England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Rolls Building, Royal Courts of Justice 7 Rolls Buildings, Fetter Lane London, EC4A 1NL
		12/05/2015

Mr Justice Newey :

1. The question raised by this case is whether the intervention of the Solicitors Regulation Authority ("SRA") into the practice of Mr Michael Elsdon and Sai-Donne Limited ("Sai-Donne") should be withdrawn.

Basic facts

2. Mr Elsdon qualified as a solicitor in 1985 and practised under his own name between 1989 (or perhaps 1988) and the end of February 2013. At that stage, he acquired the goodwill and other assets of a practice that a Mr and Mrs Woolacott had been carrying on as Woolacott & Co. Mr Elsdon became a partner in a new Woolacott & Co in March 2013, and Mr and Mrs Woolacott left the practice in, respectively, April and May. Later in the year, Woolacott & Co ceased to exist, and Sai-Donne took over work previously conducted by that firm. It had already taken over Mr Elsdon's personal work .
3. Sai-Donne had been authorised as a "licensed body" for the purposes of the Legal Services Act 2007 by March 2013. It has two directors: Mr Elsdon and his wife Mrs Marianne Elsdon, who is not a lawyer. The head office is at the Elsdons' home address in Barnstaple, Devon. There are also branch offices in Lancing, West Sussex, and North Walsham, Norfolk.
4. On 8 December 2014, the SRA decided to intervene into the practice of Mr Elsdon and Sai-Donne. Notices advising the Elsdons and Sai-Donne of the intervention were sent on the following day. Shortly afterwards, Mr Elsdon and Sai-Donne applied for the intervention to be withdrawn.
5. The Decision of the Adjudication Panel records that it decided to intervene into Mr Elsdon's practice on the following grounds:

"a) There is reason to suspect dishonesty on the part of Michael Elsdon.

b) There is a failure by Michael Elsdon to comply with rules made by the SRA.

c) It is necessary to protect the interests of clients (or former clients) of Michael Elsdon or to protect the interests of the beneficiaries of any trust of which he is or was a trustee."

6. Very similar grounds were given for intervening in Sai-Donne:

"a) Sai-Donne Limited has failed to comply with the terms of its licence which requires it to ensure compliance with regulatory arrangements imposed by the SRA

b) There is reason to suspect dishonesty on the part of Mr Elsdon, a manager of Sai-Donne Limited in connection with that body's business; and

c) It is necessary to protect the interests of clients (or former clients) of Sai-Donne Limited or to protect the interests of the beneficiaries of any trust of which Sai-Donne Limited or Michael Elsdon (as a manager of that body) is or was a trustee."

Legal framework

Intervention powers

7. The Law Society (of which the SRA is a functionally independent arm performing regulatory functions) is empowered to intervene in a solicitor's practice in certain circumstances by the Solicitors Act 1974. Paragraph 1 of schedule 1 to the Act states that such powers can be exercised where (among other things):

"(a) the Society has reason to suspect dishonesty on the part of–

(i) a solicitor, or

(ii) an employee of a solicitor, or

(iii) the personal representative of a deceased solicitor,

in connection with that solicitor's practice or former practice or in connection with any trust of which that solicitor is or formerly was a trustee or that employee is or was a trustee in his capacity as such an employee;

…

(c) the Society is satisfied that a solicitor has failed to comply with rules made by virtue of section 31, 32 or 37(2)(c);

…

(m) the Society is satisfied that it is necessary to exercise the powers conferred by Part 2 of this Schedule (or any of them) in relation to a solicitor to protect–

(i) the interests of clients (or former or potential clients) of the solicitor or his firm, or

(ii) the interests of the beneficiaries of any trust of which the solicitor is or was a trustee."

8. The Law Society (through the SRA) makes rules as to professional practice, conduct, discipline and accounting matters pursuant to sections 31 and 32 of the 1974 Act, to which reference is made in paragraph 1(c) of the schedule to the Act.
9. The Legal Services Act 2007 gives the Law Society similar powers to intervene in relation to a "licensed body" such as Sai-Donne. Paragraph 1 of schedule 14 to the 2007 Act provides for powers of intervention to be exercisable where one or more "intervention conditions" are satisfied. By paragraph 1(2), the "intervention conditions" include:

"(a) that the licensing authority is satisfied that one or more of the terms of the licensed body's licence have not been complied with;

…

(d) that the licensing authority has reason to suspect dishonesty on the part of any manager or employee of the licensed body in connection with–

(i) that body's business,

(ii) any trust of which that body is or was a trustee,

(iii) any trust of which the manager or employee of the body is or was a trustee in that person's capacity as such a manager or employee, or

(iv) the business of another body in which the manager or employee is or was a manager or employee, or the practice (or former practice) of the manager or employee;

…

(f) that the licensing authority is satisfied that it is necessary to exercise the powers conferred by this Schedule (or any of them) in relation to a licensed body to protect–

(i) the interests of clients (or former or potential clients) of the licensed body,

(ii) the interests of the beneficiaries of any trust of which the licensed body is or was a trustee, or

(iii) the interests of the beneficiaries of any trust of which a person who is or was a manager or employee of the licensed body is or was a trustee in that person's capacity as such a manager or employee."

10. Guidance as to the meaning of "dishonesty" in this context is to be found in Bryant v Law Society [2007] EWHC 3043 (Admin), [2009] 1 WLR 163. The Divisional Court there held that the decision of the Court of Appeal in Law Society v Bultitude [2004] EWCA Civ 1853 stood as "binding authority that the test to be applied in the context of solicitors' disciplinary proceedings is the Twinsectra test … as it was widely understood before [Barlow Clowes International Ltd v Eurotrust International Ltd [2005] UKPC 37, [2006] 1 WLR 1476] …, that is a test that includes the separate subjective element" (see paragraph 153). The Court accordingly concluded (in paragraph 155) that, in the case before it, the tribunal "should … have asked itself two questions when deciding the issue of dishonesty: first, whether [the solicitor] acted dishonestly by the ordinary standards of reasonable and honest people; and, secondly, whether he was aware that by those standards he was acting dishonestly". This formulation echoed the House of Lords' seeming endorsement in Twinsectra Ltd v Yardley [2002] UKHL 12, [2002] 2 AC 164 of:

"a standard which combines an objective test and a subjective test, and which requires that before there can be a finding of dishonesty it must be established that the defendant's conduct was dishonest by the ordinary standards of reasonable and honest people and that he himself realised that by those standards his conduct was dishonest".

11. Overcharging in probate matters can, potentially, justify intervention on the basis of suspected dishonesty. In Sheikh v Law Society [2006] EWCA Civ 1577, [2007] 3 All ER 183, Chadwick LJ (with whom Tuckey and Moore-Bick LJJ agreed) said (in paragraph 65):

"In paragraph [68] of his judgment the judge had observed, correctly, that: 'If a solicitor charges a client too much there are clear protections for the client, in particular in non-contentious matters like probates the process of requiring the solicitor to obtain a remuneration certificate from the Law Society'. At paragraph [115] he said this:

'[115] … In any event the law provides means for the protection of clients against solicitors who show a tendency to overcharge their clients. In particular there is the remuneration certificate procedure, and of course (something which I have hinted at but not specifically mentioned yet) in contentious matters there are procedures for the assessment of costs by experienced Costs Judges and District Judges. Interventions are not needed to achieve such protection.'

