant's financial position is parlous. The evidence at the first hearing as to his financial position demonstrated that for the six years between 2000 and 2005 the appellant's income amounted to less than £30,000 in total. For one of those years his income was nil; and for the most recent (2005) it was £1,500-odd. We asked the appellant this morning about his updated financial position. He told us that he worked for five months last year as a locum, for which he received about £500 a week. He now derives no income from his practice as a solicitor and exists on his state pension of about £107 a week. He also told us that last week he was due to be evicted because of default on his mortgage. On behalf of the respondent, Mr Havard properly accepted that it was plain that the appellant was indeed a man of very limited means. It seems clear that he is not in a position to pay the total sum of £9,500 by way of fine and costs.
21. Accordingly, with some regret, I have concluded that the Tribunal's decision was fundamentally flawed because it should have taken into account the appellant's exceptional financial circumstances in arriving at the appropriate sanctions and failed to do so. In the light of the delays in this case and the corresponding costs, it is appropriate for this court to substitute its own penalties for those imposed by the Tribunal.
22. Accordingly, on this ground I would quash the sanctions imposed by the Tribunal and instead order that the appellant pay a total of £2,000 by way of fine and costs. That seems to me to be proportionate to the particular breaches and the evidence before the Tribunal. It also reflects the fact that the appellant has at least some prospect of future earnings, such as the money he earned as a locum last year, which amounted to about £10,000 over a period of five months. It also acknowledges that his financial prospects can only be regarded as poor.
23. I shall deal shortly with the other elements of the appellant's complaint under ground 7 because I do not consider that any of those arguments are well-founded. The first is that the Tribunal did not set out its reasons for arriving at its conclusion. In my judgment that is an unreasonable criticism of the Tribunal's findings. When read as a whole, it is clear that they were of the view that the applicant was guilty of four separate breaches; that those breaches were not trivial; and that in those circumstances he was liable for a fine and the costs up to 20 December, but not thereafter, because the costs incurred thereafter related to the separate matter of the prohibition on the appellant acting as a sole practitioner.
24. The appellant also makes complaint that the Order made was unreasonable for four separate, specific reasons. I will deal with each of those briefly.
25. The appellant points out that two of the six original allegations were dropped. He says that that should be reflected in the costs penalty. However, four allegations were maintained and were accepted by the appellant. So it could not be said that the abandonment of two should somehow result automatically in a lesser costs sanction. It does not appear that the other two allegations added additional or specific costs which would not otherwise have been incurred. In those circumstances I reject that complaint.
26. Secondly, the appellant complains that the Investigating Officer's investigation was more thorough than was warranted and therefore he should not pay for the "overkill". It seems to me that that is a difficult submission. Investigations into documentary records of this kind, if they are to be done properly, are inevitably time-consuming and detailed. In all the circumstances it seems to me that the appellant cannot complain about the thoroughness of the investigation, particularly given his acceptance of the majority of the charges subsequently brought as a result of that investigation.
27. Thirdly, the appellant relies on paragraph 91 of the Findings to say that the breaches were little more than technical and do not therefore warrant the costs order made. Again I do not accept that argument. The same paragraph of the Tribunal's Findings goes on to emphasise that full and punctilious compliance with the Solicitors' Accounts Rules are an essential requirement of practice as a solicitor. In addition, Bolton is authority for the proposition that any breach by a solicitor of rules such as these have to be dealt with properly because "they are all serious".
28. The same point of principle is also an answer to the appellant's fourth complaint, to the effect that the errors in the accounts were small and on the W file in Mrs W's favour. He relies on that to say that the costs sanction is disproportionate, but again in my judgment that misunderstands the importance of a solicitor's compliance with the rules themselves, regardless of the ultimate financial consequence of any default.
29. That deals with ground 7. I go on very briefly to deal with the other grounds.

Ground 1: The Original Selection of the Appellant for Investigation

30. The appellant does not dispute that the respondent is entitled to investigate the activities of law firms and to inspect their records. Notwithstanding that, he complains that he was unfairly singled out because the respondent believed him "to be an easy and defenceless target".
31. There is no evidence to support that allegation. There is nothing to say that the appellant was unfairly selected for investigation. Moreover, there is no suggestion that either the investigation or the inspection was carried out in an improper or unreasonable way. Therefore the first ground fails.

Ground 2: The Scope of the Re-hearing

32. The appellant's complaint is that at the re-hearing the Tribunal did not merely consider the sanction to be imposed, but was required to open up its previous findings of fact so that it could "determine the question of guilt and not merely the sanction". I reject that submission for two reasons.
33. First, the judgment of Jack J and the previous order of this court, to which I have already referred, make plain that the sole issue for the Tribunal at the re-hearing was the appropriate sanction and was not a complete re-hearing. Secondly, there was no issue as to guilt in any event, the appellant having admitted at the first hearing that he was guilty of the four charges identified above.
34. Moreover, the fact that the re-hearing was limited to the question of sanction did not prevent both parties from adducing fresh evidence. There was live oral evidence from the Forensic Investigating Officer at the re-hearing (something which had not happened on the previous occasion) and, moreover, the appellant himself put in evidence in the form of statements from those that had worked in his office, including those who had assisted with the book-keeping. Accordingly, further evidence, and therefore further findings of fact were in play in that re-hearing. Accordingly, the second ground of appeal must also fail.

