Tales from the Tribunal: 10 Takeaways for Lawyers from the Solicitors Disciplinary Tribunal’s 2020 Decisions
January 4, 2021
I have acted in a number of Solicitors Regulation Authority (SRA) investigations over the years and understood how stressful and time-consuming they are for both the firm and the individuals involved. While many investigations are brought to a conclusion by the SRA, the most serious cases are referred to the Solicitors Disciplinary Tribunal (SDT), an independent body with powers to fine, suspend and in certain circumstances, to strike Solicitors off the roll. In this article I look at some of the decisions made by the SDT in 2020 and set out ten key points lawyers can take from them.
1. A finding of dishonesty means that strike off is almost inevitable. Many of the Tribunal’s strike off decisions have involved financial impropriety, particularly the misuse of client funds, but the Tribunal’s decisions to strike off are not limited to cases of financial gain. Other strike offs in 2020 include the case of a solicitor who had changed dates on legal charges using Tippex. Despite his claims that he honestly believed his conduct was common practice, the Tribunal found he had failed to act with moral soundness, although it did acknowledge that he didn’t seem to understand the seriousness of what he had done. In another case a solicitor backdated a client’s form of authority in respect of a personal injury claim. He said he was trying to act in the best interests of the client. A newly qualified legal aid solicitor was struck off for backdating a funding form then trying to destroy evidence to conceal his mistake. But perhaps the most high-profile Tribunal decision this year is the striking off of Claire Matthews, a recently qualified solicitor who inadvertently left sensitive documents on a train then subsequently lied to colleagues in an attempt to cover up what had happened. It was those misrepresentations to her colleagues which led to a finding of dishonesty by the Tribunal and, despite the fact that no harm occurred and she made no gain from her actions, she was struck off.
2. Mental health conditions could mean the difference between a strike off and a suspension. One of the reasons why the Claire Matthews case attracted the attention is did is that the decision to strike her off was made despite the Tribunal hearing reports that she suffered from a long standing mental health condition. This case followed the pattern of other recent decisions in which junior solicitors have been struck off on grounds of dishonesty, despite the Tribunal hearing evidence of them working under extreme pressure in toxic environments. However, in a change to this pattern the SDT chose to suspend rather than strike off 2 year qualified solicitor Susan Orton despite a finding of dishonesty, deciding that the evidence of her mental health condition amounted to exceptional circumstances. Orton had removed and binned two copies of a hearing notification from a file after realising that she had missed a preliminary hearing at the Employment Tribunal. She was cleared of dishonesty in respect of that action but found to have been dishonest in a subsequent email to the Employment Tribunal and in a meeting with her superiors. Full reasons for the decision have not yet been published; however it is unlikely that this decision represents a U-turn in the position previously adopted by the SDT. In the Orton case the mistake was relatively trivial, it was a one off aberration rather than a course of conduct and her actions were reactive rather than proactive. Her practising certificate will be subject to conditions including regular health checks, and she was ordered to pay £20,000 in costs.
3. Come clean about mistakes. In both the Matthews and the Orton cases, the findings of dishonesty did not relate to the original mistake but to the attempts to cover them up. Catherine Limbart is another example of a solicitor whose career has been destroyed by an attempt to hide the truth from her employer. She had filled in a form on joining a new firm declaring that she had not been investigated by her SRA, when in fact she had been under investigation for 6 months. She was struck off.
4. A lawyer’s private life is not necessarily private. Ryan Beckwith, a former partner at Freshfields, was fined £35,000 by the SDT in 2019 after having spent the night with a junior colleague. The High Court overturned the SDT’s decision in November 2020, saying it had been wrong to find that he had acted without integrity. However, the case doesn’t mean that a consensual relationship between colleagues will never amount to a breach of standards as the court emphasised that Solicitors must not take unfair advantage of others, whether in a professional or personal capacity. On a similar note, what a lawyer posts on their personal social media may well come under the scrutiny of the SRA. In one case a junior lawyer who sent malicious Facebook messages to a woman was fined £10,000 by the Tribunal.
5. The #metoo campaign has led to a surge in the number of cases of alleged sexual misconduct reported to the SRA over the past couple of years. However, behaving inappropriately and using sexist or racist language won’t necessarily result in a strike off – though it may attract a hefty fine. In the case of Charkham, a male solicitor who repeatedly touched a female co-worker inappropriately and told racist jokes was fined £30,000 and ordered to pay the SRA’s costs of £21,000. In one of 2020’s more high-profile cases, Gary Senior, former London managing partner of Baker Mackenzie, was fined £55,000 for professional misconduct relating to his attempts to hug and kiss a junior fee earner in 2012. He was also ordered to pay £48,000 in costs. In the case of Khosla, a solicitor convicted of sexual assault following a drunken encounter on a night out was fined £17,500 but was allowed to continue in practice.
6. Take care over the use of non-disclosure agreements. It is two years since the SRA warned that NDAs should not be used to stop victims reporting sexual misconduct. Cases involving the use of NDAs are starting to come through the Tribunal, most notably the case of a magic circle lawyer in connection with an NDA drawn up for an ex-employee of Harvey Weinstein. Unusually, the Tribunal has ruled that any proceedings in that case will be heard in private.
7. Straying outside your area of practice could prove costly. In the case of Shrouder, a recently qualified criminal solicitor who worked on a clinical negligence claim outside her own practice area agreed to pay a fine of £12,500. Shrouder made no financial gain and it seems she was simply trying to help a client. She accepted responsibility and co-operated fully with the SRA, suggesting that in different circumstances the likely level of fine could be significantly higher.
8. Ensure your firm’s AML Policies and Procedures are robust and don’t be tempted to short cut anti-money laundering checks, even with familiar clients. An East London Solicitor was suspended indefinitely for failing to properly establish the identity of parties involved in a transaction. The Tribunal found he knew about anti-money laundering regulations but chose to fail to comply with them, and failed to ask any searching questions of parties paying or receiving funds into client account. In another case a Mayfair solicitor with a client base in Russia and Ukraine was suspended for 9 months for failing to have an appropriate anti-money laundering policy or firm wide risk assessment in place, apply enhanced due diligence measures or conduct ongoing monitoring. She told the SRA that she believed that was no risk assessment because the firm knew 99% of their clients as family or friends. Anti-money Laundering Regulation is a key priority area for the SRA and its programme of reviews of firms to assess the adequacy of their procedures is set to continue in 2021.
9. The carrying out of due diligence, and the recording of reasons for decisions made, play a vital role in enabling solicitors to defend allegations made by the SRA. In the case of Mountenay, a solicitor was subject to various allegations of wrongdoing in relation to his involvement in stamp duty land tax avoidance schemes, one of which turned out to be fraudulent. The SDT found that he had carried out reasonable due diligence into the schemes and their promoters, he had no reason to believe one of the schemes was bogus, he had weighed up the risks, scrutinised and analysed the schemes, and taken counsel’s advice to ensure compliance. He was cleared of all charges.
10. Finally, don’t be tempted to think that the SDT always sides with the SRA. In several cases this year, the SRA’s claims for costs have been reduced on grounds of being unduly excessive. The SRA has also come in for some heavy criticism by the SDT. In October, it was ordered to pay £40,000 costs to solicitor Jamil Ahmud on the grounds that the case had been brought improperly and unreasonably. The tribunal said the SRA acted with a ‘lack of diligence and transparency’ and fell below the standards expected of the solicitors it regulated.