The Law Society submits that that is too narrow a view of the circumstances in which it may be appropriate to use its intervention powers. It points out that an honest solicitor should be endeavouring to charge no more than he (or she) believes is due: 'The protection of the public entails placing the proper emphasis on the duty of the solicitor to consider fees honestly, and not to take advantage of clients by setting them higher than is reasonable in the first place, particularly in probate matters'. I agree: a fortiori where the solicitor, as sole executor, is himself (or herself) the client. It seems to me that evidence of persistent and deliberate overcharging in probate matters of that nature might well justify intervention on the basis of suspected dishonesty."

12. Applications for intervention notices to be withdrawn can be made under paragraph 6(4) of schedule 1 to the Solicitors Act 1974. This states:

"Within 8 days of the service of a notice under sub-paragraph (3), the person on whom it was served, on giving not less than 48 hours' notice in writing to the Society and (if the notice gives the name of the solicitor instructed by the Society) to that solicitor, may apply to the High Court for an order directing the Society to withdraw the notice."

Likewise, an application for the withdrawal of an intervention notice can be made under paragraph 3(6) of schedule 14 to the Legal Services Act 2007.

13. The Court of Appeal considered the approach to be adopted to applications under paragraph 6(4) of schedule 1 to the 1974 Act in Sheikh v Law Society. Chadwick LJ noted that, if there is a challenge to the exercise of intervention powers, "the court will need to ask itself whether the grounds under Part I of schedule 1 to the 1974 Act upon which the Society relied at the time of the resolution to intervene were made out on the basis of the information available (or, perhaps, reasonably available) to the Society at that time" (paragraph 85). "If," Chadwick LJ said, "that question is answered in the negative, then … the resolution under paragraph 6(1) is of no effect and notices served under paragraph 6(3) or 9(1) are 'fundamentally flawed' …." However, "[c]ases in which there is a challenge to the validity of the resolution under paragraph 6(1) or to the service of intervention notices are rare." Where there is no such challenge, "the single issue for the court is whether the notices should be withdrawn" (paragraph 89), and "there is no doubt that that issue must be determined on the basis of the material before the court at the time of the hearing" (paragraph 87). In addressing that question (as Chadwick LJ explained in paragraph 90):

"[T]he court must, indeed, weigh the risks of re-instating the solicitor in his (or her) practice against the potentially catastrophic consequences to the solicitor (and the inconvenience, and perhaps real harm, to his or her existing clients) if the intervention continues. In weighing the risks of re-instatement the court must have regard to the views of the Law Society as the professional body charged by statute with the regulation of solicitors … and as the body whose members are obliged, through the compensation fund, to underwrite those risks …. In a case where the Society has taken, and continues to take, the view that there are reasons to suspect dishonesty on the part of the solicitor, the court may well need to address those reasons in the context of weighing the risks of re-instatement; although, as Buckley (No 3) shows, that will not always be the case. It is important to keep in mind that (in cases where there is no challenge to the validity of the resolution or to the service of the notices) there is no free-standing requirement for the court to decide whether there are grounds for suspecting dishonesty; a fortiori, no requirement for the court to decide whether the solicitor is or has been dishonest. The issue arises (if at all) in the context of deciding whether the intervention needs to continue."

On the facts of the case, Chadwick LJ observed (at paragraph 97):

"It was unnecessary — and, I would say, inappropriate — in the present case for the judge to make a finding of honesty or dishonesty. The question which he had to decide was whether the suspicion of dishonesty raised by the material on which the Society relied had been dispelled by the oral evidence of Miss Sheikh and Mr Sampat so that he could safely direct withdrawal of the intervention notices notwithstanding the view of the Law Society, after hearing that evidence, that intervention needed to remain in place for the protection of the public. In my view he was wrong to conclude — on the basis of Miss Sheikh's demeanour as a witness — that he should answer that question in the affirmative. He was wrong because he did not address adequately the serious inconsistencies between her oral evidence at the trial on the one hand and the answers which she had given at interview, the explanations in her witness statements and the documentary material on the other hand."

The SRA Code of Conduct

14. The SRA Code of Conduct 2011 ("the Code") identifies ten "mandatory Principles" which are stated to "define the fundamental ethical and professional standards" that are expected of all solicitors and to which they "should always have regard". These are as follows:

"You must:

1. uphold the rule of law and the proper administration of justice;

2. act with integrity;

3. not allow your independence to be compromised;

4. act in the best interests of each client;

5. provide a proper standard of service to your clients;

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. run your business or carry out your role in the business in a way that encourages equality of opportunity and respect for diversity; and

10. protect client money and assets."

15. The Code came into force in October 2011, but Principles 1 to 6 correspond very closely to the "core duties" that were to be found in rules 1.01 to 1.06 of the Solicitors' Code of Conduct 2007.
16. Chapter 1 of the Code deals with client care. Among other things, it sets out "Outcomes" that solicitors "are expected to achieve in order to comply with the relevant Principles". The Outcomes include these:

"You must achieve these outcomes:

O(1.1) you treat your clients fairly;

O(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;

...

O(1.6) you only enter into fee agreements with your clients that are legal, and which you consider are suitable for the client's needs and take account of the client's best interests;

...

O(1.11) clients' complaints are dealt with promptly, fairly, openly and effectively;

O(1.12) clients are in a position to make informed decisions about the services they need, how their matter will be handled and the options available to them;

O(1.13) clients receive the best possible information, both at the time of engagement and when appropriate as their matter progresses, about the likely overall cost of their matter;

O(1.14) clients are informed of their right to challenge or complain about your bill and the circumstances in which they may be liable to pay interest on an unpaid bill;

...."

17. Chapter 11 of the Code, which is concerned with relations with third parties, specifies as Outcome 11.1:

"you do not take unfair advantage of third parties in either your professional or personal capacity"

The SRA Accounts Rules

18. Rule 1 of the SRA Accounts Rules 2011 ("the Accounts Rules"), which is headed "The overarching objective and underlying principles", provides as follows in rule 1.2:

"You must comply with the Principles set out in the Handbook, and the outcomes in Chapter 7 of the SRA Code of Conduct in relation to the effective financial management of the firm, and in particular must:

(a) keep other people's money separate from money belonging to you or your firm;

(b) keep other people's money safely in a bank or building society account identifiable as a client account (except when the rules specifically provide otherwise);

(c) use each client's money for that client's matters only;

(d) use money held as trustee of a trust for the purposes of that trust only;

(e) establish and maintain proper accounting systems, and proper internal controls over those systems, to ensure compliance with the rules;

...."

19. Rule 14.1, dealing with "Use of a client account", states:

"Client money must without delay be paid into a client account, and must be held in a client account, except when the rules provide to the contrary".

20. Rule 20, dealing with "Withdrawals from a client account", stipulates that money may be withdrawn from a client account only when it is:

"(a) properly required for a payment to or on behalf of the client (or other person on whose behalf the money is being held);

(b) properly required for a payment in the execution of a particular trust, including the purchase of an investment (other than money) in accordance with the trustee's powers;

(c) properly required for payment of a disbursement on behalf of the client or trust;

(d) properly required in full or partial reimbursement of money spent by you on behalf of the client or trust;

...."

