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You are here: BAILII >> Databases >> England and Wales High Court (Administrative Court) Decisions >> Ramasamy v Solicitors Regulation Authority [2018] EWHC 117 (Admin) (31 January 2018)
URL: http://www.bailii.org/ew/cases/EWHC/Admin/2018/117.html
Cite as: [2018] EWHC 117 (Admin)
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QUEEN'S BENCH DIVISION
DIVISIONAL COURT
Strand, London, WC2A 2LL |
||
B e f o r e :
and
MR JUSTICE MALES
____________________
| RAJESWARY RAMASAMY |
Appellant |
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| - and - |
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| SOLICITORS REGULATION AUTHORITY |
Respondent |
____________________
ANDREW TABACHNIK QC (instructed by Capsticks, Solicitors) for the Respondent
Hearing date: 24 January 2018
____________________
Crown Copyright ©
- This is the judgment of the court.
- The appellant, Mrs Rajeswary Ramasamy, appeals pursuant to section 49 of the Solicitors Act 1974 against the decision of the Solicitors Disciplinary Tribunal that she be struck off the Roll of Solicitors and pay the costs of the proceedings before the Tribunal in the sum of £70,123.30. The Tribunal's judgment is dated 21 July 2017 and followed a hearing which took place between 5 and 9 June 2017.
- The appellant was admitted to the Roll on 15 January 2007. From 13 October 2008 she was a sole practitioner trading under the name of Thames Chambers Solicitors ("the firm") from offices located in Whitechapel High Street in London. The proceedings against her concerned the involvement in the firm of a former solicitor, Rajesh Singh Pathania, referred to variously in the Tribunal's decision as "RSP" or "Mr S", who had been struck off on 22 September 2010.
- RSP (as we shall call him) was a substantial client of the firm who also introduced a number of other clients. The Solicitors Regulation Authority contended that his involvement in the firm went beyond that of a client and that he was providing legal services from the firm's premises and under its auspices, with the appellant's knowledge, including one occasion when he represented a client of the firm in a court hearing and the firm submitted a bill for his services. The appellant accepted that she was aware that RSP was a struck off solicitor from around March 2011 and that he spent a great deal of time at her office, including speaking to clients there, but denied that his involvement went beyond that of a client or that she had any knowledge of this. She knew of the prohibitions on the employment or remuneration of a struck off solicitor and that such persons must not conduct litigation for clients.
- The Tribunal was satisfied to the criminal standard of proof that despite being warned about RSP, the appellant allowed a situation to develop in which she had no control over his activities at the firm, that these activities included the provision of legal services by RSP, and that the facilities afforded to him by the appellant represented a benefit which amounted to remunerating him contrary to the applicable rules governing the position of struck off solicitors. It found also that in one respect her conduct was dishonest, namely submitting a bill for attendance at a court hearing. The Tribunal did not accept other allegations of dishonesty, but characterised the appellant's conduct as "reckless and foolish". It concluded that in such circumstances and despite the appellant's personal mitigation, striking off was inevitable.
- The appellant challenges the findings made against her, including in particular the allegation of dishonesty. Mr Ian Stern QC submits on her behalf that the Tribunal's conclusions were insufficiently reasoned, that the findings made do not justify the conclusions reached, and that in any event the sanction of striking off was disproportionate. Mr Andrew Tabachnik QC for the SRA submits that the Tribunal's reasoning is clear, that it was entitled to reach the conclusions which it did reach, and that in the circumstances the Tribunal's decision that the appellant should be struck off was unimpeachable.
- The appellant has a right of appeal from the decision of the Tribunal under section 49 of the Solicitors Act 1974. An appeal will be allowed if the decision of the Tribunal was wrong or if it was unjust because of a serious procedural or other irregularity in the proceedings: CPR 52.21. In considering those matters, this court will bear in mind that the Tribunal is a specialist tribunal which had the advantage of hearing and seeing all the evidence and will not lightly interfere with the tribunal's findings: e.g. Williams v Solicitors Regulation Authority [2017] EWHC 1478 (Admin) at [55].
- The proceedings before the Tribunal were concerned with alleged breaches of specific rules concerning struck off solicitors and also with infringements of more general regulatory requirements and professional principles.
- Section 41 of the Solicitors Act provides:
- Section 20 of the Solicitors Act provides that no unqualified person is to act as a solicitor. It is an offence to do so.
- Sections 12 to 14 of the Legal Services Act 2007 provide that the conduct of litigation is a "reserved legal activity" which can only be carried on by an authorised (or exempt) person. Again, contravention of these provisions is an offence.
