Publication: The e-Regulator

FACTS:

D was an equity partner in a firm of solicitors (‘the Firm’).  Prior to joining the Firm, D had acted for an organisation that operated a Claims Management Scheme (‘the Scheme’) for personal injury claimants.  When D joined the Firm in 1998, he introduced them to the Scheme and they were subsequently appointed to the Scheme’s panel.  Concurrently, D also acquired a one third share in a company (‘the Company’) that was used by the Scheme to supply medical reports for claimants.

In 2000, the Company was acquired by The Accident Group.  D’s firm agreed to instruct the Company to provide medical reports for all relevant claims where the firm was acting. D failed to disclose his interest in the Company to the partners at the Firm or to The Accident Group, waiting until 2007 when he reported himself to the Solicitors Regulation Authority (SRA).

The SRA alleged that the D had permitted the firm’s participation in a sham arrangement that was actually intended to circumvent the prohibition against the payment of referral fees.  The SRA also argued that the D had created a conflict between his financial interest in the Company and in the Firm’s duty to the client.  As a result, D had committed professional misconduct having engaged in conduct that fell short of the standards of Professional Conduct for Solicitors.

The SRA alleged that D’s conduct had been dishonest or, in the alternative, reckless.  D admitted the allegation but denied acting dishonestly.  The Solicitors Discipline Tribunal (SDT) found that D had acted dishonestly and in the circumstances, the allegation was proved.

When considering and announcing the appropriate sanction, the SDT highlighted the amount of time that had passed since the matter occurred and the minimal risk of harm to the public if D remained in practice.  A fine of £23,500 was deemed to be the appropriate sanction.

The SRA appealed this sanction on the basis that the tribunal had erred in law. It also stated that the sanction was excessively lenient and was not appropriate given the dishonest conduct.  The appeal was allowed.

ANALYSIS:

The Court commented that cases of proven dishonesty were the most serious breaches of Professional Standards.  In such cases, tribunals almost invariably ordered that the individual should be struck off.  The Court pointed out that any competent solicitor would appreciate that he was not entitled to make a secret profit from services he had arranged on the client’s behalf.

The Justices concluded that in all the circumstances, there was no justification for the tribunal to depart from a striking-off order (this being the normal penalty in cases where dishonesty has been proved). D’s conduct had been entirely deliberate and calculated; he had deliberately concealed his conflict of interest, his conduct had involved repeated wrongdoing over a period of time and he had been motivated by financial gain.  Furthermore, he had failed to disclose his wrongdoing until forced to do so and had denied acting dishonestly to the tribunal.

Although obviously a decision on its own facts this case serves as a stark reminder that the courts can and do interfere in sanction decisions of tribunals. For solicitors at least, the decision in Dennison reiterates that a finding of dishonesty may result in a striking off order, even where there is no risk of repetition, the risk to the public is minimal and a number of years have passed since the dishonest conduct occurred.