Mrs Lilley's estate

Introduction

21. It can be seen from the Decision of the Adjudication Panel that the intervention was largely (though by no means entirely) based on matters relating to the estate of a Mrs Kathleen Lilley. Such matters also occupied much of the hearing before me. I shall therefore address the administration of Mrs Lilley's estate before turning to the other matters that are said by the Law Society to justify the continuation of the intervention.

Narrative

22. Mrs Lilley died on 17 August 2008. Under her will, which she had made in 1999, her estate was to be shared between her three children: Mr Arthur Lilley, Mr John Nind and Mrs Jane Mackenzie. Mr Lilley and Mr Elsdon were named as executors, and probate was granted to them on 20 April 2010. The estate realised some £159,000, almost the entirety of which was accounted for by Mrs Lilley's home, which was sold in January 2011 for £157,000.
23. On 30 March 2009, after being told of Mrs Lilley's death, Mr Elsdon sent Mr Lilley a letter enclosing terms of business which stated, among other things, that his fees were based on a charging rate of £250 an hour plus VAT and that the charging rate was reviewed in January and July of each year. Mr Elsdon also said in his letter:

"I am appointed by the Will as executor and as such my Client is the estate. However, if you would like me to act for you please let me know and I will forward you a letter to comply with the Solicitors Code of Conduct 2007."

24. On 18 May 2011, Mr Elsdon wrote to Mr Lilley about withdrawals that had been made from his mother's building society account before her death. The letter included, for example, the following:

"I understand that your late mother's needs were small with no more than £10 a week required for food. In the six months prior to the date of death £4,630 was withdrawn in cash. Allowing £260 for food in that time please let me know what the surplus £4,370 was used for."

25. Mr Lilley replied the next day. After observing "If you think anyone can survive on £10.00 for food per week I am afraid you are mistaken," he proceeded to detail sums that he estimated were spent on his mother each week in respect of items such as food, toiletries, cleaning materials, power, water, newspapers, care costs and the telephone. The letter concluded:

"I will ask again. How much longer it is likely to be before my late mothers estate is finally settled? Completion on the sale of the property … was on 14^th January 2011, now four months ago. I am becoming increasingly concerned that the longer this drags on the higher the costs are going to be."

26. Mr Elsdon had also written to Mr Nind and Mrs Mackenzie on 18 May 2011. He asked them to sign and return the letter to confirm that they did "not wish [him] to take any further action about the cash withdrawals by Mr Lilley from your late mother's Nationwide Building Society account or the other suspicious behaviour by Mr Lilley". Each of them countersigned the letter as asked.
27. In letters dated 25 July 2011, however, Mr Elsdon told Mr Nind and Mrs Mackenzie that "as Co-Executor" he was "extremely concerned about what has occurred". Mr Elsdon also pressed Mr Lilley repeatedly for further information and told him that "the majority of the delay and extraordinary circumstances relating to the Estate have been occasioned as a result of your conduct which continues".
28. On 1 November 2011, Mr Elsdon contacted the police. Having said that Mr Lilley had withdrawn £31,895 from his mother's building society account between March 2005 and August 2008, he said:

"Mr Lilley has been given every opportunity to provide a reasonable explanation for the money he took and has also been offered an opportunity to make restitution. Unfortunately he has not done anything except to go back to his Solicitors to ask them to represent him."

On 15 December, however, Detective Constable Randall said (as can be seen from an attendance note) that there were "no grounds to pursue Mr. Lilley for theft". The attendance note also records:

"DC Randall does not feel that the explanation given by Mr. Lilley in his letter of 19^th May 2011 would be considered by the CPS to be unreasonable."

29. Mr Elsdon reverted to the police in the following year. On 24 July 2012, however, DC Tyrrell sent Mr Elsdon an email in which she said:

"I understand that DC Randall had already looked at the allegation that this ladies son might have misappropriated some of her money but he found no evidence to support this. We cannot assume that he was acting against his mother's wishes when she was alive. I am told that the closing balance in the Nationwide account of just over £2,000.00 which is 'un-accounted for' tallies with the cost of Mrs KL's funeral expenses.

In relation to the more recent allegations of ill treatment and/or neglect of Mrs KL by her son and/or daughter in law; again we have no evidence to support this. There is some evidence to suggest that Mrs KL's wishes were being respected and accommodated appropriately."

When Mr Elsdon queried this view, DC Tyrrell wrote:

"We fully accept that Mrs KL's house was in a poor state of repair and that her health and physical condition deteriorated towards the end of her life, however, there is evidence to suggest that she chose to remain at home with the package of care rather than go into a nursing or residential home. This is not an unusual decision for a person of her age to make …."

Mr Elsdon told the police in September that he had "received further evidence", but DC Tyrrell did not change her position.

30. By the end of July 2011, Mr Elsdon had produced three invoices addressed to "Exors of Mrs K I P Lilley deceased". Between them, they covered the period from 10 February 2009 to 22 July 2011 and were for a total of £50,701.82. The first bill, in respect of the period up to 11 July 2010, adopted a charging rate of £250 an hour, but the other bills were based on a charging rate of £275 an hour. Mr Elsdon asked Mr Lilley to "let [him] know by what amount [he was] prepared to reduce [his] share in the residue as compensation to the other beneficiaries".
31. On 24 October 2011, Mr Elsdon rendered a fourth invoice, for the period from 23 July. The amount billed was £3,300 (inclusive of VAT).
32. Mr Lilley having declined to approve his charges, at about the end of October 2011 Mr Elsdon initiated an application to the Court for his bills to be assessed. Mr Elsdon emailed Mr Nind and Mrs Mackenzie about the proceedings on 19 January 2012. The email to Mrs Mackenzie, for example, included this:

"Mr Lilley is causing a great deal of trouble and as you will see at the moment there is no end to this dispute and all the time more costs are being incurred.

Therefore I have been thinking how we can put a stop to this situation and the estate funds be distributed.

You and Mr Nind have already kindly confirmed that you have no objection to my bills. As there are three residuary beneficiaries Mr Lilley is in effect arguing about one-third of the costs.

Therefore I suggest that I make an offer to Mr Lilley through his Solicitors and further offers as necessary that will compel them to settle the dispute."

On 10 February 2012, Mr Nind emailed back:

"I can confirm that both I and Jane Mackenzie are willing to take your advice and therefore will offer Jimmy Lilley, as you suggested, up to £5000 from each of our share to get this matter resolved speedily. Thank you for your offer to adjust your costs, we are very grateful."

33. On 14 February 2012, Mr Elsdon put forward a Part 36 offer. He said in an email to Mr Lilley's solicitors that he would agree to "the claim being settled on a reduction of 30% of the profit costs and VAT … from a total of £53,909.51 to £37,736.66". In emails to Mr Nind and Mrs Mackenzie, Mr Elsdon said:

"I have sent an offer to Mr Lilley's Solicitors today. You have agreed that you would pay your one third of my fees and the offer I have made equates to a reduction of 30% in my fees for Mr Lilley and includes £2,695.48 from the £5,000 you have agreed to contribute to pay off Mr Lilley."

It is apparent from the documents that Mr Elsdon had it in mind to reduce Mr Lilley's "share" of the bills by 30% but to recoup all the shortfall from Mr Nind and Mrs Mackenzie.