- Rule 8.6 of the SRA's Authorisation Rules for Legal Services Bodies and Licensable Bodies 2011 ("the Authorisation Rules"), which were made pursuant to the 2007 Act and which came into force on 31 March 2012, provides:
- The SRA which is responsible for the regulation of solicitors publishes a Handbook setting out the standards and requirements which solicitors are expected to achieve and observe, for the benefit of the clients they serve and in the general public interest. It includes the "SRA Principles", ten mandatory principles which underpin all aspects of practice as a solicitor and which define the fundamental ethical and professional standards expected of solicitors. It includes also the SRA Code of Conduct which sets out the "Outcomes", also mandatory, which solicitors are required to achieve when providing legal services.
- The Principles include the following:
- It is well established that dishonesty and want of integrity are different (if overlapping) regulatory concepts: e.g. Williams v Solicitors Regulation Authority [2017] EWHC 1478 (Admin) at [50] and [130].
- The Outcomes include the following:
- It is apparent that the question whether there has been compliance with the Principles or achievement of the Outcomes may in some circumstances involve an exercise of judgment. That is a judgment which an expert and specialist tribunal is likely to be particularly well qualified to make, to which the court will give appropriate weight.
- So far as the sanction for regulatory breaches is concerned, the SRA has published a Guidance Note which (where relevant for present purposes) reflects decisions by this court and on appeal. In summary, the Tribunal is required to assess the seriousness of the misconduct in question, to have regard to the purpose for which sanctions are imposed (including not only punishment and deterrence but also, fundamentally, the need to maintain the reputation of the solicitors' profession), and to choose the sanction which most appropriately fulfils that purpose, having regard to the seriousness of the misconduct. Cases of dishonesty will almost invariably lead to striking off, save in exceptional circumstances. For a fuller account of the relevant authorities, see Shaw v Solicitors Regulation Authority [2017] EWHC 2076 (Admin) at [60] to [72].
- There were six allegations against the appellant. The allegations, together with the Tribunal's conclusions, were as follows:
- The Tribunal found that there had been a clear failure of governance in the management of the firm over a period of time for which the appellant was responsible (paras 131 and 133); that in relation to Allegation 4, but not the other allegations, the appellant had acted dishonestly by sending clients a bill in circumstances where she knew that she was not entitled to do so (para 131); that in other respects her conduct was reckless and foolish (para 115.38); that she had no meaningful insight into her misconduct (para 134); and that despite her personal mitigation the misconduct was so serious that any penalty short of striking off would be insufficient for the protection of the public and the reputation of the profession (paras 135 to 137). Accordingly it ordered that she be struck off and that she pay the costs of the proceedings which it assessed in the sum of £70,123.30.
- The appellant has submitted two versions of her grounds of appeal. The first version, prepared by the appellant in person, challenges the findings made against her in relation to Allegations 1, 3, 4, and 6 but, if the findings stand, did not challenge the Tribunal's decision that the appropriate sanction was striking off. The second version, settled on her behalf by Mr Stern, adds a challenge in relation to Allegation 5 and to the sanction imposed by the Tribunal, as well as refining and clarifying points made in relation to other allegations. The essential submission made orally by Mr Stern is that the primary findings of fact made by the Tribunal (which are not challenged) do not justify the conclusions which it reached.
- We take each of the allegations in turn.
- The appellant's initial complaints were that the Tribunal did not give its reasons for concluding that RSP was remunerated "in the sense of the Cunnew case" and that in any event there was no evidence that facilities continued to be afforded to him after early 2012 when the appellant was warned by the SRA that she should not be employing RSP. The revised grounds of appeal are that the Tribunal was wrong to conclude that the appellant remunerated RSP and that in any event the facts which it found were insufficient to establish a breach of Principle 2 (failure to act with integrity).
- Cunnew was a decision by the Solicitors Disciplinary Tribunal made in 1992 (decision no. 6134/1992). It was concerned with struck off solicitors who undertook work for the firm concerned and also incurred travel and other expenses in the course of that work which the firm paid. The main focus of the decision appears to have been whether the struck off solicitors were employed but the Tribunal in that case also made some observations as to the concept of remuneration.
- The Tribunal in the present case quoted from the Cunnew decision as follows:
- It quoted also from the Guidance Notes to the Authorisation Rules:
- The appellant did not suggest before the Tribunal that these statements of principle are wrong in law or (despite the fact that the Cunnew case pre-dated the Authorisation Rules) that they no longer applied once the Rules came into force. It was common ground before the Tribunal that the essential issue was whether RSP was working in a solicitor's office, purporting to advise clients "under the umbrella of" the firm – that is to say, that he was doing so under the auspices of the firm or in a manner such that his association with the firm lent his advice weight or credibility. That being so, the Tribunal's findings in relation to this allegation, including its findings about the facilities afforded to RSP which we have summarised above, are entirely clear. The appellant provided facilities to RSP which enabled him to provide advice to clients and which represented a benefit to him.
