High Court of Justice in Northern Ireland Queen's Bench Division Decisions

CARC3282.A 26.10.2000

IN THE HIGH COURT OF JUSTICE IN NORTHERN IRELAND
QUEEN'S BENCH DIVISION _____
IN THE MATTER OF A SOLICITOR _____

CARSWELL LCJ

This matter comes before me by way of appeal under Article 17A(2) of the Solicitors (Northern Ireland) Order 1976 (the 1976 Order) from a decision of the Council of the Law Society of Northern Ireland (the Society) whereby the Council upheld the decision of the registrar of solicitors to issue to him a practising certificate subject to restrictions as to practice. The registrar had decided that the certificate issued to him for the year 2000-2001 should be subject to a restriction that the appellant should not practise on his own or in partnership. The appellant appealed to the Council, which affirmed the registrar's decision, and the appellant has appealed to me, seeking to have the restriction lifted and obtain the issue of a practising certificate without restriction.

The qualification to act as a solicitor is contained in Article 4 of the 1976 Order, which requires that he shall have been admitted as a solicitor, that his name is on the roll and that he has a practising certificate issued to him by the registrar, who is appointed by the Society under Article 7. A solicitor must apply annually for the issue of a certificate, pursuant to the terms of Article 10, as amended by the Solicitors (Amendment) (Northern Ireland) Order 1989 (the 1989 Order), and the registrar issues it in accordance with the provisions of Article 11. The registrar has a discretion to refuse to issue a certificate in a number of cases enumerated in Article 13 (as amended). When the registrar decides to refuse a certificate the solicitor may apply to the Council of the Society under Article 14, as substituted by the 1989 Order, to review his decision. The Council may also decide proprio motu under the added Article 14A to restrict a practising certificate. An appeal from the Council's decision lies under each Article to the Lord Chief Justice. Following the imposition of such a restriction, where a subsequent certificate is issued to a solicitor with the same limitation, the solicitor may apply under the added Article 17A to the Council for the removal of the restriction. An appeal from the Council's decision lies under Article 17A(2) to the Lord Chief Justice, who may affirm the decision or give to the registrar any direction which could have been given to him by the Council under Article 17A(1), that is to say, he may order the removal or amendment of the restriction. Mr Morgan QC for the appellant contrasted the powers under these provisions with those contained in the substituted Articles 44 to 46, which deal with the Solicitors Disciplinary Tribunal. The members of the Tribunal are appointed by the Lord Chief Justice and include independent lay persons as well as practitioners. The Tribunal hears applications brought to it by solicitors and complaints brought by the Society or other persons concerning the conduct of solicitors. It inquires into complaints and may make any of the orders specified in the substituted Article 51.

The appellant was entered on the roll of solicitors in 1981. He commenced practice on his own account in Belfast in 1985. He appears to have encountered difficulties from about 1989, and in November 1990 he was admonished and fined for delay in payment in fees. In September 1991 he sold his Belfast practice to A and worked part-time elsewhere. A dispute arose over the payment of the purchase price for his practice, and in December 1992 he commenced proceedings against A to recover the monies due.

In September 1993 he was adjudicated bankrupt on foot of a statutory demand made by HM Customs and Excise over unpaid VAT. I was informed by counsel that the ground of this demand was not that he had received VAT and failed to pay it over to Customs and Excise. He was not liable for VAT and had not charged it to his clients, but as the result of his failing to register at the proper time Customs and Excise imposed a VAT charge on all his fees, together with fines and penalties, which he was unable to pay. He subsequently cleared the matter up, and the bankruptcy was annulled in early 1994. He attributed the contretemps to the negligence of the solicitor then acting for him, and commenced proceedings against him for damages.

The immediate consequence of the appellant's bankruptcy was that his practising certificate was suspended by the operation of Article 15(1) of the 1976 Order. Shortly after this he came before a Disciplinary Tribunal constituted under the 1976 Order on a number of charges alleging professional misconduct and breaches of the regulations governing solicitors' practice, brought by a complaint made by the Society in February 1993. The Tribunal held an inquiry on 21 September 1993 and at its conclusion made a number of findings:

"(a) The Respondent was guilty of undue delay in the conduct of his clients' business in all 13 cases.

