Solicitors Regulation Authority v Ali Chan & Ors

On an appeal from a specialist disciplinary tribunal, the appellate court should respect the tribunal’s factual assessment and choice of sanction, but must intervene where its evaluation or conclusion is wrong. A tribunal’s primary findings may compel findings of want of integrity, lack of independence and conduct diminishing public trust, even where dishonesty is not alleged and the tribunal characterises the conduct as incompetence or misunderstanding. Solicitors who fail to disclose material risks, conflicts and financial interests, thereby subordinating clients’ interests to personal profit, may commit serious professional misconduct. The appropriate sanction must be reconsidered in light of those findings. The court need not itself impose striking off where a lesser sanction remains potentially appropriate.

The Solicitors Regulation Authority appealed against a decision of the Solicitors’ Disciplinary Tribunal concerning two solicitors and their controlled company, Abode Solicitors Limited. The Tribunal had found numerous breaches arising from the operation of stamp duty land tax schemes, including failures to disclose material information, conflicts of interest and improper handling of client money. It fined each solicitor £15,000 and revoked Abode’s recognition, but rejected allegations of want of integrity, lack of independence, conduct diminishing public trust, connection with an unreputable business and one allegation concerning use of a client account as a banking facility.

The SRA challenged those conclusions and the sanctions. The respondents did not pursue their challenges to the fines. The central issues were whether the Tribunal’s primary findings supported the additional disciplinary findings and whether the sanctions required reconsideration.

1. Appeal. The appeal was allowed on all challenged grounds except the allegation concerning use of the client account as a banking facility and the complaint about the Tribunal’s treatment of written submissions on sanction. The matter was remitted to the Tribunal for reconsideration of the appropriate sanction.
2. Appellate approach. The Tribunal was a specialist fact-finding body entitled to respect in its assessment of evidence and sanction. The appellate court should not lightly interfere, but must do so where its own conclusion is that the Tribunal’s evaluation or conclusion is wrong.
3. Integrity and independence. The Tribunal’s findings showed that the respondents failed to disclose the aggressive and risky nature of the schemes, material consequences for purchasers, information relevant to lenders, and their own financial interests. The obvious inference was that clients were not informed because disclosure might deter them from participating. The clients’ interests were thereby subordinated to the respondents’ financial interests. Those findings were consistent only with want of integrity and failure to act independently.
4. Public confidence and reputation. The same conduct compelled findings that the respondents acted in a way likely to diminish public trust in them and in the provision of legal services. The charge that they were connected with an unreputable business, Omega, was also proved. Omega had been established for their financial purposes and its involvement did not accord with the advice obtained from counsel.
5. Other matters. The Tribunal’s finding that the respondents’ overall culpability and responsibility were the same was open to it on the evidence. The allegation that the client bank account had been used as a banking facility was not proved on the limited material available.
6. Sanction. The fines could not stand once the additional findings were made. The misconduct was serious and showed heedless indifference to the interests of purchaser and lender clients. Although striking off might be appropriate, the court could not conclude that it was the only permissible sanction because dishonesty had not been alleged. The sanction issue was therefore remitted.

• Solicitors’ Disciplinary Tribunal: By a decision filed on 29 October 2014, the Tribunal found numerous breaches of the Solicitors’ Code of Conduct and Solicitors’ Accounts Rules, fined each individual respondent £15,000 and revoked Abode’s recognition. It rejected several further allegations.
• High Court (Administrative Court): The appeal was allowed on the challenged grounds except the client-account allegation and the complaint concerning written submissions on sanction. The sanction issue was remitted to the Tribunal.