34. On 10 April 2012, Mr Elsdon made another offer along the same lines, but on the basis that Mr Lilley's "share" of the bills would fall by 40% instead of 30%. He noted in his email to Mr Lilley's solicitors that the offer was "made as Mr Nind and Mrs Mackenzie have agreed that my fees should be paid in full and have offered further support in order to assist".
35. Detailed assessment of the four bills was ordered pursuant to section 70 of the Solicitors Act 1974. On 22 November 2012, Master Gordon-Saker assessed the bills in the sum of just £7,922.46, including VAT. In the course of his judgment, Master Gordon-Saker remarked that the work "involved no real complexities", that the "time spent is quite extraordinary having regard to the work that was required" and that he could not understand why certain work was being done. He said, too:

"[I]t seems to me that the hourly rate charged by [Mr Elsdon] is excessive for this work and the cost of the work has been increased significantly by the fact that all of the work has been done at [Mr Elsdon's] rate and none of the work has been delegated. It seems to me that the time spent is also excessive even allowing for the wrinkles to which I have referred."

36. The order made following the hearing before Master Gordon-Saker provided, by paragraph 1, for the "Bills rendered by [Mr Elsdon] the subject of these proceedings" to be "assessed in the total sum of £7,922.46 including value added tax". Paragraph 2 stipulated that Mr Elsdon was to pay Mr Lilley's costs of the proceedings, assessed in the sum of £14,492.12.
37. On 23 November 2012, Mr Elsdon sent a barrister whom he had hoped would represent him at the hearing before Master Gordon-Saker a lengthy email of complaint about the previous day's "disaster". Almost at the beginning of the email, Mr Elsdon said this:

"For bills totalling £54,001.82 I have been allowed £7,922.46 which is an incredible loss of £46,079.36

In addition I am ordered to pay the Defendant's Costs of £14,449.12 as well as paying my own Costs. Therefore for years of work I have a net loss of £30,554.82

With the loss on my bills my total loss is £84,556.64."

On the same day, Mr Elsdon sent Mrs Mackenzie an email incorporating most of the email he had sent to the barrister. The email to Mrs Mackenzie did not, however, include the paragraphs I have just quoted, and there was no other mention in the email of the figure at which Mr Elsdon's costs had been assessed.

38. On 27 November 2012, Mr Lilley's solicitors wrote to Mr Nind and Mrs Mackenzie direct. They explained that Master Gordon-Saker had reduced the bills by 85% and that, in the writer's opinion, over-charging by that degree was "a serious breach of trust". The solicitors suggested that the residuary beneficiaries "take the initiative and resolve together to bring the administration to an end". That led Mr Nind to email Mr Elsdon to say that he and Mrs Mackenzie were "deeply worried" and had "very little faith left in the justice system". Mr Nind said:

"We … value our sanity and physical health and cannot go on."

In his response, Mr Elsdon concluded:

"[A]s stated my personal feelings come second and I will do whatever you wish

Any offer from Mr Lilley's Solicitor is for Mr Lilley's benefit and his attempts to prevent proceedings against Mr Lilley are an indication that he knows that the evidence against Mr Lilley is strong."

39. On 30 November 2012, Mr Elsdon transferred £39,962.03 from client account to office account. The £39,962.03 represented the aggregate of two thirds of the gross amount of the bills that Master Gordon-Saker had assessed, one third of the £7,922.46 at which he had assessed them, and £1,320 in respect of certain disbursements.
40. In January 2013, Mr Elsdon prepared a further bill, again addressed to "Exors of Mrs K I P Lilley deceased". This employed a charging rate of £275 an hour (like its immediate predecessors), related to the period from 25 October 2011 to 9 January 2013 and was for a total of £20,658.44. The bill was provided to Mr Nind and Mrs Mackenzie, but not to Mr Lilley until November 2013.
41. On 27 February 2013, Mr Elsdon transferred £10,329.22 from client account to office account. This represented half of the £20,658.44 billed.
42. In March 2013, Mr Elsdon made distributions of £25,580.20 each to Mr Nind and Mrs Mackenzie. On 25 February, Mr Nind and Mrs Mackenzie had each said in an email to Mr Elsdon:

"I am sure that you have prepared the accounts with a lot of care, therefore I agree that these are the final amounts due to [us]."

43. Neither then, nor subsequently, has Mr Lilley received any of his mother's estate, even though she died as long ago as 2008.
44. In the meantime, Mr Elsdon had applied for permission to appeal against Master Gordon-Saker's judgment. On 31 July 2013, Roth J granted such permission as regards one of the six proposed grounds of appeal. The reasons Roth J gave for his order included the following:

"I should make clear that as regards the allegations of neglect or ill-treatment of the deceased by [Mr Lilley], I do not regard that investigation as part of the duty of an executor or trustee under the will. If the other surviving relatives wished [Mr Elsdon] to investigate such allegations with a view to a possible claim, [Mr Elsdon] would then be acting on their instructions and would need to look to them for his fees. In any event, as the Judge observed in the colloquy with Counsel following the first part of his judgment, that work largely came after the period covered by the final bill ….

The fact that the other two beneficiaries did not dispute the bills is of little relevance. [Mr Lilley] as an executor was entitled to dispute the bills and once an assessment is carried out the court is required to determine the fair and reasonable charge. The argument that the dispute concerned only [Mr Lilley's] one third share is wholly misconceived: the bills were a charge on the estate."

45. On 15 November 2013, Mr Elsdon's appeal against Master Gordon-Saker's judgment was dismissed or perhaps withdrawn in the course of the day. According to the note made by Mr Lilley's solicitors, Peter Smith J said this during the hearing:

"With regard to the claim against the Respondent, it is up to the other beneficiaries to decide whether they are willing to allow their inheritance to be spent in this way. If they do, the Appellant may be advised to apply for a Beddoes Order. I cannot stop the Appellant doing this, but I do not encourage any further expenditure on this estate. It has been 3½ years since the death of Mrs Lilley and there has been no distribution. Executors are given one year to distribute. There should have been an interim distribution in January 2011 after the house was sold. I can see no basis for an interim distribution not to be made."

46. Going back in time, on 7 June 2012 Mr Elsdon asked a Professor Hodkinson to prepare a report on Mrs Lilley. On 11 June, Professor Hodkinson rendered an invoice for £1,962 in respect of his report and explained, "I am sorry the fees are so high but it took a long time to consider so many questions". According to Mr Elsdon, he prepared a letter dated 25 June with which, had it been sent, a cheque in Professor Hodkinson's favour would have been enclosed. In the event, however, no payment had been made to Professor Hodkinson by 10 July, when Mr Elsdon transferred £1,962 from client account to office account. In an email to Mr Nind of 14 January 2013, Mr Elsdon said that payment had "been made" in respect of, among other things, "Professor Hodkinson £1962.00". When calculating in the February the amounts to be distributed to Mr Nind and Mrs Mackenzie, Mr Elsdon charged half of the £1,962 (i.e. £981) to each of them. When, however, Professor Hodkinson complained on 30 July that settlement of his invoice was seriously overdue, Mr Elsdon said in his reply:

"In the circumstances I trust that I will hear no more of this matter failing which I must refer the matter to the General Medical Council and the Bar Council as apart from the sub-standard Report and the failure to attend to what was requested I have been unhappy for a long time about your quoting £140 an hour plus VAT for a Report and then charging the estate almost two thousand pounds."

Professor Hodkinson has since brought proceedings to recover the £1,962.

