The Solicitors Regulation Authority v lawyers behaving badly

Within the space of a month, the High Court has issued conflicting decisions on whether a solicitor’s lack of integrity shows dishonesty. The Solicitors Regulation Authority (the SRA) is reported to be considering an appeal of the latest case,which would give the Court of Appeal a welcome opportunity to clarify the inter-relationship of dishonesty and integrity.

The case of Malins v SRA [2017] EWHC 835 (Admin) involved a solicitor struck off in April 2016 by the Solicitors Disciplinary Tribunal (the SDT). The High Court ruled the charges against the solicitor were “contaminated” and the SDT’s findings “flawed.” The SDT found the solicitor guilty of serious dishonesty on two charges where dishonesty was not in fact alleged. The High Court has ordered a retrial on the sole allegation of dishonesty.

Background of the case

The solicitor produced an insurance form in May 2014, which he had backdated to March 2013 before sending it to another firm referencing the previous date. The backdating ensured his client would recover a six-figure after-the-event insurance payout. The solicitor admitted wrongdoing to the SRA and was subsequently charged on four counts.

The first two counts related to the creation of the backdated insurance form and letter, accusing the solicitor of a lack of integrity but not dishonesty. However, in relation to these charges, the SDT found the solicitor guilty of serious dishonesty, even though he was accused of lack of integrity.

The High Court judgment

Mr. Justice Mostyn found the SRA’s distinction between lack of integrity and dishonesty “intellectually virtually impossible to understand” and a “confusion.”The Tribunal process was held to be “flawed” as the solicitor found himself defending allegations of a different charge, which had never been properly spelled out against him.

Additionally, the judge was critical of the SDT’s “seriously inadequate” analysis of the solicitor’s character and consideration of the medical evidence, showing that the solicitor was suffering from serious depression at the time of the alleged charges. The judge stated that such evidence must be treated with “proper respect and fair analysis.”

In contrast with previous High Court decisions, Mostyn J found that the concepts of dishonesty and lack of integrity are the same. Reference was made to the “legal and dictionary definitions of the words honesty and integrity being aligned and… are synonyms. It means that dishonesty and integrity are antonyms.” He went on to say, “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. Lack of integrity and dishonesty are not only the same thing but must be proved to the same standard, in my judgment.”

Honesty and integrity – not always equal?

Mostyn J’s judgment in Malins casts doubt on the previous judgment of Mr Justice Morris in Newell-Austin v SRA [2017] EWHC 411 (Admin), in which it was found that a lack of integrity on the part of a solicitor is “not synonymous” with dishonesty and is subject to a less stringent legal test.

This case involved a solicitor looking to cease her practice but not being able to afford the run-off cover. The SDT found that the solicitor had effectively ceded control of her firm to non-admitted members of staff recruited in an unorthodox way and by doing so had acquiesced in the firm’s involvement in fraudulent conveyancing transactions. The SDT found her actions showed alack of integrity, contrary to principle 2 of the SRA principles, but not dishonesty, as the subjective element of the test was not satisfied. The solicitor’s appeal focused on the question of whether the same legal test should be applied to a finding of lack of integrity as for dishonesty.

Morris J’s opinion is that honesty and integrity are not equal: “it is clear that, by contrast with the test of dishonesty, the test of “lack of integrity” is an objective test alone. A distinction must be drawn between subjective knowledge of the facts of the underlying conduct (which are alleged to give rise to the lack of integrity) and subjectiveknowledge of the fact that the conduct would be regarded by reasonable people as lacking in integrity.”

The test for dishonesty

Case law has settled the test for solicitor’s dishonesty. Known as the Twinsectra Test, the SDT must establish two limbs:

1. the respondent’s conduct was dishonest by the ordinary standards of reasonable and honest people (the objective test); and

2. the respondent realised that by those standards, his conduct was dishonest (the subjective test)

When applying the Twinsectra Test, the proof is a criminal standard so the SDT must be satisfied it is sure that the respondent has acted dishonestly.

In contrast, Morris J found that the test for lack of integrity is purely an objective one and there is no requirement for the respondent to realise that his or her conduct was dishonest.

The lesser of two evils?

The Malins case has further muddied the waters on the legal test to be applied in cases of lack of integrity and whether this is synonymous with dishonesty. What the Malins case has done, however, is make it clear that the SRA cannot bring a charge of lack of integrity, in an attempt to side-step the requirement of the more onerous subjective test, bolsteringthe lack of integrity accusation to dishonesty. Until the position is clarified on appeal with a decision on which two of these approaches will be preferred, contradictory judgments will remain.

Jonathan Goodwin has over 20 years’ experience in regulatory and professional disciplinary law relating to solicitors. I am a solicitor advocate and regarded as an expert in this area of law. Please call me on 0151 909 2380 for a confidential no obligation discussion.

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