- In this court Mr Stern did not challenge the statement of principle made in the Cunnew case. He submitted, however, that to the extent that it dealt with remuneration the case was concerned only with such matters as reimbursement of out-of-pocket expenses and therefore did not affect the present case. In our view that is to read the decision too narrowly. The passage quoted contains two elements. The first is a general statement that, having regard to the purpose of the rule against employing or remunerating struck off solicitors, the concept of "remuneration" should be given a wide (or even the widest possible) meaning. The second is that, adopting this approach, remuneration includes reimbursement of out-of-pocket expenses. Plainly this second element has nothing to do with the present case. It is the first element which the Tribunal clearly had in mind when it referred to remuneration "in the Cunnew sense".
- The Cunnew case has not hitherto been considered by this court and is not in any way binding upon us as authority. We understand, moreover, that there are no authorities which have considered the meaning of remuneration for the purpose of section 41 of the Solicitors Act 1974 or the Authorisation Rules 2011. However, we would endorse the Tribunal's interpretation of the applicable rule. The rule against employing or remunerating a struck off solicitor must be interpreted in the light of the mischief against which it is directed. It is necessary for the protection of the public and for public confidence in the solicitors' profession that a struck off solicitor should not be enabled to provide (or to purport to provide) legal services to the public by reason of an apparent association with a legitimate firm of solicitors. A struck off solicitor who is afforded facilities at such a firm which enables or assists him to provide such services, apparently on behalf of the firm in question, can properly be regarded as employed by the firm even in the absence of a contract of employment. He can properly be regarded as remunerated by the firm if the provision of such facilities represents a benefit to him even if he receives no financial payment.
- The Tribunal did find that the facilities afforded to RSP represented a benefit to him. It was a benefit which enabled him to give advice to the appellant's clients and was therefore sufficiently connected with her practice as a solicitor to amount to remuneration for the purpose of section 41 of the 1974 Act and Rule 8.6 of the Authorisation Rules. On the basis of these findings the Tribunal was therefore entitled to find, as it did, that "the [appellant] had remunerated RSP in the sense of the Cunnew case". Although it did not make such a finding, it would also have been entitled to find that the appellant had employed RSP in the wider sense which we have discussed.
- The complaint that there was no evidence that the appellant's remuneration of RSP in this wider sense ceased in early 2012 was included in the appellant's initial grounds of appeal, but was not developed further. There was abundant evidence which entitled the Tribunal to find that RSP's use of the firm's email account had continued after that date, up to at least late 2014 and early 2015. The Tribunal made clear that its findings concerning this allegation related to the period after 31 March 2012, the date when the Authorisation Rules came into force.
- Mr Stern's criticism of the Tribunal's conclusion that the appellant had lacked integrity, and thus had acted in breach of Principle 2 of the Code of Conduct, focused on paragraph 115.28 of the decision, where the Tribunal said that:
- Mr Stern submitted that this criticism was more a matter of competence in relation to systems put in place by the appellant than any issue of personal integrity. However, the Tribunal's criticism of the appellant must be viewed in its context. That context included the fact that the appellant had received a clear warning as to RSP's involvement with the firm in December 2012 which brought to her attention that action needed to be taken to ensure that his involvement did not overstep proper bounds (para 115.26). It included also the fact that RSP was himself a significant client of the firm and an introducer of business, well-connected in his local community, and that "the [appellant's] judgment had been clouded by that importance and she had lost sight of the obligations and responsibilities to ensure that he did not have any involvement in the Firm" (para 115.29). Viewing the evidence as a whole, the Tribunal was entitled to exercise a judgment that the appellant had failed to act with integrity.
- We add for completeness that the evidence of Mr Goffar that the system for checking emails had slipped, to which the Tribunal referred, referred to a limited period when the appellant was unwell. The Tribunal understood this, as the point is mentioned elsewhere in the decision. In any event it does not affect the Tribunal's conclusion.
- If (as we conclude) the Tribunal's finding that the appellant remunerated RSP in the wider Cunnew sense stands, there is no challenge to its further conclusion that the appellant was in breach of Principles 6, 7 and 8 and that she failed to achieve Outcomes 7.2 and 7.5.
- The appellant's initial complaint was that the Tribunal did not explain how the appellant could have permitted or allowed RSP to attend the hearing on 12 December 2011 if she had not known about it at the time. The revised grounds of appeal are that it was wrong to conclude that the appellant permitted or allowed RSP to conduct litigation and that in any event the facts which it found were insufficient to establish a breach of Principle 2.
