In the recent case of The Solicitors Regulation Authority v Solicitors Disciplinary Tribunal [2016] EWHC 2862 (Admin), the High Court made some interesting comments in relation to the varying standards of proof at different stages of the regulatory and disciplinary process for solicitors. Although obiter, it queried whether it is justifiable that when making findings of fact the Solicitors Disciplinary Tribunal ("the SDT"), like the Bar Tribunals and Adjudication Service ("BTAS"), applies the criminal standard of proof (beyond reasonable doubt), when the Solicitors Regulation Authority ("the SRA") only applies the civil standard (balance of probabilities).

The context

A consultant, Mr Arslan, had undertaken legal work pursuant to a contract between a legal aid firm and a company that he controlled. The SRA adjudicator found that, on the balance of probabilities, Mr Arslan had attempted to mislead the SRA during an investigation by amending or creating documents. The adjudicator made an order pursuant to section 43(2) of the Solicitors Act 1974, restricting Mr Arslan's employment, and imposed a rebuke and a fine of £500 under section 44D(2) of the Act.

The SDT reviewed the decision and found Mr Arslan not to be "an employee of a solicitor", within section 44D of the Act, and thus not to be subject to section 44D penalties. Further, as the SDT could not find that Mr Arslan had amended or created the documents in order to mislead the SRA, it revoked the section 43 order.

The SRA challenged the SDT's decision in the Administrative Court. The Court upheld the SDT's conclusion that Mr Arslan was not an employee and therefore not subject to section 44D. However, the Court reinstated the SRA's section 43 order, holding that the SDT had overstepped its accepted function, in the particular circumstances of the present case, as a mere reviewer of the SRA's conclusions, and had excessively interfered with the SRA's findings on the facts.

One of the issues raised in the High Court was whether the SDT had been right to consider that, in relation to both the section 43 and 44D cases, the correct standard of proof for it to apply was the criminal standard. The Court first made the point that, given the SDT's role in this particular case as a review body, it was not for the SDT here to apply its own standard of proof but rather to ask what standard the SRA as the primary fact-finder ought to have applied (the answer to which was the civil standard) and whether the SRA had properly applied that standard. In addition, however, Counsel for the SRA argued (as, apparently, he also had done in a previous case) that there was uncertainty about the applicable standard of proof where the SDT itself acts as the primary fact-finder. Mr Justice Leggatt held that this was not such a case, because here the SDT was only carrying out a review. However, he expressed sympathy for the view argued for by Counsel for the SRA that it is unsatisfactory and illogical for the SDT, acting as a primary fact-finder, to apply a different standard of proof from that which the SRA applies when carrying out a similar fact-finding role. Further, he described the authorities in support of the current approach as "ripe for reconsideration". Sir Brian Leveson gave a short concurring judgment.

The regulators' powers

When the SRA investigates solicitors, it makes its findings on the balance of probabilities, and only has the power to issue a rebuke, or a fine of up to £2,000. However, the SDT, to which the SRA may refer matters and which has greater sanctioning powers, uses the criminal standard of proof when exercising a fact-finding role.

A key argument in favour of the current position, whereby the SDT applies the criminal standard of proof, relates to the seriousness of the conduct the SDT may be considering and/or of the sanctions it may impose (with their attendant professional and reputational consequences). The SRA's main reasons for referring matters to the SDT include the latter's powers to impose unlimited fines, to suspend solicitors from practice (either for a fixed period or indefinitely), and to permanently strike solicitors off the Roll. The SRA will only refer matters to the SDT if it believes that there is a realistic prospect that, on the evidence, the SDT would be sure that the circumstances and facts were as alleged, and thus would make a finding of misconduct (the evidential test). The SRA will consider the risk to consumers, or the need to provide credible deterrence to the regulated person or firm. The SRA would also need to be satisfied that it will be in the public interest for the matter to be heard (the public interest test).

Precedent

There is case law, at a high level, supporting the status quo. In particular, in Maharaj Krishan Bhandari v Advocates Committee On Appeal from the Court of Appeal for Eastern Africa [1956] 1 W.L.R. 1442, an advocate of the Kenyan Supreme Court was found guilty of professional misconduct for attempting to mislead the court by not disclosing a relevant prior judgment regarding his client. With regard to the burden of proof to be satisfied, the Court of Appeal stated, "We agree that in every allegation of professional misconduct involving an element of deceit or moral turpitude a high standard of proof is called for, and we cannot envisage any body of professional men sitting in judgment on a colleague who would be content to condemn on a mere balance of probabilities.” In the Privy Council, the Lords agreed with this finding, and did not consider that either the Advocates Committee or the Supreme Court should have applied any lower standard of proof.

