Solicitors Regulation Authority v Robinson

Under para 13A of Sch 1 to the Solicitors Act 1974, the High Court has two separate discretions. It may decide whether to order a former partner to pay intervention costs and, if so, what proportion to order.

The statutory threshold is satisfied where the conduct giving rise to intervention was carried on with the former partner’s consent or connivance, or was attributable to the former partner’s neglect. An owner and employer who allows a practice to continue without compliant management, authorisation or control arrangements may bear responsibility even without direct involvement in client matters. The court may order the whole of the intervention costs where the former partner bears responsibility for the continuing regulatory breaches.

The Solicitors Regulation Authority brought a claim under CPR Part 8 against John McLee Robinson, seeking recovery of intervention costs under para 13A of Sch 1 to the Solicitors Act 1974. Mr Robinson was the owner of a recognised solicitors’ practice and accepted that he was a former partner for the purposes of para 13A.

After Mr Robinson’s suspension, the practice continued operating without the required authorisation and compliant management arrangements. The SRA intervened after investigations identified continuing regulatory breaches, including inadequate supervision and control of client accounts. The principal issues were whether para 13A conferred a discretion both to make an order and to determine the proportion payable, and whether the statutory conditions were satisfied.

1. Statutory discretion. Paragraph 13A(1) of Sch 1 to the Solicitors Act 1974 provides that the High Court “may” order a former partner to pay a specified proportion of intervention costs. Paragraph 13A(2) is a threshold condition, not a command that an order must follow once the condition is met. The court therefore has an unfettered discretion both as to whether to make an order and as to the proportion payable. A zero proportion is legally possible, although the separate discretions may have little practical difference in some cases. (paras 4–6)
2. Consent, connivance or neglect. The conduct giving rise to the intervention was the continuation of the practice in breach of regulatory requirements. Mr Robinson remained the sole owner and employer, controlled the practice in substance, knew that attempts to regularise its status had failed, and neither ensured compliant arrangements nor closed the practice. The conduct was therefore attributable to his consent, connivance or neglect within para 13A(2). (paras 24–35)
3. Responsibility of an owner. The distinction between being held out as a partner and having an ownership interest was material. Although others were held out as partners, Mr Robinson’s ownership and employer status meant that he retained ultimate responsibility for ensuring that the practice either operated in compliance with regulatory requirements or ceased practising. His responsibility was not removed by the SRA’s allowing time for others to attempt regularisation. (paras 7, 28–33)
4. Order. It was appropriate to make an order under para 13A. Mr Robinson had prime responsibility for the breaches after his suspension and sole responsibility for their continuation and lack of effective remedy before intervention. He was ordered to pay 100 per cent of the intervention costs, subject to the consequential order being agreed or dealt with on paper. (paras 34–37)