Izzet & Anor v The Law Society

Solicitors’ disciplinary penalties will be upheld where the Solicitors Disciplinary Tribunal is entitled to regard repeated regulatory breaches, failures to protect clients and disregard of undertakings as serious misconduct. Client-account records must accurately distinguish client money from solicitors’ money, and discovered breaches must be remedied promptly. A solicitor must ensure that a lender receives accurate information about the purchase price and must honour an undertaking, regardless of the apparent triviality of the underlying matter. Persistent failure to respond to clients and the regulator may demonstrate a fundamental failure to understand professional responsibilities. Where the misconduct shows flagrant disregard for those responsibilities, the tribunal may impose severe sanctions, including striking off or suspension.

These were statutory appeals under section 49(1)(b) of the Solicitors Act 1974 against penalties imposed by the Solicitors Disciplinary Tribunal. The appellants had previously been fined for breaches of the Solicitors Accounts Rules. At a later hearing, the tribunal found further misconduct involving client-account breaches, failure to notify lenders of discounted purchase prices, failure to respond appropriately to a client, and breach of an undertaking to provide an indemnity policy.

Mr Izzet was struck off the Roll of Solicitors. Mr Cazaly was suspended for three years. The central issue was whether those penalties were justified in light of the seriousness and cumulative nature of the misconduct.

1. The appeals were dismissed. The tribunal’s penalties were justified, and any lesser punishment would have been wrong.

2. A breach of rule 7 of the Solicitors Accounts Rules 1998 was serious where an unallocated surplus remained in the client account after a substantial shortfall had been made good. The integrity of client accounts depends on accurate records distinguishing client money from the solicitor’s own money. The tribunal was entitled to aggravate the breach by the failure to take remedial action despite the earlier disciplinary proceedings.

3. Under rule 1(c) of the Solicitors Practice Rules 1990, solicitors acting for a lender had to ensure that the lender knew the true purchase price. The obligation was not discharged by relying on a broker or by pointing to market practice. Accurate notification was particularly important because a difference between the notified price and the true price could indicate mortgage fraud.

4. Failure to respond to a client whose mortgage had not been discharged was a regulatory failure, not merely a service issue. A solicitor’s responsibility includes protecting the client and responding properly to a complaint or request for assistance.

5. A solicitor’s undertaking must be honoured. Its importance does not depend on whether the underlying document is regarded as central or incidental to the transaction. Solicitors’ undertakings are central to legal practice, and persistent failure to comply, coupled with failure to co-operate with the regulator, demonstrated serious professional misconduct.

6. The cumulative pattern was one of serial disregard for regulatory requirements and professional responsibilities. The tribunal was entitled to impose striking off in Mr Izzet’s case and a three-year suspension in Mr Cazaly’s case. The appellants were ordered to pay the respondent’s costs jointly and severally in the sum of £7,500.

• High Court (Administrative Court): statutory appeals from penalties imposed by the Solicitors Disciplinary Tribunal were dismissed.