Bryant & Anor v Coe

On an application to withdraw a Law Society intervention, the court must consider whether there were grounds for suspecting dishonesty both when the notice was served and when the application is heard. It must then decide, on all the evidence, whether the intervention should continue. The issue is suspicion, not proof of dishonesty. A solicitor has no separate claim under the Human Rights Act for losses caused by an intervention where the statutory procedure is Convention-compliant. Summary judgment is appropriate where the claimant has no real, rather than fanciful, prospect of success and there is no compelling reason for a trial. Advice that an intervention challenge had no realistic prospect of success was not negligent on the evidence.

The claimants, solicitors whose practice had been subject to a Law Society intervention, alleged that the defendant solicitors negligently advised them not to apply within the statutory eight-day period to withdraw the intervention. They also alleged that they had been advised that, even without using that procedure, they could claim compensation from the Law Society under the Human Rights Act.

The second claimant withdrew after becoming bankrupt. The defendant applied for strike-out or summary judgment. The central issues were whether the alleged human-rights advice had been given, whether the advice about challenging the intervention was negligent, and whether a challenge would have had any realistic prospect of success.

1. Disposition. Summary judgment was entered for the defendant on the whole claim under CPR 24.2. The claimants had no real prospect of success and there was no other compelling reason for a trial.
2. Intervention procedure. The court applied the two-stage approach identified in Giles v The Law Society, [1995], Holder v The Law Society, [2003] 3 AER 62, Sritharan v The Law Society, [2004] EWHC 2932 Ch, and Sritharan v The Law Society, [2005] EWCA Civ 476. First, the court asks whether the statutory grounds existed, including reasonable grounds for suspecting dishonesty at the relevant times. Secondly, it decides whether the intervention should continue, balancing public protection against its serious consequences for the solicitor. The court considers all evidence before it and cannot substitute an alternative sanction.
3. The Administrative Court’s later findings that the transactions were dubious, although its finding of actual dishonesty was quashed for failure to apply the subjective element of the Twinsectra v Yardley test, strongly supported the conclusion that an intervention challenge would have failed. Proof of dishonesty was not required for that purpose.
4. Human-rights claim. The authorities established that the statutory intervention procedure was Convention-compliant and that losses caused by an intervention did not give rise to a separate compensation claim against the Law Society under the Human Rights Act. Any human-rights arguments should have been raised within the statutory challenge.
5. The contemporaneous documents gave no real prospect of proving that the defendant had given the alleged human-rights advice. Advice that the intervention challenge was almost bound to fail was reasonable in the urgent circumstances and was reinforced by leading counsel’s advice. The defence of reliance on counsel also had no real prospect of being defeated.
6. Under CPR 24.2, the court must assess whether the case is better than merely arguable without conducting a mini-trial. The evidence showed no realistic prospect of establishing negligent advice or that the intervention could successfully have been challenged.