(b) He misled Building Societies in relation to the progress of their business.

(c) He misappropriated money belonging to his clients.

(d) He sought and obtained one payment from clients for outlay not expended by him.

(e) He worked for a fee at a rate which could reasonably be regarded as being intended or substantially intended for the purpose of attracting clients to his practice, rather than for the purpose of making a reasonable profit.

(f) He did not at all times carry out his work and conduct his practice to the highest professional standards nor did he observe the Conveyancing guidelines promulgated to the profession by the Society.

(g) He received clients' money and did not pay it into a client bank account.

(h) He transferred money from his clients' account to his office account for fees without first rendering a bill of costs.

(i) He did not keep properly written up accounts to show all dealings with clients' money.

(j) He did not lodge clients' money in an interest bearing account or pay a sum of money equivalent to the interest which would have been so earned, to the client."

The Tribunal ordered that the appellant be admonished and fined £1000.00 and that he pay the sum of £2400.00 towards the costs of the Society and £1250.00 towards the costs of the Tribunal. The members of the Tribunal were aware that the appellant had been adjudicated bankrupt, with the consequence that his practising certificate had been suspended. Counsel for the appellant placed some emphasis on the content of paragraph 77 of the Tribunal's report:

"77. The Chairman said that the Tribunal had sympathy for the Respondent in the circumstances outlined in his replying Affidavit and accordingly had decided to take a lenient course as a measure of their sympathy. However, they warned the Respondent that no leniency could be shown if he should come before the Tribunal again and the allegations against him were substantiated. The Chairman advised the Respondent to consider whether he should continue to practise on his own account as a sole practitioner."

It was submitted on behalf of the appellant that in referring to the possibility of his coming before them again the Tribunal contemplated that he would be free in due course to return to practise. As Lord Hutton inferred in his judgment given in 1996, I think it probable that they did not feel it necessary to impose any suspension or restriction on practice because they knew the effect of the bankruptcy. It seems to me that that is confirmed by the fact that the chairman recommended that the appellant consider the possibility of restricted practice.

The appellant's practising certificate expired on 5 January 1994. On 4 August 1994 he applied for the issue of a certificate, but his application was refused by the registrar. He appealed to the Council, which at its meeting on 28 September 1994 refused to issue a certificate. On 26 October 1994 he appealed to the Lord Chief Justice, but subsequently indicated that he did not wish to pursue the appeal, and on 21 December the Lord Chief Justice dismissed the appeal without formal adjudication.

In June 1995 the appellant's proceedings against A were concluded by payment to the appellant of what he describes as a "substantial sum". On 13 June 1996 he again applied to the registrar for the issue of a certificate, but the registrar on 10 July refused the application. The appellant applied to the Council under Article 17A of the 1976 Order, and the council sat to hear the application on 31 July 1996. It had substantial documentation before it and heard evidence from the appellant and submissions from his counsel. It decided, pursuant to the power conferred by Article 14A of the 1976 Order, that the appellant should be issued with a restricted certificate valid for the rest of the practice year, viz to 5 January 1997, and that subsequent certificates should have the same restriction, that he should not practise on his own account, either as a sole practitioner or as a partner. The appellant appealed to the Lord Chief Justice, who gave a written judgment on 4 October 1996 dismissing the appeal.

The appellant received a practising certificate in November 1997, restricted in this fashion, and then received similar certificates for the years 1998-9 and 1999-2000. From October 1997 he was employed as an assistant solicitor by B who died in March 1999. He remained in the practice as an assistant solicitor while the practice was managed by Messrs C.

