QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL
B e f o r e :
MR JUSTICE HADDON-CAVE
| CHRISTOPHER CHARLES EDWARD HAYES
|- and -
SOLICITORS REGULATION AUTHORITY
Richard Coleman QC (instructed by Solicitors Regulation Authority) for the Respondent
Hearing date: 19 April 2018
Crown Copyright ©
Lord Justice Hickinbottom :
The Background Litigation
The Funding Arrangements
"In carrying out his duties and assignments, the service provider [i.e. the Firm] shall have the freedom and autonomy of a freelance worker or trader. Subject only to the proper and correct performance of the contractual relations necessary to promote and defend the member's interests, the service provider shall be completely free and independent in carrying out his duties and organising his work, including time and hours he shall devote to it."
"The service provider's duties shall consist in particular of [______________]¹, they shall be carried out in [______________]²".
The marked footnotes were as follows:
"¹ Insert the details.
² Insert the place".
"The service provider's duties shall consist in particular of legal and constitutional advise [sic], they shall be carried out in the member states."
"The service provider's duties shall consist in particular of legal and constitutional advise [sic] on matters relating to my activities as an MEP, they shall be carried out in the member states."
i) The proceedings in the Court of Appeal (Criminal Division) and the application for leave to appeal from that court to the House of Lords (except Counsel's fees, for which legal aid was granted).
ii) Counsel's fees in relation to the application to the CCRC (the Firm waiving any fees in relation to that work).
iii) The appeals to the Social Security Appeals Tribunal, the Social Security Commissioner and the Court of Appeal (Civil Division), save for a small proportion paid by Mr Mote himself.
iv) The claim brought by Ms Rance.
v) The claim brought by Mr Wesson.
From 13 December 2005 to 12 June 2009, the Firm received £114,568.92 from the European Parliament pursuant to the Contract including the Annex.
The SDT Proceedings
"The [Appellant] permitted his firm to use money which had been provided by the European Parliament to fund the provision of legal services under the [Contract] for purposes that were not authorised by that contract. The [Appellant] knew or suspected that the purposes were not so authorised and thereby:
(1) (as regards conduct prior to 1 July 2007) acted in a way that compromised or impaired, or was likely to compromise or impair, his integrity and his good repute, and the good repute of his profession, in breach of paragraphs 1(a) and (d) of the Solicitors' Practice Rules 1990; and
(2) (as regards conduct from 1 July 2007) failed to act with integrity, and behaved in a way that was likely to diminish the trust the public placed in him and in the profession, in breach of Rules 1.02 and 1.06 of the Solicitors' Code of Conduct 2007; and
(3) breached Rule 22 of the Solicitors' Accounts Rules 1998."
"A solicitor shall not do anything in the course of practising as a solicitor, or permit another person to do anything on his or her behalf, which compromises or impairs or is likely to compromise or impair any of the following:
(a) the solicitor's independence or integrity;
(d) the good repute of the solicitor or of the solicitor's profession…"
As from 1 July 2007, they were replaced by rule 1 of the Solicitors' Code of Conduct 2007, which, so far as relevant, under the heading "Core duties", provided:
You must act with integrity.
1.06 Public confidence
You must not behave in a way that is likely to diminish the trust the public places in you or the profession."
There appears to be no difference in substance between these particular rules (or, indeed, between them and the current Principles 1.2 and 1.6 of the Solicitors Regulation Authority Principles 2011, which replaced the corresponding rules in the Solicitors' Code of Conduct).
i) The Appeal to the Court of Appeal (Civil Division)
£20,147.88 of European Parliament money was allocated to the fees and disbursements relating to the appeals to the Social Security Commissioner and thereafter to the Court of Appeal (Civil Division). However, once the tribunal proceedings had reached the Court of Appeal, no issues relating to Mr Mote's role as an MEP were live, and consequently (the panel found) the fees in relation to these proceedings thereafter fell outside the Contract (paragraph 34.17). The panel continued (paragraph 34.18):
"The Tribunal then considered whether the [Appellant] knew or suspected that the use of funds for this purpose was not authorised. The Tribunal noted that the narratives on the bills relating to this matter made no mention of [Mr Mote's] role as an elected representative. The invoices did not refer to the Contract. Although [Mr Mote] was no doubt of the view that there was a political dimension to the proceedings, no strike out application was made on that basis and the reason for this was that the proceedings did not relate to [Mr Mote's] role as an elected representative and the use of the funds was therefore not authorised. The Tribunal found that the [Appellant] had dissembled in his evidence on this point. However, whilst the Tribunal was not satisfied beyond reasonable doubt that the [Appellant] knew that such use of the funds was not authorised, it was satisfied beyond reasonable doubt that he suspected that it was not."
