Bryant & Anor v The Law Society

In solicitor disciplinary proceedings, dishonesty requires both limbs of the Twinsectra test: conduct dishonest by ordinary standards, and awareness that it would be regarded as dishonest by those standards. The civil accessory-liability approach in Barlow Clowes does not displace that disciplinary test. Good-character evidence may be relevant to dishonesty, as well as to sanction, where it bears on credibility or propensity.

A serious allegation of knowing participation in dubious transactions requires proof of actual knowledge. Deliberate blindness or deliberate refusal to enquire may establish that knowledge. Objective incompetence in failing to recognise transactions bearing indicia of fraud is distinct from knowing participation or dishonesty.

Hugh David Bryant and Reginald Bench appealed against findings and sanctions imposed by the Solicitors’ Disciplinary Tribunal. The tribunal found most of seven allegations proved, found Mr Bryant dishonest and struck him off, and suspended Mr Bench for three years.

The appeals challenged the dishonesty test, the exclusion of character references, findings concerning dubious transactions and client money, breaches of professional undertakings and the Solicitors’ Accounts Rules 1998, and the penalties.

1. Dishonesty. The dishonesty finding against Mr Bryant was quashed. In disciplinary proceedings the court must ask whether the conduct was dishonest by ordinary standards and whether the solicitor was aware that, by those standards, it was dishonest. Bultitude v The Law Society was binding authority for that separate subjective element. Barlow Clowes, decided in the context of civil accessory liability, did not alter the disciplinary test.
2. The tribunal had applied an essentially objective standard and had made no finding that Mr Bryant knew his conduct would be regarded as dishonest. It had also wrongly excluded substantial character evidence. Such evidence cannot itself provide a defence, but may be relevant to credibility, propensity and dishonesty. The finding was quashed rather than remitted because the accepted evidence provided no proper basis for proving the subjective element.
3. The six transactions were properly characterised as “dubious”, meaning transactions bearing indicia of fraud in which no reasonable solicitor who had properly investigated the matter would act. The appellants’ failure to recognise that and to stop acting for NIC and Mr Alonso amounted to serious incompetence. The tribunal had not expressly found knowing participation. Actual knowledge was required; deliberate blindness or deliberate refusal to enquire could suffice.
4. Whether arrangement fees were held for NIC or third-party clients depended on the relevant contract and the circumstances of receipt. Allegations 2 and 3 succeeded only in relation to Rose Excalibur. Mr Bryant breached his undertaking concerning Both Feet Films during the period before a separate account was opened. Allegation 5.2 failed. Rule 32(2)(b) was breached only in relation to Rose Excalibur and Both Feet Films after the undertaking. Rule 22 was not breached.
5. Mr Bryant’s striking-off order was quashed and replaced by suspension for two years from 17 October 2006. Mr Bench’s suspension was reduced to nine months from that date. The tribunal costs order remained undisturbed. The Law Society was ordered to pay the appellants’ appeal costs.

The judgment describes appeals from findings and sanctions imposed by the Solicitors’ Disciplinary Tribunal. The tribunal’s order was made on 17 October 2006 and its Findings were published on 12 January 2007.

• High Court (Administrative Court): the appeals succeeded in part. The dishonesty finding against Mr Bryant and several misconduct findings were set aside or varied, and the penalties were reduced.