Decision date: 2 November 2012

Court remits issue of costs back to SDT after they proceed to determine the matter in absence of solicitor.

The appellant solicitor (A) had faced allegations before the Solicitor’s Disciplinary Tribunal (SDT) that related to his practice as a partner at two separate firms where he had worked. It was found by the SDT that in relation to the first firm, the books of account were not properly written up contrary to the Solicitors’ Account Rules (the Rules) and that he had failed to produce records during the Law Society’s inspection. In relation to the second firm, it was found that books of account were not properly written up, moneys had been transferred from client to office account contrary to the Rules, that A had failed to deal properly with money held in client account and did not comply fully with the money laundering regulations during a conveyancing transaction. Dishonesty was not alleged.

It was found that although the manner in which A had run the two firms had clearly been inadequate and ineffectual, his actions were not necessarily incompatible with his practising as a solicitor in the future. An indefinite suspension was imposed. The SDT ordered that A pay costs totalling £35,825, on the basis that he had chosen not to attend and had supplied no evidence of means.

A appealed on a number of grounds, only one of which succeeded. The Court rejected his submission that, as his terms of engagement expressly provided that he was not to be responsible for the client account and office account, he should not be culpable. It was held that it was not open to A to contract out of obligations under the Rules. The Court also rejected the contention that the Tribunal had erred in its approach and its findings and that it had ignored mitigation.

However, the Court did find that when ordering a solicitor to pay costs it was relevant for the Tribunal to consider means. Having determined the issues before them, it may have been necessary for the Tribunal to hear evidence and submissions on costs for the issue to be fairly addressed. Although A had chosen not to appear, there had seemingly been no warning of the potential costs consequences of the determination. The issue of costs was remitted back to the Tribunal.

At first glance, this case appears somewhat at odds with the Court’s consideration in the recent case of Faniyi v Solicitors Regulation Authority [2012] EWHC 2965 where the rather more robust view was taken that by choosing to stay away, the registrant must be taken to have appreciated that, if adverse findings were made against him, he would not be present to make submissions about any personal mitigation. It is not known whether Faniyi was considered in the present case; the full transcript is awaited.

In light of this decision, it would seem prudent for regulators to make explicit all potential sanction and costs implications in their notices of hearing. This will alert registrants to all matters that will be considered at the hearing and allow Panels to be more readily able to find that a registrant has waived his right to address them on those issues by his non-attendance.