- Any complaint that the Tribunal did not explain its reasoning is plainly wrong. It explained that the appellant had permitted or allowed RSP's attendance at the hearing and further conduct of the litigation by failing to prevent it, affording RSP the facilities referred to in relation to Allegation 1 which allowed a situation to develop in which she did not have control over what he was doing. The real issue is whether the facts found are capable of supporting the Tribunal's conclusion. In our judgment they clearly are. The process of reasoning which the Tribunal adopted was legitimate and justified its conclusion. It was not essential for the Tribunal to find that the appellant was aware at the time that RSP had attended the hearing.
- For the same reasons as apply in relation to Allegation 1, the Tribunal was entitled in the light of the evidence as a whole to exercise a judgment that the appellant had failed to act with integrity in relation to RSP's conduct of litigation, although we bear in mind that the warning given to the appellant about her involvement with RSP was given after the 12 December 2011 hearing.
- If the Tribunal's finding stands, there is no challenge to its further conclusion that the appellant was in breach of Principles 4, 5, 6, 7 and 10 and that she failed to achieve Outcomes 7.5 and 7.8.
- The appellant made six submissions in relation to the bill for attendance at the 12 December 2011 hearing in her initial grounds of appeal. These were: (1) that the Tribunal ought not to have rejected her evidence that the bill was in fact for preparation before the hearing and that the reference to attendance was a genuine mistake (a ground of appeal which recognises that the Tribunal did in fact reject this evidence: see below); (2) that the Tribunal ought not to have found her to be dishonest; (3) that the bill was not paid; (4) that the Tribunal's logic that it did not need to make a finding which of the two "scenarios" had occurred was inconsistent with its conclusion under Allegation 3 that it could not be sure that the appellant knew that RSP had attended the hearing; (5) that unless the Tribunal could make a positive finding as to which of the two "scenarios" had occurred, it could not have found either to be proved and should therefore have dismissed this allegation; and (6) that in any event its finding as to Outcome 7.8 could not stand. The revised grounds condensed these into two points, (1) that the Tribunal ought not to have found that the appellant was dishonest and (2) that it failed properly to consider her explanation for claiming the fee. In substance, however, the arguments were the same. In oral submissions Mr Stern's principal point was that the Tribunal failed to grapple properly or at all with the appellant's evidence that the reference to attendance was a genuine mistake.
- The Tribunal was plainly entitled to find that the bill was for attendance at the hearing and for drafting the order and liaising with the other side afterwards. The terms of the appellant's own email to the client sent on 16 December 2011, only four days after the hearing, were crystal clear:
- The appellant's evidence that the bill was in fact for preparation before the hearing and that its reference to attendance and post-hearing work was a genuine mistake was implausible. The Tribunal considered this evidence carefully and explicitly rejected it (para 118.15). It was entitled to do so.
- Having rejected the appellant's explanation, the Tribunal found as a fact that there were two possible scenarios. The first was that the appellant did know that RSP had attended the court hearing, in which case she was submitting a bill for work done by a struck off solicitor. The second was that she did not know this, in which case her understanding was that nobody had attended from the firm and she was submitting a bill for an attendance at court which had never occurred. The Tribunal was satisfied that these were the only two plausible scenarios and that one or other of them had occurred (para 118.16).
- It was also the appellant's evidence that one of her two clients had asked her to submit a bill because, without such a bill, he was having difficulty getting his partner to pay his 50% share of the appellant's fee, and that in any event substantial sums were owed by the clients to the firm. We cannot see how this evidence assists the appellant. It does not affect the fact that the bill was submitted for work which had either been done by a struck off solicitor or which the appellant knew had not been done at all. Even if the client was not misled, which seems questionable, the object of the bill was to obtain payment from the client's partner on a false basis.
- Whichever of the two "scenarios" applied (that the appellant knew that she had issued a bill for attendance by a struck off solicitor or that she was charging for an attendance that she knew had not occurred) her conduct was obviously dishonest. The challenge to this finding by the Tribunal is hopeless. It makes no difference that in the event the client or his partner did not pay the bill.
- As to the suggestion of inconsistency with the Tribunal's findings in relation to Allegation 3, what the Tribunal said when dealing with Allegation 3 was that there was a possibility that she had not known at the time that RSP attended the hearing (para 117.19), that it was "quite possible" that she did know (para 117.24), but that the Tribunal could not be satisfied to the necessary criminal standard that she did (para 117.24). It did not make a positive finding that she did not know. It follows that, as a matter of logic, there is no inconsistency between its conclusion on Allegation 3 (that the appellant may have known of RSP's attendance hearing but it was not proved that she did) and Allegation 4 (that she either knew of his attendance or believed that no one had attended, but the Tribunal could not say which of these was correct).