Re A Solicitor [1993] QB 69 considered the standard of proof to be applied by the SDT's predecessor, the Disciplinary Tribunal of the Law Society. Lord Lane considered that, "at least in cases such as the present, where what is alleged is tantamount to a criminal offence, the tribunal should apply the criminal standard of proof". He further held that it would be anomalous if Barristers and Solicitors were to apply different standards in their respective disciplinary proceedings. In the case of Campbell v. Hamlet [2005] UKPC 19, the Privy Council considered that Lord Lane's finding in Re A Solicitor permitted the Law Society Disciplinary Committee to apply the criminal standard in all cases, rather than only in those where the alleged offence amounts to a criminal offence. This was further confirmed by the House of Lords in Re (D) v. Life Sentence Review Commissioners (Northern Ireland) [2008] UKHL 33, where Lord Carswell stated obiter that disciplinary proceedings brought against members of a profession require proof beyond reasonable doubt, given the serious consequences of adverse disciplinary findings.

In Richards v. Law Society [2009] EWHC 2087 (Admin), Sir Anthony May considered that in so far as Re A Solicitor and Campbell v. Hamlet may arguably leave some room for manoeuvre where the alleged misconduct does not have "criminal overtones", any debate and decision would be better held and made in cases where the issue of the standard of proof is more than academic, and most probably in (what was then) the House of Lords.

Proponents of change

Counsel for the SRA in The Solicitors Regulation Authority v Solicitors Disciplinary Tribunal argued that proceedings before the SDT are civil, rather than criminal, in nature; that the essential purpose of professional regulation and discipline is the protection of the public and not punishment of a person who commits misconduct; and that, in principle, the proper standard of proof to apply in all such proceedings is the civil and not the criminal standard. He also maintained that, as Rule 7.7 of the Disciplinary Procedure Rules 2011 obliges the SRA to apply the civil standard of proof where it makes its disciplinary decision without referral to the SDT, it is incongruous for the SDT to continue applying the criminal standard.

Leggatt J. commented in his judgment that the climate and approach to the application of the criminal standard in civil proceedings have changed since Re A Solicitor was decided.

Similar views have also been expressed elsewhere. In January 2016, the government's Insurance Fraud Taskforce published a report, which recommended both that the SRA should have greater fining powers, and that the criminal standard of proof could be lowered. The report called for a policy change on the basis that the SDT's criminal standard of proof is "disproportionate". Comparing this standard to those applied in other professions (as to which see further below), the report cited the Law Commission's opinion on medical disciplinary proceedings, as follows: "It is not acceptable that a registrant who is more likely than not to be a danger to the public should be allowed to continue practising because a panel is not certain that he or she is such a danger."

Also in January 2016, the Law Society Gazette reported that the SRA's chief executive, Paul Phillip, agreed that the SDT's adoption of the civil standard of proof would be the right approach. The Gazette has since reported Mr Phillip as describing The Solicitors Regulation Authority v Solicitors Disciplinary Tribunal as an "important judgment", and as considering it "clearly wrong that the SDT applies a different standard to the SRA".

More broadly, over the past five years, a variety of sources have commented that clients could be exposed to risk if regulators demand an overly high standard of proof in disciplinary hearings. In 2011, the Legal Services Consumer Panel was reported as stating: "The underlying purpose of disciplinary proceedings is public protection, which could be frustrated if a licensing authority is unable to take action, or is unsuccessful in doing so, because the evidentiary burden is disproportionate".

Comment

The SDT and BTAS differ from a number of other disciplinary bodies which apply the civil standard of proof, including the General Medical Council (following changes made in 2008 in light of, amongst other things, the Harold Shipman Inquiry), the Financial Reporting Council, and the Royal Institute of Chartered Surveyors.

However, given the serious nature of the allegations often under consideration in the SDT and the potential professional and reputational consequences of SDT sanctions, there is significant support within the profession for maintaining the status quo, namely the application of the criminal standard. The Law Society argued accordingly in The Solicitors Regulation Authority v Solicitors Disciplinary Tribunal; and to date the SDT has not been reported to have moved from its position against seeking primary legislation to make a change.

Therefore, whether Sir Brian Leveson's concluding remarks in this recent case that there is a need for "a re-evaluation of the approach to disciplinary measures intended to protect the public" will gain traction, remains to be seen. In any event, what any re-evaluation would look like is unclear. For example, might a distinction be drawn between cases involving conduct with and without "criminal overtones"? In any event, as clearly indicated by Sir Anthony May in Richards v. Law Society, it is likely that the judiciary would feel it more appropriate to make any changes to policy or law only when the issue is central to a case, and even then most probably before the Supreme Court. Therefore, answers to these questions still seem some way off.