Ground 3: Disputed Questions of Fact

35. The appellant's third ground of appeal is that the Tribunal erred in not adequately looking into disputed questions of fact. The specific complaint in his skeleton is to the effect that the Tribunal erred in accepting uncritically the evidence of the Forensic Investigating Officer. To be fair to the appellant, in his oral submissions he accepted that this ground was difficult for him to sustain. With respect to him, I consider that to be right. On any view of the findings, the Tribunal dealt carefully with the Forensic Investigating Officer's evidence (see paragraphs 21-28 of their Findings), and also took into account the statements which the appellant had produced.
36. Accordingly, it is clear that there was a thorough investigation and that the Forensic Investigating Officer's evidence was critical of the appellant in a number of ways. The Tribunal carefully took into account all of those matters and arrived at their findings. It cannot be said that they uncritically accepted everything that they had heard. Accordingly, ground 3 of the appeal also fails.

Grounds 4, 5 and 6: The Tribunal's Findings and Conclusions

37. Grounds 4, 5 and 6 of the grounds of appeal are in a sense merely further ways in which the allegations that I have already dealt with have been put by the appellant. I deal only therefore with two specific matters that arise under those grounds.
38. First, the appellant suggested that it was inconsistent for the Tribunal to say that its only purpose was to reconsider sanction and then, on the other hand, to allow evidence from the Forensic Investigating Officer. I reject that allegation. As I have said, the evidence from the Forensic Investigating Officer was important because it allowed the Tribunal to understand the seriousness of the defaults and therefore to impose the appropriate sanction. It was appropriate for that evidence to be admitted. Indeed, that was the purpose of the re-hearing.
39. The second point concerns a complaint by the appellant that the Tribunal wrongly had regard to the events in 1989. That seems to me to be an unwarranted criticism. At paragraph 92 of their Findings, the Tribunal made it plain that although there had been the earlier findings in 1989, that was not a matter to be given "any great weight" because of the lapse of time since the earlier finding. It seems to me that that was an entirely appropriate way to deal with that complaint.
40. For those reasons I consider that there is nothing in grounds 4, 5 and 6.

Ground 8: The Tribunal was not an Independent or Impartial Tribunal

41. The suggestion underlying the final ground of appeal is that the Solicitors Disciplinary Tribunal is not an independent or impartial tribunal and that its decisions cannot comply with the Human Rights Act. Realistically, the appellant has not advanced that ground this morning. He accepts that there are authorities binding upon this court which say quite the reverse.
42. Accordingly, that is not a matter on which I comment further, save to say that the authorities to which I have referred above make clear that the Solicitors Disciplinary Tribunal has long been regarded as an important element of the regulation of the Solicitors' profession and that the Court of Appeal decision in Pine v the Law Society (unreported, 25 October 2001) is indeed authority for the proposition that such tribunals are in accordance with the Human Rights Act.

Conclusions

43. For the reasons that I have given, I consider that the appellant's argument as to means is correct and that therefore that aspect of ground 7 of his appeal succeeds. That, in my judgment, justifies a reduction in the financial penalty appropriate to the appellant to a total of £2,000. In my view none of the other grounds of appeal are sustainable. However, I should add that even if they were, they could not possibly reduce the appropriate sanction below the £2,000 penalty to which I have referred.

LORD JUSTICE THOMAS: I agree.

We have capped the overall amount at £2,000. Do you wish us to divide it up for the purposes of the way in which the money is distributed?

MR HAVARD: My Lord, that is just what I have been asked to ask for. Yes, please.

LORD JUSTICE THOMAS: How do you want it divided up? Is Her Majesty to receive £1,500 and the Law Society £500? Or should the fine be a nominal amount and the Law Society receive the balance? I do not know if Mr D'Souza has any views?

THE APPELLANT: My Lord, I fear that those entrusted by Her Majesty would only squander it, whereas the Law Society, I am sure, will spend it a little more wisely, and therefor my suggestion --

LORD JUSTICE THOMAS: I am not sure we can possibly take that into account. How do you want it divided?

MR APPELLANT: My Lord, I was going to say, if you do not mind, say £500 to the penalty and £1,500 to the Law Society.

MR HAVARD: I have no views on that.

LORD JUSTICE THOMAS: Do those behind you feel happy with that?

MR HAVARD: We are in the court's hands, my Lord.

LORD JUSTICE THOMAS: £500, fine; £1,500, capped costs. I imagine in the circumstances there need be no assessment because the costs are bound to be more than £1,500. No order as to costs for today, I imagine? You have not incurred any, Mr D'Souza?

THE APPELLANT: My Lord, I am very happy.

LORD JUSTICE THOMAS: Thank you very much. Thank you very much for your very considerable assistance.

THE APPELLANT: Thank you, my Lord.