- We do not accept that the Tribunal could only find Allegation 4 to be proved if it was able to make a positive finding as to which of the two "scenarios" had occurred. It was a legitimate process of reasoning that one of two scenarios must have occurred as there was no other plausible possibility, and that in either event the appellant had claimed the fees dishonestly. Mr Stern did not identify any other plausible possibility if (contrary to his submission but as we have concluded) the Tribunal considered and rejected the appellant's evidence of mistake. We accept Mr Tabachnik's submission on behalf of the SRA that it would be extraordinary if the Tribunal were required to acquit the appellant in circumstances where it was sure to the relevant standard of proof that she had acted dishonestly in one or other of two ways, albeit it was unable to say which.
- Finally, we can see no reason why, given the Tribunal's findings, its conclusion that the appellant failed to achieve Outcome 7.8 (having a system for supervising clients' matters, including the regular checking of the quality of work) should not stand. Mr Stern did not pursue this point.
- In conclusion so far as Allegation 4 is concerned, we would add that the finding of dishonesty against the appellant was a serious matter which, even if it had stood alone, would have required the Tribunal to consider carefully whether she should be struck off. That is the almost invariable sanction where dishonesty is proved, having regard to the purposes for which sanctions are imposed which include maintenance of public confidence in the profession (see Shaw v Solicitors Regulation Authority [2017] EWHC 2076 (Admin) at [60] to [72], cited above).
- There is another aspect of the way in which the Tribunal dealt with the issue of dishonesty to which we should draw attention. It was the SRA's case in relation to all six allegations that the appellant had acted dishonestly, albeit that proof of dishonesty was not an essential ingredient of proof of any of them. As already noted, the Tribunal found that the appellant was dishonest in relation to Allegation 4, but acquitted her of dishonesty in relation to all other allegations. There has been no Respondent's Notice in relation to these findings. However, perhaps because there was no issue about this, the Tribunal considered the question of dishonesty in accordance with what it referred to as "the combined test laid down in Twinsectra v Yardley & Others [2002] UKHL 12 which required that the person has (a) acted dishonestly by the ordinary standards of reasonable and honest people and (b) knew that by those standards he was acting dishonestly and had done so knowingly". In the case of Allegations 1, 3 and 6, the Tribunal concluded that the first requirement of this combined test was satisfied, but that the second was not proved to the necessary standard.
- However, subsequent cases have explained that it is not a necessary element of proof of dishonesty that the person concerned is aware that he is acting dishonestly by the ordinary standards of reasonable and honest people: see Ivey v Genting Casinos (UK) Ltd [2017] UKSC 67 at [62] and [74] and the cases there cited (Barlow Clowes International Ltd v Eurotrust International Ltd [2005] UKPC 37, [2006] 1 WLR 1476; Abou-Rahmah v Abacha [2006] EWCA Civ 1492, [2007] 1 Lloyd's Rep 115; and Starglade Properties Ltd v Nash [2010] EWCA Civ 1314, [2011] Lloyd's Rep FC 102). Although the discussion of this issue by Lord Hughes in Ivey was principally concerned with the test in criminal law (see R v Ghosh [1982] QB 1053), the cases cited by him were civil cases which authoritatively interpreted what was said by the House of Lords in Twinsectra.
- It appears, therefore, that the Tribunal applied a test which was too favourable to the appellant. We note in passing that in Williams v Solicitors Regulation Authority [2017] EWHC 1478 (Admin) this court did not comment adversely on the fact that the Tribunal had also applied the Twinsectra test of dishonesty, but no issue about the test arose in that case which was decided before the Supreme Court decision in Ivey brought this issue into greater prominence.
- This has two consequences for the present case. The first is that any challenge to the Tribunal's finding of dishonesty in relation to Allegation 4 faces even greater obstacles if the correct test is applied. The second is that any reconsideration of the question of sanction, for example if this appeal were to succeed in part, would need to revisit the question of dishonesty in relation to other allegations where the Tribunal appears to have applied the wrong test. Even though the test was not in issue before the Tribunal, it would be important in the public interest that any question of sanction is considered on a correct legal basis.
- In view of our conclusions on the appeal, however, it is unnecessary to pursue this point. Further, we understand from Mr Tabachnik that since the decision of the Supreme Court in Ivey the Solicitors Disciplinary Tribunal no longer applies the Twinsectra test.
