[2007] EWHC 3043 (Admin)

When determining whether a solicitor has been dishonest, different tests apply to solicitors’ disciplinary cases and cases concerning dishonest assistance in breach of trust. In disciplinary cases, the test includes a subjective element which requires the person in question to have been aware that he was acting dishonestly by the ordinary standards of reasonable and honest people. The approach taken to the test for dishonesty in accessory to a breach of trust cases by the Privy Council in Barlow Clowes International Ltd v Eurotrust International Inc should not be followed in disciplinary cases. The tribunal had failed to consider whether Mr Bryant was aware that his conduct was dishonest and their decision that he was dishonest should therefore be quashed.

Comment: the House of Lords considered the dishonesty test in the context of a solicitor’s dishonest assistance in a breach of trust in Twinsectra Ltd v Yardley (2002). There had been uncertainty about the extent to which a subjective element formed part of the dishonesty test in civil cases. Unfortunately the confusion continues to some extent although Bryant provides welcome honesty about the chaotic approach taken by the courts. The Privy Council in Barlow Clowes (2005) interpreted Twinsectra as applying a predominantly objective test: if by ordinary standards a defendant’s mental state would be characterised as dishonest, it is irrelevant that the defendant judges by different standards. The defendant needs only to be conscious of the elements of the transaction which make participation transgress ordinary standards of honest behaviour. This approach has been followed by the Court of Appeal in Abou-Rahmah v Abacha where Arden LJ openly acknowledged that the Privy Council had interpreted Twinsectra in a way which was not obvious from a reading of the House of Lords’ judgment which refer to a two-limbed test.

In solicitors’ disciplinary cases, the Court of Appeal applied both the objective and subjective limbs of the Twinsectra test in Bultitude v The Law Society (2004) and this was followed in Donkin v The Law Society (2007). In Bryant the Divisional Court had to decide whether to follow the Privy Council’s objective approach in Barlow Clowes or to stick with the line take in disciplinary cases. The court concluded that it was bound by Bultitude (Privy Council decisions are not binding despite the fact that the judges are Law Lords) and considered the two-limbed Twinsectra test to be more appropriate in disciplinary cases, since it corresponds closely to the criminal test for dishonesty. Although disciplinary cases are not criminal in character, the consequences for the defendant of a finding of dishonesty are extremely serious both professionally and personally. In such cases, therefore, the test to be applied requires the defendant to have acted dishonestly by the ordinary standards of reasonable and honest people and to be aware that, by those standards, he was acting dishonestly.