Hayes v The Law Society

On an appeal from a professional disciplinary tribunal’s costs decision, the appellate court may substitute its own decision while giving appropriate respect to the tribunal’s judgment. A tribunal may make a costs order against a successful respondent where the respondent’s conduct has been criticised, but it must consider the impact of that conduct on the costs incurred. There must be a reasonable and just balance between the criticism and the order, together with a causal connection between the default and the costs. A respondent should not be deprived of costs where the criticised conduct did not cause the proceedings or materially increase their cost.

The Solicitors’ Disciplinary Tribunal dismissed two allegations against the appellant, concerning allegedly unjustified charges and misleading information in bills. It made adverse observations about the clarity and transparency of the billing of a shared lunch expense, but found no intention to mislead and made no finding of unbefitting conduct. The tribunal nevertheless made no order as to costs.

The appellant appealed under section 49 of the Solicitors Act 1974. The central issues were the proper appellate approach to a disciplinary tribunal’s costs discretion and whether the tribunal had been entitled to deprive a successful respondent of costs.

1. Appeal allowed. The appellate jurisdiction was appellate rather than merely supervisory. The court could substitute its own decision, while giving an appropriate measure of respect to the tribunal’s judgment. It should not defer more than the circumstances warranted, following the approach discussed in Langford v Law Society [2002] EWCA 2802 Admin.

2. Under section 47(2)(i) of the Solicitors Act 1984 and Rule 22 of the Solicitors (Disciplinary Proceedings) Rules 1994, the tribunal had power to reflect criticism of a successful respondent in its costs order, even though no allegation of unbefitting conduct had been proved. That discretion was not, however, unlimited.

3. Before making such an order, the tribunal had to consider the impact of the criticised conduct on the costs incurred. The order had to strike a reasonable and just balance between the default and the costs consequences. There also had to be a causal connection between the default and the incurring of costs. This was the specific approach to disciplinary costs appeals identified in Rowe v Lindsey (unreported, 28 June 2001).

4. The appellant’s billing deficiencies did not cause the disciplinary proceedings or the substantial costs of defending the serious dishonesty allegations. The tribunal’s findings established that the principal allegations were unsupported and that the billing error was not deliberate or sinister. The appellant would have faced the proceedings regardless of the quality of his billing. It was therefore plainly wrong to deprive him of all his costs.

5. The tribunal’s order was set aside. The appellant was awarded his costs of and incidental to the tribunal hearing from the respondents, together with his appeal costs assessed at £12,985.76.

• Solicitors’ Disciplinary Tribunal: dismissed the allegations against the solicitor, but made no order as to costs.
• High Court (Administrative Court): appeal allowed; the costs order was substituted so that the appellant received his costs of and incidental to the tribunal hearing. Appeal costs were assessed at £12,985.76.