Shaw & Anor v Logue

On a section 49 appeal from the Solicitors Disciplinary Tribunal, the High Court reviews rather than re-hears the case. It may intervene where the tribunal’s decision is plainly wrong or inadequately reasoned. A disciplinary tribunal must identify the essential factual findings and explain how they support its conclusions, particularly where dishonesty is inferred from complex evidence.

At a without-notice hearing, a solicitor must disclose the existence of third-party funding where it may affect fortification of the cross-undertaking in damages. A solicitor must also correct misleading information given to the court. Where reasons are materially inadequate, the proper course is ordinarily remission to a differently constituted tribunal unless only one outcome is legally possible.

The appellants, solicitors Andrew Shaw and Craig Turnbull, appealed under section 49 of the Solicitors Act 1974 against decisions of the Solicitors Disciplinary Tribunal striking them off the Roll. The proceedings concerned alleged failures to disclose information and alleged misleading statements made during applications for a worldwide freezing order, fortification of the cross-undertaking in damages, and discharge of the order.

The central issues were whether the tribunal had applied the correct dishonesty test, whether its findings were plainly wrong, whether the proceedings were unfair, and whether its written reasons complied with rule 16(5) of the Solicitors (Disciplinary Proceedings) Rules 2007.

1. Appeal allowed and complaint remitted. The appellants’ appeals succeeded substantially because the SDT’s findings were inadequately reasoned. The complaint was remitted for rehearing before a differently constituted tribunal. The upheld findings concerning misuse of confidential information and dishonesty relating to Mr Shaw’s eighth affidavit remained relevant.
2. The court confirmed that the duty of full and frank disclosure continues while proceedings remain without notice. It includes facts which the applicant ought to have discovered by reasonable and proper inquiries, and materiality is assessed by the court. The existence of a third-party funder must be disclosed where it bears on fortification of the cross-undertaking in damages. The solicitor need not necessarily identify the funder by name, but must disclose the funding and whether the funder will fortify the undertaking.
3. There is a separate continuing duty not to mislead the court and to correct inadvertent misleading information promptly. That duty is distinct from the duty of full and frank disclosure.
4. The SDT correctly understood the criminal standard of proof and the two-limb dishonesty test in Twinsectra Ltd v Yardley [2002] 2 AC 164. However, in a complex case involving inferential dishonesty, it had to identify what the solicitors knew, when they knew it, the significance of that knowledge, and why their explanations were rejected. The SDT’s brief conclusions did not adequately show that process.
5. Under section 49, the High Court exercises a review jurisdiction. It will not substitute its own view for that of the specialist tribunal merely because it might have reached a different conclusion. A rehearing is exceptional where reasons are inadequate, and remission is appropriate unless the court is clearly satisfied that only one outcome is tenable.
6. The finding that Mr Turnbull was dishonest in relation to Mr Shaw’s eighth affidavit was adequately reasoned, and striking off was not plainly inappropriate on the material then before the court. Nevertheless, the sanctions fell away following the substantial success of the appeals, and sanction was to be reconsidered by the freshly constituted SDT.

• Solicitors Disciplinary Tribunal: struck both appellants off the Roll on 14 February 2013 and delivered written Findings on 29 April 2013.
• High Court (Administrative Court): allowed the section 49 appeals in substantial part and remitted the complaint for rehearing before a differently constituted tribunal.