The Law Society v Waddingham & Ors

On an appeal from the Solicitors Disciplinary Tribunal, the appellate court should respect the Tribunal’s expertise but may substitute its own view where appropriate and interfere with a penalty that is clearly inappropriate. Dishonesty allegations requiring the criminal standard of proof must be proved to the point of surety, including where dishonesty is inferred from agreed facts. Serious misconduct may justify suspension even where dishonesty is not proved, particularly where public confidence in the profession is diminished. The appropriate sanction depends on the seriousness of the misconduct, the need to protect the profession’s reputation, and the available mitigation.

The Law Society appealed against findings and penalties imposed by the Solicitors Disciplinary Tribunal in disciplinary proceedings concerning four partners of a solicitors’ firm. The appeal concerning Mr Waddingham was withdrawn after he undertook to remove his name from the Roll and not seek readmission. The remaining appeals concerned Mr Smith and Mr Parsonage.

The Tribunal had found breaches of the Solicitors’ Accounts Rules 1998 and conflicts of interest, but had not found dishonesty proved. It fined Mr Smith £12,000 and Mr Parsonage £7,000, with substantial costs orders. The central issues were whether the Tribunal’s findings should be remitted or reconsidered, whether dishonesty had been proved to the criminal standard, and whether the penalties were appropriate.

1. The appeals were allowed in part. The Tribunal’s fines were quashed, and Mr Smith was suspended from practice for 18 months and Mr Parsonage for 12 months.
2. On an appeal from the Solicitors Disciplinary Tribunal, considerable respect is due to its findings and penalties as those of an expert and informed body. Nevertheless, the appellate court may substitute its own view where appropriate and may interfere with a penalty that is clearly inappropriate. This approach was consistent with Bolton v The Law Society [1994] 1 WLR 512, Otchere v The Law Society [2008] EWHC (Admin.) 2233 and Salsbury v The Law Society [2008] EWCA Civ. 1285.
3. The Tribunal’s handling of the proceedings and its written findings were confused, inconsistent and sometimes inaccurate. Since the primary facts were agreed and no evidence had been called, remittal was unnecessary and the court should determine the dishonesty issue afresh.
4. The two-part dishonesty test derived from Twinsectra Limited v Yardley and others [2002] 2 A.C. 164 required consideration of both the objective standards of ordinary reasonable and honest people and the respondent’s awareness that the conduct would be regarded as dishonest by those standards. The court considered both limbs together. The evidence made a powerful case and the respondents probably had acted dishonestly, but the court was not sure of that conclusion. Applying the criminal standard, dishonesty was therefore not proved.
5. The withdrawal of the misuse-of-trust-funds allegations and the abandonment of the appeal concerning Mr Waddingham were irrelevant to the dishonesty issue. The respondents’ conduct nevertheless amounted to serious misconduct. They had participated in removing substantial trust monies to support their own capital accounts and, in Mr Smith’s case, to assist a client and discharge part of its debt to the firm. Applying the principles in Bolton v The Law Society [1994] 1 WLR 512, the fines were wholly inappropriate, but striking off was disproportionate in light of the mitigation.

1. Solicitors Disciplinary Tribunal: found breaches of the Solicitors’ Accounts Rules 1998 and conflicts of interest, but did not find dishonesty proved. Mr Smith was fined £12,000 and Mr Parsonage £7,000, with costs orders.
2. High Court (Administrative Court): the appeal concerning Mr Waddingham was withdrawn by consent. The appeals concerning Mr Smith and Mr Parsonage were allowed in part. The fines were quashed and suspensions imposed.