47. It may be worth noting that Mr Elsdon himself appears to have charged £1,815 (including VAT) for the preparation of the instructions to Professor Hodkinson. A further £610.50 (including VAT) was apparently charged for correspondence and telephone calls with Professor Hodkinson.
48. In January 2012, Miss Caroline Allen of counsel represented Mr Elsdon at a hearing before Master Gordon-Saker. Following the hearing, Mr Elsdon was sent a fee note for £1,800, but he objected to this figure and it was reduced to £900. On 25 April, Mr Elsdon sent Miss Allen's clerk a cheque for the £900, and money was transferred out of client account on 25 May to cover the payment. When calculating the amounts to be distributed to Mr Nind and Mrs Mackenzie, Mr Elsdon charged half of the £900 (i.e. £450) to each of them.
49. On 12 March 2014, Mr Elsdon sent emails to Mr Nind's widow (Mr Nind having died in November 2013) and Mrs Mackenzie in which he said:

"Mr Lilley and his Solicitors are now playing on these complaining to the Solicitors Regulation Authority and the Legal Ombudsman and generally endeavouring to ruin my reputation and consequently my livelihood.

My wife and I have a son who is almost 21 but is profoundly autistic and cannot speak. My wife does everything for him. She feeds him and cooks separately for him on a special diet, she cleans his teeth, shaves him, baths him every night and washes his bedclothes and bedroom floor when he fouls them or there is blood from where he hits his head on the walls. Consequently she does not go out to work. We also have 3 other sons two are in full time education and all are financially dependent on me.

It is no exaggeration to say that if Mr Lilley and his Solicitors succeed in their campaign against me I will not be able to continue in practice which would mean we would have to sell our home and our son would have to go into an institution and all our lives would be ruined ….

Previously I asked for your support in the claims against Mr Lilley. I did not intend that you would have to take any part or be involved at all only to say you support me. If you said you support me that would stop Mr Lilley and his Solicitors immediately – there would be no need for you to be further involved. I would be grateful if you will reconsider."

50. On 23 May 2014, Mr Lilley's solicitors asked Mr Elsdon to agree to his (Mr Elsdon's) removal as an executor if he was unable or unwilling to wind up the estate quickly and warned that an application for his removal would otherwise be made on a hostile basis. They enclosed a statement from Mrs Mackenzie expressing support for such an application. On 31 May, however, Mrs Mackenzie sent Mr Elsdon an email in which she said that she regretted signing the statement.
51. In the meantime, Mr Elsdon had suggested to Mr Nind's widow that she could finally end her involvement by confirming that "any benefit due to [her] from action against Mr Lilley is to be given to a charity". On 10 June, Mr Elsdon made the same suggestion to Mrs Mackenzie, and in emails of 12 June Mr Nind's widow and Mrs Mackenzie each said that any benefit that would have been due to them from any action against Mr Lilley was to be given to specified charities.
52. On 21 July 2014, Mr Lilley's solicitors invited Mr Elsdon to consent to a draft order that would have removed him as a personal representative. No such consent having been provided, proceedings were issued later in July.
53. By 26 August 2014, Mr Elsdon had himself issued proceedings against Mr Lilley. At about this time, he wrote to the charities that Mr Nind's widow and Mrs Mackenzie had identified to ask them whether they could provide someone to take over from Mr Lilley as executor. On 22 September, Mr Lilley's solicitors served a robust defence in which, among other things, they described the claim as "a transparent and disgraceful tit-for-tat response" and "an appalling waste of resources in a simple estate which ought to have been wound up years ago". On 30 October 2014, Mr Elsdon issued proceedings for the removal of Mr Lilley as an executor.

Comment

54. Standing back from the detail, what has happened in relation to Mrs Lilley's estate is extraordinary and disturbing. Mrs Lilley's estate was quite a modest one, but her testamentary dispositions were straightforward and the principal asset in her estate was sold by early January 2011. By the time, however, that the SRA intervened in December of last year, more than six years had passed since his mother's death without Mr Lilley having received anything at all from her estate, and his siblings had been paid less than £26,000 each. In contrast, Mr Elsdon had taken more than £50,000 from the estate, admittedly including some disbursements but (a) excluding, among other things, the £1,962 withdrawn in respect of Professor Hodkinson's fee but never in fact paid on to him and the £900 transferred to cover Miss Allen's fee and (b) despite bills totalling some £54,000 having been assessed at just £7,922.46. To add to the disquieting oddities, Mr Elsdon was bringing proceedings against his co-executor (i.e. Mr Lilley) notwithstanding that (a) the other beneficiaries had renounced any benefit from such proceedings so that the only beneficiary who could "benefit" from the claim was Mr Lilley himself, (b) the police had twice declined to proceed and (c) the amounts at stake would seem to have been relatively small even if the proceedings had been well-founded. It is hard to avoid the conclusion that, with Mr Elsdon as an executor, things had gone very seriously wrong.
55. The bills that Mr Elsdon has rendered give rise to a number of concerns. As a starting-point, the enormous extent to which Master Gordon-Saker reduced the bills that he assessed indicates over-charging on a very substantial scale. That there was such over-charging is, moreover, confirmed by the evidence of Ms Susan Corbin, a costs lawyer who has provided expert evidence in the present proceedings.
56. A second source of concern is the fact that Mr Elsdon saw fit to pay himself £39,962.03, including two thirds of the gross amount of the bills that Master Gordon-Saker had assessed, a matter of days after the bills had been reduced to £7,922.46. In justification, Mr Elsdon has pointed out that Mr Nind and Mrs Mackenzie did not object to his bills. I find it hard to imagine, however, that an experienced solicitor would believe that this entitled Mr Elsdon to behave as he did. Mr Nind and Mrs Mackenzie were not clients of Mr Elsdon and he had not invoiced them for anything. The only relevant bills were all addressed to Mrs Lilley's executors, and, as is clear from Master Gordon-Saker's order, those bills had been "assessed in the total sum of £7,922.46 including value added tax". On top of that, Mr Nind and Mrs Mackenzie will to an extent have based their views on what they were told by Mr Elsdon. In that connection, it is noteworthy for instance that, when Mr Elsdon emailed Mrs Mackenzie on 23 November 2012, he did not include the financial information quoted in paragraph 37 above or mention the figure at which his costs had been assessed, let alone tell her that he was not entitled to charge more than the assessed figure. It is also striking that Mr Elsdon did not make any repayment even after Roth J had noted that the "argument that the dispute concerned only [Mr Lilley's] one third share is wholly misconceived" (see paragraph 44 above).
57. Thirdly, the £20,658.44 bill that Mr Elsdon prepared in January 2013 is troubling both as regards possible over-charging (especially since it was based on a charging rate of £275 an hour despite Master Gordon-Saker's criticisms of that rate) and because it was withheld from Mr Lilley until November 2013. What good reason can there have been for that?
58. More specific issues arise in relation to the fees of Professor Hodkinson and Miss Allen. Mr Elsdon and Sai-Donne cannot have been entitled to withdraw and retain £1,962 in respect of Professor Hodkinson's fee, and to make consequential deductions from the distributions to Mr Nind and Mrs Mackenzie, when Professor Hodkinson had not been paid anything and, to the contrary, Mr Elsdon was disputing the fee. I agree with Mr Timothy Dutton QC, who appeared with Mr Andrew Peebles for the Law Society, that Mr Elsdon had no business transferring the money out of client account unless he was going to pay it on to Professor Hodkinson at once. Nor, as it seems to me, can it have been proper to charge Mr Nind and Mrs Mackenzie for a fee that Mr Elsdon had incurred for instructing a barrister (Miss Allen) to represent him in the assessment proceedings.
59. As Mr Dutton submitted, these various matters suggest breaches of the Code's Principles and Outcomes (including Outcome 11.1) and of the Accounts Rules (in particular, rule 20). They are also, as it seems to me, indicative of dishonesty. As is evident from Sheikh v Law Society, it would not be appropriate for me to make any finding of dishonesty (or honesty). What I can say is that, in my view, the matters to which I have referred give good reason to suspect dishonesty. In other words, there is good reason to suspect that Mr Elsdon's conduct was dishonest by the ordinary standards of reasonable and honest people and that he himself realised that by those standards his conduct was dishonest.
60. Choosing his ground wisely, Mr Jeremy Barnett, who appeared for Mr Elsdon and Sai-Donne, did not maintain that there was no scope for criticism of Mr Elsdon. He argued, however, that the evidence did not justify intervention. At most, the evidence could warrant disciplinary proceedings. There is, Mr Barnett submitted, no clear and cogent evidence of dishonesty.
61. I shall return at the end of this judgment to whether the intervention should be withdrawn. I do not, however, accept the submission to which I referred in the last sentence of the preceding paragraph. To my mind, Mr Elsdon's conduct in relation to Mrs Lilley's estate does provide clear and cogent evidence of dishonesty.

