Three extraordinary decisions have been delivered by the High Court regarding the Solicitors’ Disciplinary Tribunal’s (SDT) interpretation of ‘lack of integrity’ and ‘dishonesty.’
The issue at the centre of the cases was: are integrity and dishonesty cut from the same cloth in relation to solicitors’ regulations or can they exist as separate offences?
Newell-Austin v SRA [2017] EWHC 411
Deidre Newell-Austin appeared to have the legal world at her feet. Under 40, she ran a practice in London, employing two others. However, her world came crashing down following an SRA investigation in which it was alleged £3.6 million had disappeared from client accounts.
The SDT found Ms. Newell-Austin had given control of her firm to non-admitted members of staff, thereby acquiescing to practice’s involvement in fraudulent conveyancing transactions.
It was held by the SDT that by ignoring the clear risks of her actions, she showed a lack of integrity. This was contrary to principle 2 of the SRA Principles.
Ms. Newell-Austin appealed because only an objective test had been applied and the SDT had not considered her state of mind.
Justice Morris found that there was “no requirement that a solicitor must ‘subjectively’ realise that his conduct lacks integrity.”
He went on to consider what amounted to a “lack of integrity” and put forward three principles:
- “Integrity connotes moral soundness, rectitude and steady adherence to an ethical code”;
- There is no need to over-analyse the meaning of the term ‘integrity’; and
- Lack of integrity and dishonesty are not synonymous. He gave the example of a solicitor removing money from a client account with the intention to pay it back, stating that this lacked integrity but was not necessarily dishonest.
The court also stated that a lack of integrity does not require an element of risk-taking.
Malins v SRA [2017] EWHC 835
Just over a month after the Newall-Austin case, the High Court returned again to the concept of integrity, but this time delivered a very different result.
The Appellant was acting on a litigation matter in 2013. His client had taken out ATE insurance. On 1st April, the law changed, and it was only possible to recover the costs of the policy from the other side if they had been notified prior to this date.
No notice could be found, so a year later, the Appellant created a backdated letter and form of notice, sent it to the other side, and relied on it during settlement negotiations.
The SRA strangely decided that the creation of the letter and backdated notice only showed a lack of integrity, not dishonesty. However, the body ruled the reliance upon the documents did amount to dishonesty.
Justice Mostyn stated that as an argument, this was “intellectually virtually impossible to understand.”
He went on to rule that the terms dishonesty and lack of integrity were synonymous.
“This would explain why the SRA principles do not additionally require a solicitor to act with honesty. This is because it is the same thing as integrity. Want of integrity and dishonesty are not only the same thing but must be proved to the same standard, in my judgment.”
He went on to say that despite “repeated assertions to the contrary” by the SRA, Mr. Malins was facing charges of dishonesty in all allegations.
“It is elementary and supported by abundant authority, that if you are accused of dishonesty then that must be spelt out against you with pitiless clarity.
“In my judgment, you cannot circumvent this obligation by pleading the same facts and matters as a want of integrity. We do not have in our system dishonesty in the first degree and dishonesty in the second degree.”
In addition, the SDT did not adequately consider medical and character references which showed Mr. Malins was suffering from serious depression at the time of the offence.
The appeal was allowed, and the court ordered for Mr. Malins to be retried for dishonesty.
Williams v SRA [2017] EWHC 1478
In the very recent case of Williams v SRA, the High Court reverted away from the Malins decision, with Justice Carr, (supported by Sir Brian Leveson, President of the High Court), proceeding with his decision on the basis that lack of integrity and dishonesty are distinct in the field of solicitors’ regulations.
In powerful Obiter statements, the court seemed to suggest that Malins was wrongly decided.
Where are we now?
The SRA has applied for permission to appeal the Malins decision. If leave is granted, it is likely the Obiter statements in Williams will be very persuasive.
If one looks at the facts of Malins, it is easy to see why Justice Mostyn reached his controversial conclusion. He is right in concluding it is ludicrous to state that creating the backdated document in question was not a dishonest act, but relying on it was.
Rather than creating confusion regarding the terms ‘lack of integrity’ and ‘dishonesty,’ it appears the SDT did a poor job of putting together the case against Mr. Malins and considering the surrounding evidence before it. Dishonesty should have applied to all the charges from the beginning, and pleaded with sufficient particularity.
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