Solicitor – Disciplinary proceedings – Appeal – Disciplinary Tribunal upholding appellant authority’s allegations against respondent solicitors in relation to conveyancing services but acquitting respondents of taking unfair advantage – Tribunal imposing penalties and making costs orders against respondents – Whether tribunal erring in failing to find respondents taking unfair advantage – Whether tribunal erring in imposing penalty – Whether tribunal making wrong costs orders – Whether tribunal erring in refusing to hear appellant’s closing submission – Appeal allowed in part – Cross-appeal allowed
The respondent solicitors faced allegations by the appellant regulation authority of, among other things, breaches of rule 10 of the Solicitors Code of Conduct 2007 by taking unfair advantage of clients by imposing conveyancing charges which were very significantly higher than the initial price quoted. The Solicitors Disciplinary Tribunal found some of the allegations proved, but acquitted the respondents of breach of rule 10 of the code. It then imposed a penalty of £1,000 on the second to sixth respondents jointly and severally, and ordered the respondents to pay £80,000 towards the appellant’s costs.
The appellant appealed, challenging the level of fines imposed on the second to sixth respondents and the absence of any fine on the first respondent. It contended that the tribunal should have found that, where an allegation included a reference to rule 10, there had been a breach of that rule, consistent with the tribunal’s findings. Since the tribunal had found that the respondents had given a headline quote to clients which would encourage them to use their services, which would not be accurate as to the likely costs to be incurred and which was then followed by an inadequate and misleading system of documents which led to clients being charged far more than the quoted figure, the respondents could not have been acting fairly. For there to be a breach of rule 10, there was no requirement that a solicitor should act with an intention to cheat or act dishonestly or with a lack of integrity and the tribunal must have been misled by its conclusions that the respondents had not acted in those ways.
Further, to impose a fine of £1,000 on the second to sixth respondents and no penalty on the first respondent firm had been clearly inappropriate. The tribunal had to keep in mind the twin principal objectives in relation to sanction, namely, the need to deter and the need to protect the public reputation of the profession. An assessment of the conduct in question with its aggravating features should have led to a much more significant financial penalty for all the respondents. Finally, the tribunal had erred in refusing to hear a closing submission on behalf of the appellant. The respondents cross-appealed claiming that the costs decision was not supported by sufficiently clear reasoning.
Held: The appeal was allowed in part. The cross-appeal was allowed.
(1) The wording of rule 10, prohibiting the use of a solicitor’s position to take advantage of another, had to involve an element of consciously taking unfair advantage to give a natural meaning to the words used. It was not sufficient for the solicitor to have taken deliberate action which, in fact, had the consequence of taking unfair advantage of the client. On the proper construction of rule 10, the tribunal had been entitled to find that there had been no breach of the rule that required a subjective element. Moreover, the tribunal’s findings had supported its conclusions. Although it had found that the respondents intended to put themselves in a position to be able to give a low headline quotation, it had not found any lack of integrity, nor that the scheme had been embarked upon to cheat clients. The overall picture had to be viewed in the light of an acceptance that the respondents believed that their scheme was transparent so that they had not set out to cheat anyone.
(2) The penalties imposed on the second to sixth respondents were clearly inappropriate in that they were far too low in all the circumstances of the case. Bearing in mind the expert nature of the tribunal and that, absent any error of law, the High Court had to pay considerable respect to the sentencing decisions of the tribunal, it was clear that the penalties fell far below any appropriate range available to the tribunal. The primary purpose of the sanction was to deter others and to uphold the reputation of the profession. The facts of the case showed long-term and significant breaches of important rules which had the effect of causing loss to many clients, and which represented a course of conduct which could only compromise the reputation of the profession for fair dealing. The culpability of the respondents lay in the creation and continuation of a scheme of documents which was designed to attract work by reason of the low headline quote, which was opaque and misleading by its nature, and which had the effect of operating unfairly on the clients.
(3) The lack of reasoning in relation to the sanction imposed was in contrast to the very careful analysis of the evidence on the issue of liability. The absence of clear reasoning meant that there was no firm platform for the court to consider in assessing whether the penalty had clearly been inappropriate. Having assessed the gravity of the offending alongside such mitigation as was available, the appropriate financial penalty for the third respondent was £15,000, making no separate order against the first respondent. A penalty of £1,000 for the second, and fourth to sixth respondents had been wholly inadequate and the penalty in each case should have been £5,000. Those figures were assessed as headline figures, representing the appropriate level of fines, but without an ability to consider the means of those respondents. The ultimate assessment of the financial penalty would be remitted to the tribunal once the means, assets and other relevant considerations pertaining to those respondents had been fully and properly set out with an opportunity to the appellant to conside.
(4) The award of costs could not be sustained given the sparsity of reasoning. Since the matter of penalty was to be remitted to the tribunal for further consideration, it was logical for the question of costs to be remitted for further consideration at the same time. The tribunal could have been left in no doubt about the way in which the appellant had put its case. It was to be inferred that the tribunal had not heard the appellant because it had not needed to do so.
Timothy Dutton QC (instructed by Penningtons Manches LLP) appeared for the appellant; Gregory Treverton-Jones QC (instructed by Anderson Solicitors) appeared for the respondents.
Eileen O’Grady, barrister