- The appellant's initial grounds of appeal did not challenge the Tribunal's finding in relation to VAT, which was limited to a partial failure to achieve Outcomes 10.2 (providing the SRA with information) and 10.3 (notifying the SRA of relevant matters). Mr Stern submitted, nevertheless, that the Tribunal's findings did not fall readily within the terms of these Outcomes, but acknowledged that these limited findings probably had no significance in the Tribunal's overall decision. It is plain from the decision that they did not. For his part Mr Tabachnik described this allegation as a matter of strict liability which, by itself, was not very serious.
- It is apparent that if Allegation 5 had stood alone, the Tribunal would not have found it necessary to strike off the appellant and that the limited findings which it made in relation to this allegation played little or no part in its decision that, because of the more serious matters which it found proved, striking off was the appropriate sanction. In those circumstances we do not propose to say anything further about Allegation 5.
- The appellant's grounds of appeal in relation to Allegation 6 are essentially the same as in relation to Allegation 3, that is to say that the Tribunal should not have found that the appellant permitted or allowed the use of the email account if it could not be sure that she was aware that this was happening and that its findings were insufficient to establish a breach of Principle 2. We reject these arguments for the same reasons as we have rejected the arguments in relation to Allegation 3. As the Tribunal found, the appellant allowed a situation to develop in which she had no control over the use of the firm's facilities by RSP, including access to the MH email account. Viewing this in context, the Tribunal was entitled to find that the appellant had failed to act with integrity.
- Mr Stern made three submissions in support of a case that the sanction of striking off was disproportionate and unnecessary and therefore wrong.
- The first was that it was procedurally unfair that the Tribunal had provided its findings orally without explanation, so that mitigation had to be advanced in a vacuum without understanding the reasons for the tribunal's conclusions, including in particular its finding of dishonesty in relation to Allegation 4. However, this was the Tribunal's usual practice and no application was made by Mr Stern (who appeared below) for any different procedure to be followed. It is in any event everyday practice in the criminal courts for mitigation to be advanced following an unreasoned jury verdict of guilty. There is nothing in this point.
- Second, Mr Stern repeated the submission already made in relation to Allegation 4 that substantial sums were owed by the client to the firm. As already indicated, however, this does not assist the appellant. It remained the case that the bill was dishonestly submitted with a view to obtaining payment from the client or his partner on a false basis. That the attempt failed does not make it any less dishonest, although the Tribunal took account of the fact that in the event no loss had been caused (para 134).
- Third, Mr Stern submitted that the appellant had significant personal mitigation, including the fact that she had been seriously ill. However, the Tribunal took all of this mitigation into account, while pointing out that the appellant's dishonesty in relation to Allegation 4 had not taken place during the time when she was unwell and that there was no evidence that she had been pressured into submitting the bill against her will (para 137). The existence of the appellant's personal mitigation provides no basis for concluding that its decision was wrong.
- Looking at the matter overall in the light of the findings which it made, the Tribunal applied the relevant guidance. There were no exceptional circumstances. The Tribunal was plainly entitled to conclude that striking off was the appropriate sanction.
- For the reasons we have given the appeal is dismissed.
Mr Justice Males:
Introduction
The issues on appeal
Legal framework
"No solicitor shall, except in accordance with a written permission granted under this section, employ or remunerate in connection with his practice as a solicitor any person who to his knowledge is disqualified from practising as a solicitor by reason of the fact that: (a) his name has been struck off the roll …"
"(a) An authorised body must ensure that: (i) any manager or owner of the authorised body; … has been approved by the SRA under Part 4. …
(c) An authorised body (or manager or employee of such a body) must not employ or remunerate a person … (ii) whose name has been struck off the roll … without the SRA's written permission."
"You must
(1) …
(2) act with integrity;
(3) …
(4) act in the best interests of each client;
(5) provide a proper standard of service to each client;
(6) behave in a way that maintains the trust the public places in you and in the provision of legal services;
(7) comply with your legal and regulatory obligations and deal with your regulators and ombudsmen in an open, timely and co-operative manner;
(8) run your business or carry out your role in the business effectively and in accordance with proper governance and sound financial and risk management principles;
(9) …
(10) protect client money and assets."
"You must achieve these outcomes: …
1.2 you provide services to your clients in a manner which protects their interests in their matter, subject to the proper administration of justice; …
5.2 you are not complicit in another person deceiving or misleading the court; …
7.2 you have effective systems and controls in place to achieve and comply with all the Principles, rules and outcomes and other requirements of the Handbook, where applicable; …
7.5 you comply with legislation applicable to your business, including anti-money laundering and data protection legislation; …
7.8 you have a system for supervising clients' matters, to include the regular checking of the quality of work by suitably qualified and experienced people; …
10.2 you provide the SRA with information to enable the SRA to decide upon any application you make, such as for a practising certificate, registration, recognition or a licence and whether any conditions should apply; and
10.3 you notify the SRA promptly of any material changes to relevant information about you including serious financial difficulty, action taken against you by another regulator and serious failure to achieve the Principles, rules, outcomes and other requirements of the Handbook."
