Solicitors Regulation Authority v Anderson Solicitors & Ors

A disciplinary appeal court should respect the specialist tribunal’s assessment of sanction, but must intervene where the sanction is clearly inappropriate or the tribunal has erred in law, failed to consider relevant evidence, or given inadequate reasons. The prohibition on taking unfair advantage under Rule 10 of the Solicitors Code of Conduct 2007 requires a conscious purpose to take unfair advantage. It differs from the objectively based obligation to treat clients fairly under the SRA Code of Conduct 2011. In assessing sanction, the tribunal must address culpability, harm, aggravating and mitigating features, deterrence and protection of the profession’s reputation. Costs orders require adequate reasoning, particularly where costs are summarily assessed.

The Solicitors Regulation Authority appealed against the Solicitors Disciplinary Tribunal’s acquittal of the respondents on the Rule 10 aspect of allegations concerning misleading conveyancing costs information and overcharging. It also challenged the fines imposed on five individual respondents. The respondents cross-appealed against a joint and several costs order of £80,000.

The Tribunal had found that the respondents’ four-document charging system was inadequate and misleading, that clients had been overcharged, and that various further regulatory breaches had occurred. It had nevertheless found no conscious taking of unfair advantage and imposed modest fines. The central issues were the construction of Rule 10, the proper appellate approach to disciplinary sanctions, and the adequacy of the Tribunal’s reasons for its costs decision.

1. The court applied section 49 of the Solicitors Act 1974. It could intervene for an error of law, failure to take account of relevant evidence, or failure to give proper reasons.

2. Following The Law Society v Salsbury [2008] EWCA Civ 1285, the court held that considerable respect must be given to the Tribunal’s sentencing decision. The same standard applied whether the appeal was brought by the regulator or the solicitor. Intervention was justified where the sanction was clearly inappropriate.

3. Rule 10 required more than deliberate conduct which happened to produce an unfair result. The solicitor must consciously use his or her position for the purpose of taking unfair advantage. This subjective element distinguished Rule 10 from Outcome O(1.1) of the SRA Code of Conduct 2011, which was objectively based. The Tribunal had therefore been entitled to acquit on Rule 10.

4. The fines imposed on the individual respondents were clearly inappropriate and substantially too low. The court considered the long duration, scale, client harm, continuation of the misleading scheme after regulatory concerns had been raised, and the benefit obtained from the scheme. The absence of dishonesty or lack of integrity was relevant mitigation, but did not make the conduct minor. The appropriate headline fines were £15,000 for the third respondent and £5,000 for each of the second, fourth, fifth and sixth respondents. No separate fine was imposed on the firm.

5. The final penalties were remitted to the Tribunal so that the respondents’ means, assets and other relevant circumstances could be properly investigated. The court applied the approach in SRA v Davis & McGlinchey [2011] EWHC 232 (Admin), under which means should be supported by evidence in advance.

6. The cross-appeal on costs succeeded. Although the Tribunal had a wide discretion under Rules 18(1) and 18(3) of the Solicitors (Disciplinary Proceedings) Rules 2007, its reasons for summarily assessing costs at £80,000 were wholly inadequate. Costs were remitted for reconsideration together with the penalties.

The procedural complaint concerning the refusal of a closing submission did not affect the result.

• High Court (Administrative Court): appeals from the Solicitors Disciplinary Tribunal allowed in part. The Rule 10 acquittal was upheld; penalties and costs were remitted for reconsideration.
• Solicitors Disciplinary Tribunal: by order dated 18 March 2013, allegations concerning misleading costs information, overcharging and other regulatory breaches were found proved; fines totalling £1,000 per relevant respondent and £80,000 costs were ordered.