It went on to consider whether the allegation of dishonesty had been proved, which it assessed against the criteria laid down in such cases as R v Ghosh  QB 1053 and Twinsectra v Yardley  UKHL 12 (to which the panel specifically referred), which, for a finding of dishonesty, required that a person (a) acted dishonestly by the ordinary standards of reasonable and honest people (the objective limb), and (b) knew that by those standards he was acting dishonestly (the subjective limb). (The panel decision of course preceded the Supreme Court judgment in Ivey v Genting Casinos (UK) Limited  UKSC 67;  3 ELR 1212, which disapproved these dishonesty criteria in favour of a test effectively restricted to objective standards.) The panel found that, whilst it was satisfied beyond reasonable doubt that the objective limb had been proved, given that it had found that the Appellant suspected, but did not know, that the money should not be used for the purpose it was, it could not be sure that the subjective limb had been proved (paragraphs 34.20-34.21). It therefore did not find dishonesty proved.
ii) Application to the European Court
An invoice was submitted by the Firm to Mr Mote in relation to the application to the European Court to challenge the European Parliamentary waiver of Mr Mote's privilege/immunity on 12 July 2005 in the sum of £21,004.43, of which £15,129.43 was paid out of and on receipt of funds from the European Parliament on 13 December 2005. The panel found that, as the Contract only entered into force on 1 September 2005, it did not cover fees in relation to this matter incurred before that date (paragraph 34.26). It continued (paragraph 34.27):
"The [Appellant] was an experienced solicitor who had handled fraud cases and understood the importance of the wording of contracts. The Tribunal was satisfied beyond reasonable doubt that the [Appellant] at the very least suspected that work done prior to 1 September 2005 was not covered. The Tribunal could not be sure that he knew this however and proceeded on the basis that he suspected."
On essentially the same basis as set out in relation to the sub-allegation above, the panel found that dishonesty had not been proved.
iii) The Defence of Ms Rance's Claim
The sum of £25,030.12 of European Parliament money was used to fund Mr Mote's defence of the claim brought against him by Ms Rance. The panel found that the fees etc in relation to the defence of Ms Rance's claim, to the Appellant's knowledge, did not fall within the scope of the Contract; and that he acted dishonestly in relation to the attribution of this European Parliament money. It said:
"34.39 The Tribunal did not see anything in the Contract which could, on any reading, bring this type of work within its scope. The mere fact of [Mr Mote's] views on the reason behind the litigation did not bring it within scope and it did not form the basis of any application to strike out for abuse of process, nor did such issues feature in the defence of the case. The Tribunal was satisfied beyond reasonable doubt that the… proceedings were not within the scope of the Contract.
34.40 The Tribunal considered whether the [Appellant] knew or suspected that the work was out of scope. This was a new case that post-dated the Contract by approximately two years. The Respondent would therefore have been familiar with the arrangements under the Contract by that time. No waiver issue arose in respect of these proceedings and the only link made between the proceedings and [Mr Mote's] role as an elected representative was by [Mr Mote's] belief that the proceedings related to his role. If the [Appellant] had considered this to be a serious suggestion that had any merit to it the Tribunal would have expected to see an application for the matter to be struck out or stayed as an abuse of process based on that ground. No such application was made and this was because there was no proper basis for concluding that the proceedings in any way related to [Mr Mote's] role as an elected representative. The Tribunal was satisfied beyond reasonable doubt that the [Appellant] knew that the proceedings were not in the scope of the Contract."
Having found that the objective limb of dishonesty was satisfied, the panel continued:
"34.42 … The civil proceedings related to a matter that pre-dated [Mr Mote's] election and were completely unrelated to his role as an elected representative or even as a candidate. The [Appellant] was a knowledgeable and experienced solicitor and it was so blindingly obvious that these matters were outside the scope of the Contract that his evidence that he believed otherwise was incredible…. [T]he Tribunal was driven to the unavoidable conclusion that in applying the public funds to the [Ms Rance] matter he knew that he was acting dishonestly by the ordinary standards of reasonable and honest people. The Tribunal was therefore satisfied beyond reasonable doubt that the allegation of dishonesty was proved in respect of the [Ms Rance] matter."
i) Were the legal services performed by the Firm for which payments from the European Parliament "authorised by the Contract", i.e. did they fall within the scope of the Contract? In each case, the panel found that they did not fall within the scope of the Contract.
ii) Did the Appellant know or suspect that those legal services were not so authorised, i.e. that they did not fall within the scope of the Contract? In the case of the work done on the appeal to the Court of Appeal, and the work done on the application to the European Court prior to 1 September 2005, the panel were not sure that the Appellant knew, but were sure that he suspected, that the use of the funds from the European Parliament was not permitted for the purpose of paying for those legal services. In respect of the work done on the defence of Ms Rance's claim, they were sure that he knew.
iii) Finally, by reference to the two-stage, objective/subjective Ghosh test, was the Appellant's conduct dishonest? In the case of the work done on the appeal to the Court of Appeal, and the work done on the application to the European Court prior to 1 September 2005, the panel were not sure he had been dishonest: they were sure that he had acted dishonestly by the ordinary standards of reasonable and honest people, but were not sure that he knew that by those standards he was acting dishonestly. In respect of the work done on the defence of Mrs Rance's claim, they were sure that both limbs of the test were satisfied, i.e. he had been dishonest.
The Grounds of Appeal
Grounds 1 and 2
"…[T]he Contract contemplated the provision of legal and constitutional advice to [Mr Mote], in respect of matters relating to his activities as an MEP".
Postscript: Ground 1A
Mr Justice Haddon-Cave: