Act: Brown; Digby Brown

Alt: R. Dunlop, Q.C.; Balfour + Manson LLP

18 March 2011

Introduction

[1] On 29 March 2010 the Scottish Solicitors Discipline Tribunal found the petitioner guilty of professional misconduct and made an order censuring him and finding him liable for the expenses of the proceedings before it. The petitioner has appealed against that decision under section 54 of the Solicitors (Scotland) Act 1980.

The relevant circumstances

[2] The relevant circumstances are not in dispute. In about October 2006 the petitioner was instructed by Ms Christine Waller to act on her behalf following the breakdown of her relationship with Mr Barry Phillips. Ms Waller and Mr Phillips had been living together in a house in Bonnybridge of which they were the joint proprietors. The petitioner instituted proceedings against Mr Phillips at Ms Waller's instance, in Falkirk Sheriff Court. A variety of orders were sought against Mr Phillips. They included interdict and interim interdict against molestation, with a power of arrest; an exclusion order suspending Mr Phillips's occupancy rights in the property; a warrant for his summary ejection; interdict and interim interdict against his entering the property without Ms Waller's express permission, with a power of arrest; interdict and interim interdict against his removing any furniture or plenishings from the property except with Ms Waller's written consent; an order for the sale of the property and the division of the proceeds; and an award of expenses. The writ made serious allegations against Mr Phillips: he was described as "callous, vindictive, aggressive and violent", and was said to have repeatedly assaulted Ms Waller and vandalised her car. On 10 October 2006, following a hearing at which the petitioner represented Ms Waller, the sheriff granted the interim orders sought, with a power of arrest, and the exclusion order sought. On 17 October 2006 Morgans, the solicitors acting on behalf of Mr Phillips, wrote to the petitioner stating that their client was agreeable to the house being sold and the proceeds divided. They made proposals in that regard, and stated that, if the proposed terms were acceptable, they did not intend to defend the proceedings, on the understanding that no other order was necessary.

[3] In December 2006 or January 2007 there was a reconciliation between Ms Waller and Mr Phillips. By June 2007, however, their relationship had again broken down, and they agreed to instruct estate agents to market the property. On 13 June 2007 an offer was received which they wished to accept. Morgans then offered to act on behalf of both parties in respect of the conveyancing, but Ms Waller was unwilling to instruct them. The petitioner was reluctant to act, and suggested two other firms of solicitors, both of whom declined to act. By letter dated 27 June 2007 Morgans invited the petitioner to carry out the conveyancing, indicating that there was no objection on behalf of their client, subject to agreement with regard to the proceeds of sale.

[4] On 10 July 2007 the petitioner was re-instructed by Ms Waller in relation to the court proceedings, which appear to have been dormant since October 2006. She wished to obtain permanent interdicts against Mr Phillips and to recover the expenses of the action. The petitioner submitted a minute for decree on the same date. As the action was undefended, the application was not intimated to Mr Phillips or his solicitors.

[5] On 12 July 2007 the petitioner wrote to Morgans confirming that he would proceed with the conveyancing. In relation to the proceeds of sale, he stated that, after deduction of the outstanding loan, an agreed retention in respect of a claim made by Mr Phillips, the petitioner's fees and outlays and any other expenses there might be, these would be divided equally, with one half being paid to Mr Phillips. On 24 July 2007 the petitioner issued a terms of engagement letter to Mr Phillips.

[6] On 25 July 2007 the petitioner represented Ms Waller at a hearing in respect of the minute for decree, at which he successfully sought a permanent interdict against Mr Phillips from molesting Ms Waller, entering the property without her express permission or removing any furniture or plenishings from the property without her written consent, with powers of arrest. Mr Phillips was also found liable in expenses as taxed.

[7] The petitioner then prepared an account of his expenses in respect of the action. On 9 August 2007 he sent it to Morgans, stating that he looked forward to their client's proposals, failing which he would lodge the account for taxation. The account included items in respect of the taxation of the account which had not yet been incurred and might be avoided if agreement were reached. The petitioner did not receive a reply to that letter.

[8] On 4 September 2007 the petitioner sent to Morgans a cheque in respect of Mr Phillips's share of the proceeds of sale, with an accompanying account. He had deducted from Mr Phillips's share the judicial expenses due to Ms Waller, as brought out by the account which he had sent on 9 August. That account had not been agreed or taxed, and, as we have explained, included items which had not been incurred.

The proceedings before the tribunal

[9] Following the making of a complaint by Mr Phillips, the respondents submitted to the tribunal a complaint of professional misconduct by the petitioner. It was alleged that the petitioner was guilty of professional misconduct in that he acted for Mr Phillips when he was acting for Ms Waller in circumstances where Ms Waller was seeking decree for an interdict against Mr Phillips and was seeking to obtain and recover judicial expenses from Mr Phillips. It was further alleged that, in acting for joint proprietors who were estranged, it was in any event the petitioner's duty to have in place a written minute of agreement between the parties regulating the distribution of the proceeds of sale.

[10] The tribunal found the first of these charges established but rejected the second charge. It found the petitioner:

"guilty of Professional Misconduct in respect of his acting where there was s conflict of interest in that he acted for a client in a conveyancing transaction when he was acting for the client's former cohabitee and co-proprietor in circumstances where the former cohabitee and co-proprietor was seeking Decree for an Interdict against the client and was seeking to obtain and recover judicial expenses from the said client."

In the reasons it gave for its decision, the tribunal stated that Ms Waller and Mr Phillips had been in an adversarial position on 10 July 2007 and on 25 July 2007, when the petitioner had appeared personally in court on Ms Waller's behalf. Although the tribunal understood the urgency to accept the offer for the property, it considered that the petitioner had a duty to communicate with Mr Phillips in connection with the interdict action and the issue of expenses. He had made no mention of the expenses of the interdict action to Mr Phillips, or in his letter to Morgans of 12 July 2007, but had nevertheless deducted those expenses from the proceeds of sale. He had acted where there was a conflict of interest. This was contrary to the Code of Conduct for Scottish Solicitors 2002 and was conduct which could bring the profession into disrepute.

[11] In relation to the imposition of a penalty, the tribunal was informed that there had been two previous findings of misconduct against the petitioner. They were however not analogous, and one was some considerable time ago. The tribunal took note of the fact that the petitioner had had to pay compensation of £1,800 to Mr Phillips, and had refunded the fees charged. The tribunal also accepted that there had been no ulterior motive behind the petitioner's acting as he had done. In those circumstances it considered that it was proportionate to censure the petitioner.

The appeal

[12] As presented, the appeal focused upon two issues. First, it was submitted that the tribunal had erred in finding that the petitioner had acted where there was a conflict of interest. The petitioner's performance of his duties on behalf of Ms Waller in connection with the interdict action did not conflict in any way with his performance of his duties on behalf of Mr Phillips in connection with the conveyancing. Where the relationship between co-proprietors of a house broke down and each instructed his or her own solicitor, it was common in practice for one of those solicitors to act on behalf of both co-proprietors in connection with any necessary conveyancing, in the interests of economy. Secondly, and in any event, it was submitted that the tribunal had erred in holding that professional misconduct was established on the basis that the conduct in question could bring the profession into disrepute. Whether conduct should be treated as professional misconduct depended on whether it would be regarded as serious and reprehensible by competent and reputable solicitors: Sharp v Law Society of Scotland 1984 SC 129.

Discussion

[13] We have no doubt that the tribunal was entitled to find that the petitioner acted in a situation where a conflict of interest existed. As Ms Waller's solicitor in relation to the interdict action, the petitioner was under a duty of loyalty to her interests. As Mr Phillips's solicitor (as well as Ms Waller's) in relation to the conveyancing transaction, the petitioner owed a similar duty to Mr Phillips. Those duties were liable to become irreconcilable. To give one illustration, the petitioner was instructed to recover the expenses of the interdict action. It might in some circumstances be appropriate to use diligence in order to do so. The effective use of diligence would be materially assisted by knowledge of when, and where, funds were held for Mr Phillips's benefit: knowledge which the petitioner would have as Mr Phillips's solicitor in connection with the sale of the property. It might indeed be appropriate in Ms Waller's interest, in some circumstances, to arrest Mr Phillips's share of the proceeds of sale in the petitioner's client account. Although the petitioner had no ulterior motive, the situation was one which was capable of being abused by a less scrupulous solicitor, and would give rise to understandable concern on the part of the client. In the event, the scope for misunderstanding of where the petitioner's duty lay was demonstrated by his deduction, from Mr Phillips's share of the proceeds of sale, of the amount which the petitioner had calculated as being due to his other client in respect of the interdict action: an amount which had not been taxed or agreed, and was in fact overstated. We would also observe, although the point is not clearly brought out in the tribunal's reasoning, that the petitioner's failure to inform Mr Phillips of his continued actings in the interdict action, after having accepted him as a client in respect of the conveyancing matter, is difficult to reconcile with the trust and confidence which is essential to the relationship between solicitor and client.

[14] Whether the petitioner's conduct amounted to professional misconduct appears to us to be less clear-cut. In the case of Sharp, the court emphasised at pages 134 and 135 that whether a failure to comply with a relevant rule should be treated as professional misconduct must depend upon the gravity of the failure and a consideration of the whole circumstances in which the failure occurred, including the part played by the individual solicitor in question. Although the court's reference at page 135 to a departure from expected standards which "would be regarded by competent and reputable solicitors as serious and reprehensible" is not to be treated as if it were a statutory definition, it draws attention to the importance of the gravity of the misconduct and the degree of culpability of the solicitor in question, as they would be regarded by competent and reputable solicitors. It also makes clear that the assessment is based on standards held by the profession itself. It follows that, as Lord Clyde observed in Roylance v General Medical Council (No. 2) [2000] 1 AC 311 at pages 330-331, a professional disciplinary committee is well placed in the light of its own experience, whether lay or professional, to decide where precisely the line falls to be drawn in the circumstances of particular cases, and their skill and knowledge require to be respected.

[15] In the present case, the tribunal noted all the relevant circumstances in its decision. It expressly recognised that the petitioner had acted as he had done without any ulterior motive. Nevertheless, the tribunal concluded that the petitioner's conduct was of a kind which could bring the profession into disrepute, and, as such, constituted professional misconduct. We consider that that is a conclusion which the tribunal was entitled to reach. Conduct which is of sufficient gravity and culpability to be capable of bringing the profession into disrepute can in our view properly be characterised as professional misconduct. Paying due respect to the expertise of the tribunal, we are unable, in the circumstances of this case, to differ from their conclusion that the conduct in question was of that character.

Conclusion

[16] For the foregoing reasons we shall refuse the appeal.