Margaret Bridget Hetherington & Anor. v Solicitors Regulation Authority Limited

On an appeal from a specialist disciplinary tribunal, the High Court must determine whether the decision was wrong or unjust because of serious procedural or other irregularity. It should exercise particular caution before interfering with findings of fact, evaluative judgments or findings of dishonesty, especially where the tribunal heard the witnesses. A different conclusion is insufficient. Intervention requires an identifiable error of principle, a critical factual finding unsupported by evidence, a demonstrable misunderstanding or omission of relevant evidence, or a conclusion that cannot reasonably be explained or justified.

A solicitor’s duty extends beyond the strict limits of a retainer where professional knowledge reveals obvious risks that a lay client may not appreciate. Deliberately limiting advice to preserve income may constitute professional misconduct, an own-interest conflict and dishonesty.

The appellants, two solicitor siblings, appealed under section 49 of the Solicitors Act 1974 against a Solicitors Disciplinary Tribunal decision dated 27 September 2021. The Tribunal found that they had failed to advise clients adequately in property investment schemes, preferred their own financial interests, acted dishonestly and should be struck off. It also ordered them to pay £98,000 in costs.

The appeal challenged the findings of dishonesty, the treatment of findings in earlier civil proceedings, the consideration of character evidence, the separate assessment of each appellant, the finding of professional misconduct and the finding of an own-interest conflict. The central issue was whether the Tribunal’s decision was wrong or unjust within CPR 52.21.

1. Appeal dismissed. The appellants did not demonstrate that the Tribunal’s decision was wrong or unjust because of serious procedural or other irregularity. The applicable threshold was high. The appellate court was not entitled to substitute its own assessment merely because it might have reached a different conclusion.
2. The Tribunal was a specialist tribunal with particular expertise in the professional standards expected of solicitors. Its factual findings and evaluative judgments, including its assessment of witnesses and dishonesty, required restraint on appeal. Its judgment had to be read as a whole, and it was not necessary for it to refer expressly to every piece of evidence.
3. The Tribunal was entitled to find that the appellants failed to explain material contractual provisions, including the non-refundable deposit, onerous resale provisions, rent liabilities and buyback arrangements. Advising clients to obtain independent advice did not discharge the appellants’ own responsibility to ensure that clients understood material risks.
4. The Tribunal was entitled to conclude that the failures were deliberate and intended to preserve the firm’s principal source of income. Applying the two-stage test in Ivey v Genting Casinos (UK) Ltd [2017] UKSC 67, it was entitled to find that the appellants’ conduct would be regarded as dishonest by ordinary decent people.
5. The judgment of the Sheffield County Court in JH v The Hetherington Partnership Ltd was admissible under rule 32(2) of the Solicitors (Disciplinary Proceedings) Rules 2019, but its findings were not conclusive or binding. The Tribunal was entitled to assess the evidence before it independently. Rule 32(1), concerning criminal convictions, did not shift the burden of proof in this case.
6. The Tribunal was entitled to find an own-interest conflict. Deliberately withholding advice so that clients were more likely to proceed, thereby preserving the firm’s income, involved preferring the solicitors’ interests over those of their clients.

The appeals against the substantive findings were dismissed. The appellants had not pursued their challenges to sanction and costs, save for reserving their position if the substantive appeal succeeded.

• Solicitors Disciplinary Tribunal: On 27 September 2021, found the allegations proved, struck both appellants off the Roll and ordered payment of £98,000 in costs.
• High Court (Administrative Court): Dismissed the appeal under section 49 of the Solicitors Act 1974.