Bryant and another v The Law Society [2007] EWHC 3043 (Admin), [2007] All ER (D) 379 (Dec)
Quen's Bench Division, Divisional Court
Richards LJ and Aikens J
Gregory Treverton-Jones QC (instructed by Radcliffes Le Brasseur) for the appellants. Geoffrey Williams QC and Jonathan Goodwin (instructed by Lonsdales) for the society.
The Solicitors’ Disciplinary Tribunal (the tribunal) has to ask two questions when deciding the issue of dishonesty: (i) whether the solicitor has acted dishonestly by the ordinary standards of reasonable and honest people; and (ii) whether he was aware at the material time that by those standards he was acting dishonestly.
The appellants were both solicitors, who had practised in partnership together in . The respondent Law Society brought disciplinary proceedings against them relating to certain transactions in a period between September 2002 and December 2004. The tribunal subsequently found the charges largely substantiated. The tribunal also made a finding of dishonesty in respect of the first appellant, although he had strongly denied the allegation, and ordered him to be struck off the roll of solicitors. In reaching that conclusion, the tribunal referred to the test for dishonesty laid down in Twinsectra Ltd v Yardley and others [2002] UKHL 12, [2002] 2 All ER 377. It ruled that:
“No honest and competent solicitor would have ignored the many warning signs that the exemplified transactions were highly suspect ... [the first appellant’s] conduct was so far beyond the standards to be expected of an honest and competent solicitor as to justify condemnation and it must not shrink from that conclusion that by the standards laid down for the profession it amounted to dishonesty.”
The tribunal did not doubt the first appellant’s own strong belief in his honesty, and it did not suggest that he believed that his conduct was dishonest by the ordinary standards of the profession. Nor did it reject his clear evidence that he believed that the relevant transactions were entirely legitimate. It found the second appellant’s involvement to have been more limited and not dishonest. It ordered him to be suspended for three years.
The appellants appealed against both the findings against them and the sentences imposed. The issue arose on the first appellant’s appeal as to whether the tribunal had applied the correct legal test for a finding of dishonesty in proceedings. He contended that the tribunal had erred in applying a purely objective test and finding him guilty of dishonesty notwithstanding that, on the evidence accepted by the tribunal, his state of mind was not dishonest.
LORD JUSTICE RICHARDS:
His lordship considered: Barlow Clowes International Ltd (in liq) v Eurotrust International Ltd
[2005] UKPC 37, [2005] All ER (D) 99 (Oct); Bultitude v Law Society [2004] All ER (D) 252 (Dec); Royal Brunei Airlines Sdn Bhd v Tan [1995] 3 All ER 97; R v Ghosh h [1982] 2 All ER 689; and Twinsectra Ltd v Yardley [2002] UKHL 12, [2002] 2 All ER 377. The decision of the Court of Appeal in Bultitudee stood as binding authority that the test to be applied in the context of solicitors’ disciplinary proceedings was the Twinsectra test as it was widely understood before Barlow Clowes, that was a test that included the separate subjective element. The fact that the Privy Council in Barlow Clowes had subsequently placed a different interpretation on Twinsectra for the purposes of the accessory liability principle did not alter the substance of the test accepted in Bultitude and did not call for any departure from that test.
In any event there were strong reasons for adopting such a test in the disciplinary context and for declining to follow in that context the approach in Barlow Clowes. The test corresponded closely to that laid down in the criminal context by R v Ghosh; and it was more appropriate that the test for dishonesty in the context of solicitors’ disciplinary proceedings should be aligned with the criminal test than with the test for determining civil liability for assisting in a breach of a trust.
It was true that disciplinary proceedings were not themselves criminal in character and that they might involve issues of dishonesty that could not give rise to any criminal liability (for example, lying to a client as to whether a step had been taken on his behalf). But the tribunal’s finding of dishonesty against a solicitor was likely to have extremely serious consequences for him both professionally—it would normally lead to an order striking him off—and personally. It was just as appropriate to require a finding that the defendant had a subjectively dishonest state of mind in that context, as the court in R v Ghosh considered it to be in the criminal context.
The majority of their lordships in Twinsectra appeared at that time to consider that the gravity of a finding of dishonesty should lead to the same approach even in the context of civil liability as an accessory to a breach of trust. The fact that their lordships in Barlow Clowes had now taken a different view of the matter in that context did not provide a good reason for moving to the Barlow Clowes approach in the disciplinary context.
Two questions
Accordingly, the tribunal in this case should have asked itself two questions when deciding the issue of dishonesty: first, whether the first appellant had acted dishonestly by the ordinary standards of reasonable and honest people; and, second, whether he had been aware that by those standards he was acting dishonestly.
There was nothing to show that the tribunal asked itself the second of those questions. At no point did it articulate with any clarity the test that it was applying, and the test applied could not be derived from the authorities cited, since the passages selected for quotation did not lay down any single test. Most pertinently, although the tribunal found that the first appellant had acted dishonesty by the standards of an honest and competent solicitor, it did not make any finding or even any suggestion that the first appellant was aware that by those standards he was acting dishonestly.
It followed that the tribunal’s finding of dishonesty was vitiated by a serious legal error. His lordship then disposed of the appeals on their facts.
