Constantinides v The Law Society

A disciplinary tribunal may use a civil judgment to establish relevant background facts, but adverse judicial comments on dishonesty are not automatically evidence of dishonesty in separate disciplinary proceedings. The tribunal must make its own assessment and apply the applicable standard of proof.

Dishonesty requires conduct judged dishonest by the ordinary standards of honest people, together with knowledge that the conduct was dishonest by those standards. A disciplinary allegation should identify the dishonest conduct and may plead, in the alternative, a reckless or blinkered disregard of professional obligations. Dishonesty was established where a solicitor acted despite serious conflicts of interest and accepted instructions in an area in which he lacked competence.

The claimant, a solicitor, appealed against the Solicitors’ Disciplinary Tribunal’s decision of 1 March 2005 striking him from the Roll. The Tribunal had found that he acted dishonestly while involved in an investment scheme in which his client, another client and he himself had conflicting interests.

The claimant challenged the admission and use of a Chancery Division judgment which had found breaches of duty and dishonesty, the Tribunal’s own finding of dishonesty, and the striking-off sanction. The central issues were whether the Tribunal had been improperly influenced by the civil judgment, whether its findings were within the allegations made, and whether the sanction was disproportionate.

1. Admission and use of the civil judgment. The Tribunal was entitled to read the judgment of Peter Smith J as prima facie evidence of relevant background facts under rule 30 of the Solicitors (Disciplinary Proceedings) Rules 1994. The judge’s wider views about the claimant’s dishonesty and integrity were not admissible to prove dishonesty in these proceedings. The Tribunal had to reach its own conclusion and apply the criminal standard of proof.
2. The Tribunal’s general statement that it would confine itself to the relevant conduct was insufficiently precise. However, its express statement that it reached its conclusion independently of the civil judgment, and without taking account of the civil trial judgment, was accepted as accurately representing its state of mind. The first three grounds therefore failed. The court observed that, since the background facts were undisputed, reliance on the judgment had been unnecessary.
3. Pleading and proof of dishonesty. A Rule 4 statement should identify with precision the conduct alleged to be dishonest and should state that the conduct was dishonest by the ordinary standards of honest behaviour and that the solicitor knew this. The Law Society could also plead, in the alternative, a state of mind falling short of dishonesty, such as a blinkered or reckless disregard of professional obligations.
4. The Tribunal was entitled to find dishonesty in the claimant’s failure to disclose conflicts between the client, Westminster Services Limited and himself, since he stood to profit from the transaction. It was also entitled to regard his acting as a solicitor in an area in which he lacked competence as conduct which represented that he was competent to advise.
5. The Tribunal’s references to the extraordinary promised return and the scheme’s apparent respectability did not demonstrate that it had found the claimant personally fraudulent. Read as a whole, the decision established dishonesty in the context of the conflicts of interest and lack of competence. The finding was justified beyond reasonable doubt.
6. A finding of dishonesty by a solicitor will generally lead to striking off. No basis existed for interfering with the Tribunal’s proportionate sanction. The appeal was dismissed.

• Solicitors’ Disciplinary Tribunal: On 1 March 2005, the claimant was found guilty of dishonesty and struck from the Roll of Solicitors.
• High Court (Administrative Court): The appeal was dismissed. The Tribunal’s finding of dishonesty and striking-off order were upheld.