Other matters

62. Various other issues are canvassed in the evidence. I consider many of them below. I do not think I need address every one for the purposes of this judgment.

Mrs Glass

63. A Mrs Betty Glass died on 28 August 2008 leaving a will by which she appointed Mr Elsdon and her friend Mr Culley as executors and gave all her estate bar £9,000 to Mr Culley. In October 2008, Mr Culley asked Mr Elsdon to renounce probate, but the latter pressed for the production of Mrs Glass's papers. Mr Culley said that he would deliver the documentation once a costs estimate had been provided, but Mr Elsdon said that he was not obliged to supply one and, in December, went to the lengths of instructing counsel to advise on whether Mr Culley was to be treated as a client and so given the best possible information about costs. After he had also contacted the SRA, Mr Elsdon estimated his costs at £7,500 plus VAT, while stressing that he would not be bound by the figure. In March 2009 Mr Elsdon issued proceedings against Mr Culley in respect of the documents, and in the July Mr Elsdon told Mr Culley that by forwarding the papers he had admitted the claim and so was liable for costs. When Mr Culley had agreed to pay the costs, Mr Elsdon put in a bill for, in total, £12,380.26. He further said that he would agree to payment being postponed provided that the bill was not disputed and he received interest at the judgment rate.
64. In the course of the administration, Mr Elsdon saw Mr Culley's driving licence and queried the spelling of his middle name (Bennell or Bennel). Despite being told by Mr Culley that the DVLA had made an error, Mr Elsdon informed the DVLA that Mr Culley had knowingly used a driving licence with an incorrect spelling of his middle name for 18 years and asked whether any offences had been committed. The DVLA replied that none had.
65. In the end, Mr Elsdon submitted invoices for £27,253.33 plus VAT (on top of the costs of the claim he had brought against Mr Culley). (By way of comparison, the balance of the estate was calculated to be worth about £59,000 in April 2011.) Ms Corbin, however, has valued Mr Elsdon's work at £8,221.65 and sees no justification for the proceedings against Mr Culley.

Mr Thompson

66. In 2011, a Mr Christopher Thompson instructed Mr Elsdon in relation to his application to the Court of Protection for his appointment as deputy for the property and affairs of his father. On 18 July 2011, Mr Elsdon told Mr Thompson in a letter that the costs of the application were £5,512.50 plus VAT up to 15 June and that there "should not be much more work required in order to obtain the Order". In the event, Mr Elsdon billed, it seems, some £10,107.50 plus VAT. When Mr Thompson expressed unhappiness about the charges, Mr Elsdon asserted a lien; told him that, if he wished to complain, "matters would need to be placed before the Court which would cause further time expended and possible additional Costs"; and said that he (Mr Elsdon) had a "right of action against [Mr Thompson's] father for damages for his attempt to kill [Mr Elsdon] which would cause a reduction in his funds as to the Costs of the claim and any damages awarded". Mr Elsdon ended his letter:

"At this stage if you forward me a remittance in full amount of the invoices I have sent to you I will forward you the documents you have requested. This offer must be on the understanding that all matters would be settled between us…."

67. Mr Elsdon's bill was provisionally assessed by a costs officer on 28 March 2012 at £6,046.60 plus VAT, a reduction of £4,090.90 (excluding VAT). Ms Corbin has valued the work Mr Elsdon did at just £1,927.20 plus VAT.

Mr Gregory

68. A Mr Christopher Gregory died on 5 August 2012 leaving a will by which, among other things, he appointed the partners in Woolacott & Co as his executors, gave £10,000 to Cats Protection and left his residuary estate to his two children. The will also contained the following provision:

"IF I own pet cats at the date of my death I wish Worthing & District Cats Protection to take over the care and well being of the cats until such time as a new home can be found for them together then I GIVE a further sum of £5000.00 to The Cats Protection, National Cat Centre of the Worthing & District Branch towards the care and well being of my cats while awaiting rehoming."

69. Probate was granted to Mr and Mrs Woolacott on 23 October 2012.
70. On 9 December 2013, Mr Elsdon expressed the view that both legacies to Cats Protection took effect. On 13 December, Cats Protection wrote to "Woolacott & Co" drawing their attention to "the fact that statutory interest at 0.3% per annum is payable on all pecuniary legacies from the anniversary of the death of the deceased", but observing that they appreciated that there might be reasons preventing the distribution of pecuniary legacies within the usual year. In subsequent correspondence with Cats Protection, Mr Elsdon said that he "was surprised at the attitude of your charity to a gift" and then on 11 February 2014:

"The interest on the legacy that may be payable to your charity amounts to £30 a year and you must have cost your charity far more than that in wasted time and expense.

I confirm that I have never before experienced a charity making such a mercenary request and as a result you have cost your charity a substantial legacy that would otherwise have been left to it."

71. In a subsequent email to Cats Protection, Mr Elsdon said that his reference to having cost the charity a legacy did "not of course refer to the estate of Christopher Gregory" but to a gift that Cats Protection would have received from him personally. Whereas, however, he had previously said that both gifts to Cats Protection were effective, he now questioned this. On 27 February 2014 Mr Elsdon said that "the events raise complex legal issues", and on 2 April he wrote to Cats Protection:

"Please let me [know] if you intend to pursue a claim for the additional £5,000. If so it will be necessary to obtain Counsel's Opinion to decide the issue."

Mr Elsdon said in the same email that "[f]or a charity it would be appalling to house cats to obtain a legacy", and a couple of days later he said that the correspondence showed "a mercenary attitude quite shocking to someone viewing the matter impartially as I do". On 3 June, Mr Elsdon said that he had "found the staff at Cats Protection to be mercenary and unco-operative throughout", complained that someone from Cats Protection had been contacting a residuary beneficiary "where there is a dispute and where the residuary beneficiary is a witness" and stated:

"Our Client is the estate and although we are willing to take the views of residuary beneficiaries into account it is our decision as to how the matter proceeds."