The sums due from the appellant consequent on the hearing before the Disciplinary Tribunal were apparently discharged, but he then owed to the Society the sum of £3715.87 in respect of costs due in respect of the appeal to the Lord Chief Justice in 1996. On 5 December 1997 he signed a written undertaking to pay the sum of £50.00 per month, commencing on 31 January 1998. The undertaking went on:

"Any outstanding balance will be paid from the proceeds of my negligence action against [D] solicitors on the conclusion of same."

By that action, commenced in 1995, the appellant claimed damages from D for negligence in advising him and handling his affairs at the time when he was made bankrupt. The action was eventually settled in February 2000, but I was informed that payment of the sums agreed was not made until about June 2000. The appellant did not keep up the payments promised in the undertaking, and by June 1999 had paid only four instalments of £50.00 each, the last in October 1998. When asked about this at the Council meeting on 9 June 1999, the appellant stated that this latter issue had been discussed with his late principal B with whom he had hoped to enter into partnership in January 2000. He said that –

"They had decided not to pay the sums due in accordance with the undertaking but to settle the sums due when forming the new partnership."

He paid a further sum of £500.00 on 6 March 2000, and the balance due was eventually paid after receipt of the sum paid by D by way of damages.

When the registrar again issued a restricted certificate in 1999, the appellant on 8 April 1999 applied to the Council under Article 17A for removal of the restriction. The council heard his application on 9 June 1999, but again declined to accede to it. The appellant issued a petition of appeal to the Lord Chief Justice, but did not pursue it.

When the registrar issued a certificate for the year 2000-01 subject to the same restrictions, the appellant applied to the Council for their removal. The Council heard the matter on 29 March 2000, at which the appellant was represented by Mr Morgan QC and produced documents and gave evidence. It decided not to accede to the application. The reasons for the Council's decision and the matters which it took into account are set out in paragraphs 6 and 7 of the affidavit sworn on 23 May 2000 on behalf of the Society by the President Mr John Meehan:

"6. The Council, in coming to its decision, took into account all relevant factual matters contained in the documentation before it and to the detailed submissions made by Mr. Morgan, as well as the answers given by Mr. Morgan or the appellant in person to questions put at the meeting. The Council was not seeking to, and did not, exercise any disciplinary function in coming to its decision in respect of the Appellant's application. The Council was mindful of the failure of the Appellant to abide by his undertaking and was conscious of the fact that no explanation for this failure was provided in the letter of 27^th March. Both the letter and the undertaking were shown to Mr. Morgan. The Council was not influenced by the simple fact that moneys were still owing to the Society – but it was influenced by the fact that the Appellant seemed not to understand and had continued to fail to appreciate the significance of a solicitor's undertaking and that he had chosen not to honour it.

7. In addition, the Council was careful to take into consideration the public interest including the interests of the present and potential future clients of the Appellant, the interests of the profession and the interests of the Appellant himself. These matters were addressed, at the invitation of the Council, by Mr. Morgan. Furthermore, it seemed to the Council that the Appellant's failure to put in hand any enquiries about any financial arrangements for the potential funding of a practice or to have any apparent financial planning was relevant to the decision."

The appellant appealed against this decision by petition dated 3 April 2000, which came on for hearing on 13 October 2000.

Mr Morgan submitted at the outset that I should approach the matter afresh, without giving weight to the views of the Council. In support of this proposition he cited decisions of the European Court of Human Rights, contending that their effect was that the Council could not, because of its conflict of roles, be a sufficiently independent and impartial tribunal so as to satisfy the requirement of Article 6(1) of the Convention. I do not propose to examine this submission at length. In the light of the decisions in Le Compte v Belgium (1981) 4 EHRR 1 and Van Marle v Netherlands (1986) 8 EHRR 483 I should be willing for present purposes to assume that there is a dispute or "contestation" which is justiciable. Mr Morgan went on to submit that the Council in effect is injured party, prosecutor and jury in relation to a decision to impose or continue restrictions in a practising certificate, and therefore that conflict of role gives rise to a structural partiality which deprives the Council of the necessary independence and impartiality. I do not find it necessary to come to a concluded decision on this point, for if the submission is correct, the defect is cured by the unrestricted right of appeal to the Lord Chief Justice. I take the view that I should approach such an appeal in a similar fashion to appeals under Articles 5 and 6 of the 1976 Order against the Council's decisions in relation to entry to the profession. In Re CH [2000] NI 62 at 64 I said of these appeals:

"I am of opinion that I should approach the appeal as a rehearing, with similar freedom to review the findings of fact and draw inferences from them. At the same time, I think that I should give substantial weight to the considered conclusions of the Law Society ..."

