If you have been investigated by the SRA and the matter has been referred to the Solicitors Disciplinary Tribunal (SDT) it is imperative that you instruct an experienced SRA and SDT defence solicitor. This is because the SDT can issue significant penalties such as unlimited fines or, in the case of dishonesty offences, strike you off the Roll. In almost all cases, it is best to obtain professional advice during the SRA investigation at the earliest possible opportunity to ensure a robust defence is advanced well before the case reaches the SDT.
When can the SRA issue proceedings in the SDT?
If a case is referred to the SDT it does not mean non-compliance has been found. The Tribunal will consider the evidence presented by the SRA and the Respondent and decide whether the latter breached their regulatory compliance obligations.
The SRA can issue proceedings in the Solicitors Disciplinary Tribunal if they are satisfied that:
- there is a realistic prospect of the Tribunal making an order in respect of the allegation(s); and
- it is in the public interest to make the application.
To make an order the Tribunal will need to consider whether:
- the conduct breaches SRA Standards and Regulations;
- on the balance of probabilities, the evidence proves the conduct alleged; and
- the conduct is serious enough for the Tribunal to make an order.
In deciding whether there is a realistic prospect of the SDT making an order against the Respondent, the SRA will make an objective decision as to whether an impartial and reasonable Tribunal would find against the Respondent should it be presented with the SRA’s evidence.
If it is established that there is a realistic prospect of the SDT making an order, the Regulator must decide whether it is in the public interest to refer the case. For example, if the person being regulated has serious physical and/or mental health issues that may be exacerbated by a hearing, the Regulator may decide it is not in the public interest to refer the case to the Tribunal.
Should I attend an SDT hearing?
You can attend an SDT hearing in person or be represented by a solicitor or barrister. It is vital that you attend, a fact that was illustrated in Faniyi v Solicitors Regulation Authority  EWHC 2965 (Admin) where in the absence of the Respondent, the Tribunal continued with proceedings, which resulted in the absent solicitor being struck off and ordered to pay £28,000 in costs.
On appeal, Mr Justice Foskett said in Faniyi:
“The evidence the appellant had known about the first hearing and had been running shy of the whole process, hoping to delay it for as long as possible, was, to my mind, overwhelming.”
“Leveson J, as he then was, put the matter pithily in Elliott (R on the application of) v Solicitors Disciplinary Tribunal & another  EWHC 1176 (Admin) when he said this: “Those who fail to attend lose the right to participate and explain, and they do so at their peril. As [was] conceded, if, without more, a solicitor deliberately absented himself it would not be feasible to argue that he was entitled to a re-hearing.” I respectfully agree with that approach.”
The Rules at the time of the case relating to the power to proceed with a hearing in the Respondent’s absence was conferred by Rule 16(2) of the Solicitors (Disciplinary Procedure) Rules 2007, which stated:
“If the tribunal is satisfied that notice of the hearing was served on the respondent in accordance with these Rules, the Tribunal shall have power to hear and determine an application notwithstanding that the Respondent fails to attend in person or is not represented at the hearing.”
For cases issued after 25 November 2019, the position is covered by Rule 36, of The Solicitors (Disciplinary Proceedings) Rules 2019.
How are costs dealt with in the SDT?
Rule 43 of The Solicitors (Disciplinary Proceedings) Rules 2019 provides that the SDT may at any stage in the proceedings make such an order as to costs as it thinks fit, which may include an order for wasted costs. The SDT must consider all relevant matters when deciding whether to make a costs order, the party the order should be made against, and for what amount, including:
- the conduct of the parties and whether any or all of the allegations were pursued or defended reasonably;
- whether the Tribunal’s directions and time limits imposed were complied with;
- whether the amount of time spent on the matter was proportionate and reasonable;
- whether an hourly rate and the amount of disbursements claimed is proportionate and reasonable;
- the paying party’s means.
It can prove challenging to recoup costs from the SRA. Even if the Regulator’s case fails, the Tribunal can make an adverse costs order based on the Respondent’s conduct, for example, they did not co-operate with the investigation or respond to the SRA’s enquiries (see for example Broomhead v SRA  EWHC 2772 and SRA v Libby  EWHC 973 (Admin).
The recent decision in Beckwith v SRA  EWHC 3231 (Admin) is positive for Respondents seeking to challenge an SRA cost application in SDT proceedings. Here, the SRA claimed costs of £343,957 after the SDT found Mr Beckwith had breached Principles 2 and 6 on the SRA’s Code of Conduct 2011. The Tribunal ordered Mr Beckwith to pay £200,000 towards the Regulator’s costs. However, on appeal to the High Court, the SDT’s costs order was set aside. The High Court ruled that all Regulators had a responsibility to ensure costs are proportionate “[s]ince the SRA will not in the ordinary course, be required to pay costs when regulatory proceedings are successfully defended (see the judgment of the Court of Appeal in Baxendale-Walker v Law Society  1 WLR 426), it must conduct its cases with proper regard to the need to permit persons who face regulatory complaints to defend themselves without excessive cost. This is part of any regulator’s responsibilities in the public interest.” Furthermore, the SDT was found to have not provided clear and proper reasons for the cost order.
Although the decision in Beckwith shows a shift in favour of Respondents in relation to SDT cost orders, it is unknown whether the trend will continue. Therefore, it is crucial to obtain the advice and representation of an experienced SRA and SDT defence solicitor in the early stages of an investigation.
The Court of Appeal in CMA v Flynn Pharma Limited, Pfizer LNC and others  EWCH Civ 617, may be relevant to an application on the part of a successful Respondent to recover costs in proceedings before the SDT. Lord Justice Lewison, delivering the lead judgment, and having reviewed the authorities, said, amongst other things, “…the starting point or default position is that no order for costs should be made against a regulator who has brought or defended proceedings in the CAT acting purely in its regulatory capacity”, which “may be departed from for good reason”, and which may be, by way of example, “unreasonable conduct on the part of the regulator, or substantial financial hardship”. The Court derived six principles from the relevant authorities, namely:
1. the fact that one of the parties is a regulator exercising functions in the public interest is an important factor in exercising discretion as to costs;
2. the default position is that no order for costs should be made against a regulator acting purely in its regulatory capacity;
3. the default position may be departed from for good reason;
4. a regulator merely being unsuccessful is not sufficient, but it is not necessary to find ‘exceptional circumstances’;
5. good reason will include unreasonable conduct by the regulator, or the likelihood of the successful parties suffering substantial financial hardship;
6. there may be additional factors specific to the particular case which may permit a departure from the starting point.
Such arguments will be determined by reference to the facts of each case and may provide grounds for persuasive arguments to be advanced on the part of a successful Respondent to recover costs.
Subject to the facts and circumstances of any particular case, there may be scope to persuade the SRA against taking any further action or, in the event of a referral to the SDT, negotiate an Agreed Outcome with the SRA, subject to the approval of the SDT, avoiding the need to attend a formal hearing.
We have been helping solicitors and other legal professionals with disciplinary and regulatory advice for 25 years. If you have any questions relating to an SRA investigation or an SDT appearance, please call us on 0151 909 2380 or complete our Free Online Enquiry.