On the following day, however, Mr David Gregory, one of the residuary beneficiaries, forwarded to Mr Elsdon an email from Cats Protection "confirming that they do not wish to receive the additional £5,000.00".

72. During this same period, Mr David Gregory and his sister, the other residuary beneficiary, were expressing concerns about cost and delay. Mr Gregory told Mr Elsdon on 28 February 2014 that he and his sister "would like closure of the estate", and on 5 March he said that they would like an idea of the cost so far. The frustration Mr Gregory evidently felt can be seen from an email to Mr Elsdon of 25 April in which he said:

"PLEASE CAN YOU CONFIRM THE COST INCURRED SO FAR FOR ANY MATTERS RELATING TO MY LATE FATHER ESTATE INCLUDING THE SALE OF THE FAMILY HOME AS I HAVE ASKED FOR THIS ON A NUMBER OF OCCASIONS AND SO FAR I HAVE NOT RECEIVED A VALID REPLY YOU MERELY REPLY THAT THIS IS NOT POSSIBLE AT THIS TIME."

Mr Gregory ended his 4 June email:

"We do not wish to receive a further 'long e-mail' justifying your position. You have our instructions and so please deliver what we have requested."

73. For his part, Mr Elsdon made, among others, the following points in his emails to Mr Gregory and his sister:

"Our final invoice will be costed when all the work on the case has been completed in the usual way ....

As previously mentioned the most cost effective way for you is to allow me to complete my work knowing that I will deal with all matters as quickly as reasonably possible. Additional correspondence merely adds to the Costs."

"Your father appointed the firm as his Executors and therefore our client is the estate ....

I may have previously mentioned that I suffer from asthma which is a life threatening disease made much worse by stress. Therefore I am not taking any calls at the moment but endeavouring to continue mainly by email."

"The correct time to calculate costs is when the administration has been completed to the point when there can be a final distribution. However in view of your email and as you are now specifically requesting details of my costs to date please see the attachment for copies of the bills for the work I have carried out."

"The email you sent on 4 June clearly has not been written by you. It is completely different from the emails you usually send

Please let me know who has assisted you with the email or written this email for you ....

With regard to the final paragraph of the email the length of any email from me depends on the number of matters I am required to deal with. There has never been any email from me justifying my position as I have nothing to justify. I have been dealing with the administration as required and explaining matters to you at your request. You are not our Client and therefore not in a position to give instructions.

I would be grateful if in future any emails from your email address are written by you."

Miss Read

74. A Miss Olive Read died in November 2013 leaving a will by which she named Mr Woolacott as her executor. On 20 November, Mr Brian Read, a residuary beneficiary, telephoned "Woolacott & Co" (i.e. Sai-Donne). An attendance note made by someone working for Sai-Donne records:

"I explained that you would be dealing with this and he was happy with that. Do we have an initial client care letter that we need to send?"

75. However, on 2 December 2013, before (it seems) Mr Read had received Sai-Donne's terms and conditions, a Mrs Pugh (who was also a residuary beneficiary) emailed to say that her own solicitors were happy to handle probate but required something from Mr Elsdon "signing over the responsibility to them". Mr Elsdon replied that it would "not be necessary for [Mrs Pugh's] Solicitors to be involved", but on 23 December a firm called Stevens Drake wrote to say that they had been instructed by two of the residuary beneficiaries to deal with the administration of the estate and that Mr Woolacott had renounced probate. On 24 January 2014, Mr Elsdon emailed that the "purported Renunciation" was in breach of his agreement with the Woolacotts and "consequently as a matter of law invalid". Shortly afterwards, Mr Elsdon sent Mr Read a bill for £495 and said that he would "exercise our lien" until paid. During February, the Brighton and Winchester District Probate Registries confirmed that Mr Woolacott's renunciation was valid, but, when asked for the deeds, Mr Elsdon asked for a cheque to be forwarded "for our outstanding fees". Stevens Drake replied that Mr Elsdon/Sai-Donne had "no right to exercise a lien simply because there was no retainer" and said:

"you will not be paid for work which you were not instructed to carry out".

Mr Elsdon responded that he would send the deeds but "the manner in which you conduct matters is deplorable".

Mr Marchant

76. Mr Elsdon/Sai-Donne acted for a Mr John Marchant on the sale of a commercial property. The transaction appears to have completed on 7 April 2014, following which Mr Marchant told Mr Elsdon that he expected the moneys to be transferred as soon as possible and that he would not at that stage be paying Mr Elsdon's bill (which had been raised on 4 April for £2,658.45) as he understood that doing so would make it impossible for him to challenge the bill. On 7 May, in one of a number of chasers, Mr Marchant said:

"I expect to receive the funds from the sale, less your invoice by Monday at the latest….

Please also be aware that I'm still not [accepting] your invoice and I'm in the process of instructing a solicitor on this matter. Once I have received the funds on Monday you will receive an offer in writing regarding settlement of your massively inflated invoice and a official complaint on the way I have been dealt with over the last 15 months, depending on your decision I will then decide how to proceed."

77. However, Mr Elsdon said on 9 May 2014:

"If you had not made an objection the funds would have been sent as soon as I received the signed Transfer. Therefore it is not reasonable for you to object to funds not yet being sent to you when the only reason they have not is because of a situation you have created."

78. In an email of 15 May 2014, Mr Elsdon said:

"The bill sent was on the basis that there would be no dispute and therefore necessarily include reductions for goodwill. With regard to the thousand pounds of work for which I have not billed I reserve the right to charge for these as it is completely unfair for me to do thousands of pounds of work free of charge and then be subject to this correspondence about additional fees for some of the work at the end when the massive amount of additional work from March to December was not charged."

79. On 23 May 2014, Mr Marchant emailed:

"I want my money, less the invoice amount transferred immediately, you have no right to hold onto the balance while you are awaiting the outcome of this situation ….

I will say it again as it doesn't seem to be getting through to you I want the balance transferred into my account and you can keep the invoice amount!"

Mr Elsdon replied:

"Please let me know if you are now saying that you wish to accept the invoice rendered to you and on receipt of the balance the matter will end there.

If so I will not prepare additional bills and will also let the matter rest there"

Mr Marchant having said "I am", Mr Elsdon gave instructions for £9,194.18 to be paid to him.

Dealings with the Legal Ombudsman

Miss Parker

80. It appears from a report prepared on behalf of the Legal Ombudsman ("the Ombudsman") that:

i) A Miss Parker retained Mr Elsdon in April 2011 to complete the conveyancing on the sale of a property;

ii) At that stage, the costs were estimated at £249 plus VAT. In July 2011, however, Miss Parker was charged £3,208.48, which was stated to represent £3,795.48 less a discount for goodwill;

iii) After Miss Parker had complained, she was billed for the full £3,795.48.

81. The report concluded:

"[I]n my opinion, an amount of £2,331.68 inclusive of VAT is to be refunded to Miss Parker in respect of charges made that should have been advised to her separately and not just included in the terms and conditions. In addition, a payment of £200 to Miss Parker for the distress and inconvenience of pursuing the matter with the firm. Therefore, in total, a payment to Miss Parker of £2,531.68."

82. The Ombudsman endorsed the recommendation, with the result that Mr Elsdon was required to pay Miss Parker £2,531.68 by 1 March 2013. In the event, Mr Elsdon's cheque did not reach the Ombudsman until 12 March.