I propose to adopt this approach, retaining the freedom to reach my own conclusions and not starting with any presumption that the Society's views are correct, but recognising as a matter of common sense that they are founded on the collective experience of practitioners and constitute evidence to which I may have regard in determining the issue for myself. If the matter is approached in this way, the requisite independence and impartiality of the decision-making is preserved.

Mr Morgan also submitted that the criteria which are applied to the decision whether to impose restrictions on practice are insufficiently defined and that their lack of precision makes the procedure arbitrary to such a degree that it is in breach of the requirement of fairness contained in Article 6(1) of the Convention. He cited in support the decision of the European Court of Human Rights in H v Belgium (1987) 10 EHRR 339. Under Belgian law a disbarred avocat could seek readmission after ten years if exceptional circumstances warranted it. The Court, in holding that there had been a breach of Article 6(1), referred in paragraph 53 of its judgment to the lack of precision of the criterion for readmission, described as "exceptional circumstances", and the lack of explanation for the decision why the applicant's circumstances were not to be regarded as exceptional.

I do not consider that the present case is at all comparable. The grounds on which the Council should act in deciding on a restriction were set out in Lord Hutton's judgment in 1996, and it is to be noted that from the affidavit of the then President of the Society Mr Palmer, sworn to support the Society's case and before Lord Hutton spelt out those grounds, it appears clearly that the Council had a proper appreciation of the correct approach.

The genesis of the approach reflected in Mr Palmer's affidavit appears in Re D, a solicitor (1961) 95 ILTR 60 at 64, where Davitt P refers to the necessity to have due regard to "the interests of the public, the interests of the profession, the interests of the clients of the solicitor in question, and the interests of the solicitor himself." It was articulated clearly in the decision of Kingsmill Moore J in Re Crowley [1964] IR 106, in which he said at page 129:

"But there may be occasions where, in the interest of the public, a solicitor should be restrained from practice because of some continuing state of affairs which render his practising undesirable. Such restraint is not a matter of discipline for past offence but of precaution lest future practice by the solicitor should prove dangerous to the public or the profession in the future. The fact that a solicitor has misbehaved himself in the past may indeed be an element in arriving at the conclusion that he is likely to misbehave himself in the future and so (subject to the provisions of s. 49) may form grounds for withholding a practising certificate, or issuing it subject to conditions; but in such a case the certificate is not to be withheld, or conditions imposed as a discipline for past misdoing. Such action is only justified as a necessary precaution against the likelihood of future misdoing reasonably to be inferred from past conduct."

The same approach appears in the decision of the Master of the Rolls referred to by Lord Hutton at pages 8-9 of his judgment, where he upheld the imposition by the Law Society of a condition restricting practice, notwithstanding the fact that the Disciplinary Tribunal had decided not to deprive the solicitor of his ability to practise. This decision underlines the importance of considering the protection of the public and existing and potential clients when it falls to the Council to determine whether a restriction on practice should be imposed. The function being exercised is not one of discipline, but rather one, as Lord Hutton said, of –

"protecting the public and the good name and reputation of the profession, although there is, of course, some overlapping in carrying out the two functions."

If the Council follows this approach, as in my judgment it did in the present case, then its decisions will not be made arbitrarily but on a principled basis, which will be in accord with the requirements of Article 6(1) of the Convention.

