Solicitors Regulation Authority v Sharma

Save in exceptional circumstances, proven dishonesty by a solicitor will result in striking off. This is the normal and necessary sanction because public confidence requires solicitors to display complete integrity, probity and trustworthiness.

Whether the residual exceptional category applies depends principally on the nature, scope and extent of the dishonesty. Relevant matters include its duration, any benefit to the solicitor and any adverse effect on others. The absence of client loss, or the fact that dishonesty occurred in the solicitor’s private business affairs, does not itself justify leniency.

On a sentencing appeal, the High Court must give considerable respect to the expert tribunal. It may nevertheless intervene where the sentence is clearly inappropriate or excessively lenient.

The Solicitors Disciplinary Tribunal found that a solicitor had dishonestly forged eight signatures on five transactional documents and had sent a misleading letter confirming that a stock transfer form had been duly signed. The conduct contravened Rules 1.02 and 1.06 of the Solicitors Code of Conduct 2007.

The Tribunal described the dishonesty as being at the top end of the scale but treated the absence of public loss and the solicitor’s beneficial ownership of the relevant company as exceptional circumstances. It suspended him for three years instead of striking him off.

The Solicitors Regulation Authority appealed under section 49 of the Solicitors Act 1974, contending that the sanction was excessively lenient. The central issue was whether the circumstances placed the case within the small residual category in which striking off would be disproportionate.

1. The appeal was allowed. The three-year suspension was excessively lenient and was replaced by an order striking the solicitor off the Roll. Laws LJ agreed with Coulson J’s reasons and proposed order.

2. An appeal from the Solicitors Disciplinary Tribunal normally proceeds by review. The Tribunal is an expert and informed body whose sentencing decisions deserve considerable respect. Even after giving that respect, however, the High Court may intervene where the sentence is clearly inappropriate. The question here was whether the sentence was excessively lenient, not merely whether the court would itself have imposed a different sentence.

3. Save in exceptional circumstances, proven dishonesty requires a solicitor to be struck off. A small residual category exists in which striking off would be disproportionate. Its application depends on the nature, scope and extent of the dishonesty, including whether it was momentary or sustained, whether the solicitor benefited and whether others were adversely affected.

4. The case did not fall within that residual category. There were repeated acts of forgery involving eight signatures on five documents, followed by a separate dishonest letter. The conduct was sustained for up to a month. The letter provided an opportunity to correct the earlier dishonesty but instead deliberately misled a third party and used the solicitor’s firm’s notepaper to enhance its apparent reliability. The solicitor benefited because the transaction proceeded and the forgeries enabled him to continue withholding fees owed to the nominee directors’ company. His unsuccessful denial of dishonesty further reduced the available mitigation.

5. The Tribunal adopted an erroneous view of harm. Dishonest conduct by a solicitor harms the public interest even where no client suffers financial loss. Nor is dishonesty materially less serious merely because it occurs in the solicitor’s private business affairs. A person who chooses a corporate structure involving offshore companies and nominee directors cannot rely on beneficial ownership to mitigate dishonest circumvention of that structure. Such transactions create an enhanced need for probity and integrity.

• High Court (Administrative Court): The Solicitors Regulation Authority’s appeal under section 49 of the Solicitors Act 1974 was allowed. The Tribunal’s three-year suspension was replaced by striking off.
• Solicitors Disciplinary Tribunal: The Tribunal found both allegations proved, including dishonesty, suspended the solicitor for three years and ordered him to pay £7,000 in costs.