The allegations and the Tribunal's conclusions
(1) Allegation 1: Contrary to Rule 8.6(c) of the Authorisation Rules the appellant employed or remunerated a person who was at the material time a struck off solicitor, and in so doing:
a. acted in breach of Principles 2, 6, 7 and/or 8 of the SRA Principles 2011; and
b. failed to achieve Outcomes 7.2 and/or 7.5 of the SRA Code of Conduct 2011.
Conclusion: The Tribunal noted that the purpose of striking off a solicitor was to protect the public and that the only circumstance in which a struck off solicitor should be present in a solicitor's office without the approval of the SRA was as a client (para 115.19 of the decision). It found that although RSP had not been employed under any contract of employment or remunerated financially (para 115.20), he spent a great deal of time at the firm (para 115.21); that he was provided by the appellant with facilities to work on his own cases, using the firm's accommodation (para 115.22); that he benefited from the firm's dictation facilities and the assistance of its caseworkers (para 115.22); and that he had access to the firm's clients, to whom he provided legal advice in a way which enabled him to maintain his reputation in the community as somebody who could provide such advice notwithstanding the fact that he had been struck off (para 115.23). The evidence before the Tribunal included an application notice in court proceedings on which RSP's name appeared with the firm's address in the section for service of documents: RSP described himself in the proceedings as having "obtained a permanent position in a solicitor's Firm working as a clerk to the solicitors" (para 115.4). The Tribunal found that the appellant had remunerated a struck off solicitor, following a previous decision of the Solicitors Disciplinary Tribunal in the case of Cunnew (paras 115.24 and 115.39), but did not make any express finding one way or the other whether this also amounted to employing him. It found that the appellant had acted in breach of the Principles relied on by the SRA and had failed to achieve the required Outcomes (paras 115.25 to 115.35). It made clear that it had reached its conclusions considering not only individual examples of RSP's involvement in the firm but the totality of the evidence (para 115.24). However, the Tribunal found that the appellant had not acted dishonestly, although her conduct was reckless and foolish (paras 115.36 to 115.38).
(2) Allegation 2: Contrary to Rule 8.6(a) of the Authorisation Rules the appellant permitted or allowed a struck off solicitor to be concerned in the management of the firm and in so doing:
a. acted in breach of Principles 7, 8 and/or 10; and
b. failed to achieve Outcomes 7.2 and/or 7.5.
Conclusion: The Tribunal found that this allegation was not proved. It was not satisfied that RSP's involvement in the firm was such that he was concerned in its management or had become a manager for the purpose of the applicable Rule (para 116.10). Accordingly we need say nothing further about this allegation.
(3) Allegation 3: The appellant permitted or allowed a struck off solicitor to undertake litigation or work ancillary to litigation on behalf of the firm without having the requisite permission from the SRA and in so doing:
a. acted in breach of Principles 2, 4, 5, 6, 7 and/or 10; and
b. failed to achieve Outcomes 5.2, 7.5 and/or 7.8.
Conclusion: The Tribunal found as a fact that RSP had attended a hearing on 12 December 2011 on behalf of a client of the firm; that he had made detailed legal submissions at the hearing; that he had subsequently liaised with the solicitor acting on the other side over the terms of a draft order from the hearing; and that he had engaged in other conversations about the case with that opposing solicitor at later stages, for example in April 2013 (paras 117.10 to 117.12). The transcript of the 12 December 2011 hearing describes RSP as a "paralegal from Thames Chambers Solicitors" appearing on behalf of the claimants in the case. The Tribunal was not prepared to find that the appellant knew at the time that RSP had attended the 12 December 2011 hearing or that he was undertaking litigation (para 117.24), but found that she had permitted or allowed RSP to conduct litigation in this way by affording him the facilities referred to in relation to Allegation 1, thereby allowing the situation to arise in which she did not have control over what RSP was doing purportedly on behalf of the firm (para 117.13). It found that she had acted in breach of the Principles relied on by the SRA and that she had failed to achieve Outcomes 7.5 and 7.8, but that failure to achieve Outcome 5.2 was not proved (paras 117.13 to 117.21). It found that the appellant had not acted dishonestly in relation to this allegation (paras 117.22 to 117.25).