The main proposition advanced on behalf of the appellant was that restriction of his practising certificate should have been dealt with as a disciplinary matter and not under the powers conferred on the registrar and the Council by which they may impose conditions on the issue of a certificate. It was submitted that if the Society had proceeded by way of complaint to the Disciplinary Tribunal, that body would have been able to investigate the matters in issue, probing and weighing the evidence where necessary. Its conclusion and disposition would then have informed the Council in its approach and set an appropriate level or standard which it would have been appropriate for the registrar and the Council to follow in the exercise of its restricting power. Mr Morgan also argued, by reference to reports of decisions of the Disciplinary Tribunal in recent years, that it would have been unlikely to restrict the appellant's certificate for an act such as a breach of undertaking.

This argument fails in my opinion to give adequate recognition to the distinction between the disciplinary function exercised by the Disciplinary Tribunal and the function of protection of the public and the good name of the profession exercised by the Council of the Society in the issue of practising certificates. Lord Hutton pointed clearly to this distinction at pages 7 to 8 of his 1996 judgment, as did Kingsmill Moore J in the passage immediately preceding that which I have quoted from his judgment in Re Crowley [1964] IR 106. The distinction is underlined by the decision of the Master of the Rolls quoted by Lord Hutton. The affidavits sworn by successive Presidents of the Society, and in particular that of Mr Meehan in the present proceedings, show that the Council had the second function clearly in mind in deciding not to remove the restriction. It did not consider it necessary to seek a disciplinary sanction against him for his default, but rather decided to take steps which would protect the public and the reputation of the profession. It would in my view have been wrong of the Society to have instituted disciplinary proceedings against the appellant in these circumstances, merely because the Disciplinary Tribunal possesses the same power to restrict a solicitor's practising certificate.

I have given careful consideration to all the facts and arguments put before me. I have left out of account in deciding the issue the matters deposed to by Mr C in his affidavit of 23 June 2000. They are disputed by the appellant and the factual dispute cannot readily be resolved without further investigation. If established, these matters amount to allegations of professional misconduct, and as such would be relevant more to disciplinary proceedings than to restriction of a practising certificate.

In my opinion the Council was justified in continuing to impose the restriction on the appellant's practising certificate. I accept from the evidence of those persons whose affidavits were filed on behalf of the appellant that he is an industrious practitioner who is able to deal with the work of a solicitor in the type of practice with which he has been concerned. The restriction is therefore not required because of inexperience or incompetence, commonly a ground on which the Council finds it necessary to impose a restriction for the protection of the public who come to a solicitor as clients. The Council based its decision on two grounds, the appellant's lack of appreciation of the professional duty of a solicitor to honour his obligations and his failure to put in place proper financial arrangements for starting up a practice. The latter reason seems to me to carry less weight than the former, though it does constitute some evidence that the appellant's business efficiency may be somewhat below standard, especially when one looks back at the findings of the Disciplinary Tribunal in 1993. I consider, however, that the important reason was that related to the failure to observe his undertaking to the Society. It is essential for the proper conduct of the profession that its members may be relied to be trustworthy in all their dealings, and in particular to observe faithfully the terms of any undertakings which they may give. Undertakings, whether given to the court, to other practitioners or to members of the public, are solemn guarantees that the matter promised will be performed, and the practitioners who give them – which they should not do if they cannot be sure that they can be met – must as a matter of professional obligation honour them. The history of this matter shows that the appellant has an imperfect understanding of this obligation and a casual attitude to it which are wholly unsatisfactory for a solicitor who is dealing with other practitioners and the public. I consider that the Council was correct in maintaining the restriction on his practising certificate for the current year. It will be for the Council to keep the matter under review at the time of issue of future certificates and apply the principles which I have discussed in this judgment in determining the appellant's fitness to practise on his own or in partnership without restriction.

The appeal is accordingly dismissed.

IN THE HIGH COURT OF JUSTICE IN NORTHERN IRELAND
QUEEN'S BENCH DIVISION _____
IN THE MATTER OF A SOLICITOR _____
JUDGMENT
OF
CARSWELL LCJ
_____