Ms Ellis

83. It appears from a report prepared on behalf of the Ombudsman that:

i) A Ms Jeanette Ellis instructed Mr Elsdon in June 2011 on a conveyancing matter;

ii) At that stage, the costs were estimated at £498 plus VAT. In the event, Ms Ellis was billed £4,193.45. Nearly £1,000 of that figure was, however, attributable to aborted transactions;

iii) The report's author considered that there was "evidence to show the firm effectively suggested they would increase their charge to Ms Ellis for presenting her complaint" by "making certain reductions for goodwill and then threatening to reinstate these as there was no longer any goodwill – i.e. when a complaint was made".

84. The report concluded:

"I intend to recommend to the Ombudsman that because of the firm's inadequate cost information; for indicating they would reinstate deductions made for goodwill and for not sending the deposit on to then managing agent promptly, the firm should compensate Ms Ellis in the amount of £2178.73."

85. The Ombudsman endorsed the recommendation.

Mr Istae

86. On 19 January 2012, the Ombudsman directed Mr Elsdon to reduce the fees he had charged to a Mr Kieron Istae to £4,000 plus VAT. The Ombudsman explained:

"I consider that it would be unreasonable for the firm to raise a bill that was so far in excess of their original estimate without any further information having been provided in the interim, I do not however [dispute] that the firm had done a considerable amount of work for which they are entitled to be paid. Having taken all this into account, I consider that my preliminary decision to reduce the fees to £4000 plus vat remains fair and reasonable."

87. Mr Elsdon challenged this decision by way of an application for judicial review, but without success.

Dealings with the Law Society

88. By September 2014, the SRA had served on Mr Elsdon and Sai-Donne four notices calling for the production of documentation. On 23 September, the Law Society applied for a Court order against Mr Elsdon and Sai-Donne, and the matter came before Henderson J on 2 October 2014. In the course of his judgment, Henderson J said this:

"Compliance from the SRA's point of view was very slight in respect of those notices, and I have been taken through correspondence from Mr. Elsdon which makes it clear, to my mind, that he was adopting an unrealistically relaxed stance in relation to the concerns quite reasonably raised by his regulatory authority. In particular, he said on a number of occasions, and maintained the stance until yesterday, that, for a practitioner in the situation in which he found himself, it would be reasonable for him to deal with the outstanding matters on the footing that he would put in one hour's work per day, if possible, until the necessary information had been provided. As of yesterday, he was saying that some 64 hours were required for that purpose, which would mean compliance would not take place until some time early in the New Year, even assuming that he put in one hour on every working day from now onwards.

In my judgment this was an unrealistically unhelpful stance for a solicitor to adopt, particularly in the light of his professional obligations, which were, under the SRA principles, to comply with his regulatory obligations and to deal with his regulators 'in an open, timely and cooperative manner', while under the Code of Conduct of Solicitors itself, in paragraph 10.7, he was obliged to achieve an outcome of complying 'promptly with any written notice from the SRA'."

Comment

89. Taken together, the matters referred to in paragraphs 63-88 above are of considerable concern. In the first place, there is evidence of over-charging on the Glass, Thompson, Parker, Ellis and Istae cases. On Ms Corbin's calculations, the over-charging in relation to Mr Thompson's application to the Court of Protection and (perhaps especially) Mrs Glass's estate was very large. As regards Miss Read's estate, Mr Elsdon tried to insist on Sai-Donne's services being used and, when he was unsuccessful in that, raised an invoice that appears to have been unwarranted. In the case of the Thompson, Read, Marchant, Parker and Ellis matters, Mr Elsdon seems, on the face of it, to have taken inappropriate steps to deter challenges to fees being made or pursued. With Thompson, Mr Elsdon not only asserted a lien and referred to potential cost consequences, but relied on a claim against Mr Thompson's father which, had there been any question of his making it, should have led him to decline to act for Mr Thompson at all. With Marchant, Mr Elsdon threatened to re-invoice at a higher figure, removing "goodwill", and he apparently adopted a similar tactic with Miss Parker and Ms Ellis. In several instances, Mr Elsdon asserted a lien, including where he never appears to have been retained (Read) and where there was no question of his fees amounting to as much as the money he was withholding (Marchant). The Lilley, Ellis and Istae matters provide, moreover, evidence of lack of cooperation with the SRA/Ombudsman. Finally, it is hard to see that either Mr Elsdon's inquiry of the DVLA about Mr Culley (see paragraph 64 above) or his gratuitously hostile approach to Cats Protection (see paragraphs 70-71 above) can have represented appropriate behaviour by a solicitor in Mr Elsdon's position.
90. I agree with the Law Society that, in all the circumstances, there is good reason to think that the matters referred to in paragraphs 63-88 above involved breaches of the Principles identified in the Code as well as Outcomes 1.1, 1.2, 1.6, 1.11-1.14 and 11.1.

The Elsdons/Sai-Donne

91. Mr Barnett put forward, on instructions, an argument that Mr Elsdon and his wife should not be involved in these proceedings. I do not think, however, that there is anything in this point. Mrs Elsdon is a party to the proceedings as a director of Sai-Donne. Mr Elsdon himself is a party not merely for that reason, but because the SRA decided to intervene in his practice. That intervention is based both on conduct pre-dating Sai-Donne's involvement (i.e. when Mr Elsdon was practising under his own name) and on Mr Elsdon's behaviour as a manager of Sai-Donne. It is noteworthy in this context that "practice" is widely defined in the SRA Handbook Glossary to include "the activities, in that capacity, of … a solicitor".

Conclusions

92. As can be seen from the decision of the Court of Appeal in Sheikh v Law Society, an intervention by the SRA can potentially be challenged on the basis that the grounds relied on at the time were not made out by the information then available. I am not sure that Mr Barnett advanced an argument to that effect in the present case, but in any event it seems to me that the original decision to intervene cannot be impugned. The matters referred to in the Decision of the Adjudication Panel had an evidential foundation and were were capable of justifying intervention.
93. The real question is, I think, whether the intervention should be withdrawn now. In that context, I must, as Mr Barnett stressed, carry out a balancing exercise. I have (in the words of Chadwick LJ in Sheikh) to "weigh the risks of re-instating the solicitor in his … practice against the potentially catastrophic consequences to the solicitor (and the inconvenience, and perhaps real harm, to his or her existing clients) if the intervention continues".
94. As already indicated, Mr Barnett's position was that, even if the evidence could warrant disciplinary proceedings, it does not justify the continuation of the intervention. The complaints made against Mr Elsdon and Sai-Donne are not, Mr Barnett argued, so serious as to require a step as drastic as intervention.
95. I am afraid I take a different view. It seems to me that the risks attached to withdrawing the intervention outweigh those of continuing it. As I have said, the available evidence appears to me to provide clear and cogent evidence of dishonesty as well as indicating breaches of the Code and Accounts Rules. On the basis of the (admittedly less than comprehensive) material before me, I consider that Mr Elsdon and Sai-Donne cannot safely be trusted with the administration of estates or other work. That, moreover, is the position of the Law Society, to whose views I should have regard (see paragraph 13 above). I agree with Mr Dutton that there is reason to think that Mr Elsdon has lost his ethical compass.
96. In all the circumstances, I shall not direct the withdrawal of the intervention notices.