(4) Allegation 4: The appellant claimed fees on behalf of the firm for work in circumstances where she was either unaware of whether that work had been carried out or where that work had been carried out by a struck off solicitor and in so doing:
a. acted in breach of Principles 2, 4 and/or 6; and
b. failed to achieve Outcome 1.2.
Conclusion: This allegation related to a bill for £600 submitted by the appellant for attendance at a hearing on 12 December 2011 attended by RSP and for drafting the order and liaising with the other side. The SRA's case was that as the appellant maintained that she knew nothing about RSP's attendance at that hearing, there were two possible scenarios. Either she was not telling the truth and did know that RSP had attended the hearing, in which case she had issued a bill for attendance by a struck off solicitor. Or she believed that nobody from the firm had attended, in which case she was charging for an attendance that she knew had not occurred. The Tribunal accepted that these were the only two plausible scenarios and that one or other of them had occurred, but made no finding as to which it was (para 118.16), although the appellant knew (para 118.25). It found that the allegation was proved and that, whichever scenario was correct, the applicant was in breach of the Principles relied on and had failed to achieve Outcome 1.2 (paras 118.17 to 118.19). It found also that, in either event, the appellant had acted dishonestly (paras 118.20 to 118.27).
(5) Allegation 5: The appellant claimed VAT despite not being VAT registered or having any entitlement to do so and in so doing:
a. acted in breach of Principles 2 and/or 6; and
b. failed to achieve Outcomes 10.2 and 10.3.
Conclusion: The Tribunal found that the appellant had claimed VAT on two occasions despite not being registered (para 119.6), but this was an honest mistake as she had submitted forms for registration in anticipation of her turnover crossing the VAT threshold and believed that VAT should be charged to clients in such circumstances (para 119.7). Accordingly it concluded that the appellant had not acted in breach of the Principles (paras 119.7 to 119.12), albeit there was a partial failure to achieve Outcomes 10.2 and 10.3 (paras 119.14 to 119.22).
(6) Allegation 6: The appellant permitted or allowed use of a firm email account, referred to as the "MH" account, by a person or persons other than those employed by her and in so doing:
a. acted in breach of Principles 2, 4, 5, 6 and/or 8; and
b. failed to achieve Outcome 7.8.
Conclusion: The Tribunal found that RSP had use of the MH email account, though it did not need to and did not decide whether this was constituted by his sitting physically at the keyboard and typing out emails or by dictating emails to a staff member who would type and send the emails in his name as either of these would amount to use of the account (paras 120.12 and 120.14). It found also that the appellant either knew that he was doing this or failed to exercise control and thereby permitted a situation to develop in which RSP was using the firm's general email address in this way (paras 120.15 to 120.16). It found that the appellant had acted in breach of the Principles relied on by the SRA (paras 120.15 to 120.20) and had failed to achieve the required Outcome (para 120.24), but acquitted her of dishonesty, stating in this connection that it could not be sure that she knew that RSP was using the email account in the way that he was (paras 120.21 to 120.23).
Sanction
The appeal
Allegation 1 – employing or remunerating a struck off solicitor
"As to the question of 'employment' – it is well established that a master and servant relationship is not a fundamental requirement to establish that a person has acted as a solicitor's clerk. The Tribunal consider that 'employment' should be construed in the wider sense of 'keeping busy', or 'keeping occupied'. It follows from this that payment of a wage is not essential to establish employment. The intention of section 41 is that struck off solicitors be kept out of solicitors' offices save in exceptional and closely regulated cases. Although not argued before them, the Tribunal believe it is useful to add that in its view the word 'remunerate' should also be interpreted in its widest sense so that it not only means 'to reward' or 'to pay for services' but also 'to provide recompense for'. The payment of out-of-pocket expenses by the respondent was therefore remuneration."
"The scope of the duty in Rule 8.6(c) goes beyond strict employer-servant relationship (contract of service) and includes a relationship founded on a contract for services or indirect arrangements which are intended to have the effect of frustrating this rule."
"The [appellant] was responsible for taking steps to ensure that RSP did not have any involvement in the Firm beyond that of a client. However whatever steps, if any, the [appellant] took were inadequate. She had not seen some of the emails which indicated that she had not been checking them. The system of the [appellant] checking outgoing emails did slip according to Mr Goffar [a witness called by the appellant]."
Allegation 3 – allowing a struck off solicitor to undertake litigation on behalf of the firm
Allegation 4 – the bill for attendance at the 12 December 2011 hearing
"We shall appreciate if you would please forward our fee of £600 for attendance in court on 12th December 2011 and drafting draft order, liaising with other side and forwarding to court for seal."
Allegation 5 – VAT
Allegation 6 – the MH account
Sanction
Disposal