Solicitors Regulation Authority v James

Dishonesty by a solicitor will almost invariably require striking off. A lesser sanction is justified only within a small residual category of exceptional circumstances. The primary focus must be the nature and extent of the dishonesty and the solicitor’s culpability, including its duration, repetition and harmful consequences.

Mental ill-health, workplace pressure and personal mitigation remain relevant. Once the solicitor is found to have acted dishonestly despite those circumstances, stress, depression or an oppressive working environment cannot, without more, constitute exceptional circumstances. The tribunal must balance such mitigation against the dishonesty rather than treat it as decisive.

The Solicitors Regulation Authority appealed under section 49 of the Solicitors Act 1974 against three decisions of the Solicitors Disciplinary Tribunal. The Tribunal had found that Sovani Ramona James, Esteddar Mariam MacGregor and Peter Naylor acted dishonestly. In each case it nevertheless found exceptional circumstances, partly because of mental-health or workplace pressures, and imposed a suspended period of suspension subject to restrictions.

James had repeatedly misled her client and firm over 17 months and created back-dated letters. MacGregor had assisted in cross-checking material for a fraud and, as compliance officer, delayed reporting the wrongdoing. Naylor had repeatedly misled a client over three months about applications which had not been made.

The central issue was whether the Tribunal had erred in principle, or reached evaluations outside the bounds of what it could properly and reasonably decide, by finding exceptional circumstances and declining to strike the solicitors off.

1. All three appeals were allowed. The findings of exceptional circumstances and the suspended suspensions were quashed. The court substituted orders striking James, MacGregor and Naylor off the Roll of Solicitors.

2. Dishonesty almost invariably requires striking off because the fundamental purpose of disciplinary sanction is to preserve public confidence in the profession’s integrity. The exceptional-circumstances category is a small residual category. The nature and extent of the dishonesty and the degree of culpability must receive the greatest weight. Relevant matters include whether the conduct was momentary or sustained, whether it was repeated, whether the solicitor benefited and whether others were harmed.

3. Mental ill-health, workplace pressures and personal mitigation may be considered. They form part of the solicitor’s state of mind and the overall assessment of culpability. Where the Tribunal has nevertheless found that the solicitor knew the relevant facts and acted dishonestly, stress, depression or oppressive working conditions cannot, without more, amount to exceptional circumstances. Such matters may explain or reduce culpability, but they do not excuse conscious dishonesty.

4. The Tribunal failed in each case to conduct the required balance. It concentrated on personal mitigation, mental health or workplace conditions without giving primary weight to the seriousness, repetition, duration and consequences of the dishonesty. James’ dishonesty continued for 17 months and included back-dated letters. MacGregor repeatedly assisted conduct which she knew supported a fraud and then delayed reporting it for eight to nine months. Naylor repeatedly lied to his client over about three months. None was a case of isolated, momentary dishonesty.

5. An appeal from the Tribunal is by review under rule 52.21 of the Civil Procedure Rules 1998. Respect is due to the evaluative decisions of an expert tribunal. Intervention is justified where there is an error of principle or the evaluation falls outside the bounds of what the tribunal could properly and reasonably decide. Those conditions were satisfied because the sanctions were unduly lenient and clearly inappropriate.

6. Suspended suspension was within the Tribunal’s available range of sanctions, but it was inappropriate in these cases. The court observed that any such order should make clear that further misconduct would activate the suspension. It declined to give wider guidance because that issue had become academic.

Jeremy Baker J agreed with Flaux LJ.

1. High Court, Divisional Court: The Solicitors Regulation Authority’s three appeals were allowed. The sanctions were quashed and orders striking each respondent off the Roll were substituted: [2018] EWHC 3058 (Admin).

2. Solicitors Disciplinary Tribunal: In separate decisions dated 4 January, 19 January and 31 January 2018, the Tribunal found dishonesty but imposed suspended periods of suspension subject to restriction orders.