Solicitors Regulation Authority v Good
Claimants have come under scrutiny in recent times regarding fundamental dishonesty and there has been an increase in questioning the honesty of Claimants by Defendants.
However, what we haven’t seen too much of is a questioning of Solicitors’ honesty and intentions. This is not surprising given the obligations and standards held by the Solicitors Regulation Authority (hereon in referred to as SRA) and the obligations Solicitors agree to when they are admitted to the Roll. However, in the case of Solicitors Regulation Authority v Good, the SRA Appealed a decision made by the Solicitors Disciplinary Tribunal as they didn’t believe that the sanction initially given was appropriate and didn’t reflect the severity of the Solicitor’s actions.
The Solicitors Disciplinary Tribunal found that the Defendant, the founder of a firm in Hull, was producing bills that were ‘unreasonable and disproportionate’. The SRA investigation began following a complaint by the NHS Litigation Authority regarding the firm’s charging. The Defendant set hourly rates of £400 per hour, with success fees of 100%, on all of his clinical negligence files as a matter of policy, without consideration for the merits of the case.
The Tribunal heard that on one Detailed Assessment, a District Judge had reduced a bill of costs by 91%. Whilst it is not uncommon for Claimants to have bills reduced by potentially significant amounts if there are unreasonable hourly rates claimed for the work undertaken along with potentially high success fees, to have a bill reduced by 91% is a staggering statistic. It is one that would, should and did lead to questions being asked regarding the Solicitor’s practices. The Tribunal found that the First Respondent had set the rate at an artificially high level in the knowledge that the clients would not object, so that he could maximise costs without regard for the need for those costs to be reasonable and proportionate.
It was found by the Tribunal that the Defendant acted without integrity, but the allegation of dishonesty was dismissed. The Defendant felt that he was entitled to ‘test the rate’ and that bills would be subject to assessment in any event, which the Tribunal found was a genuine belief. Whilst the “test the rate” argument may potentially have some mileage given Guideline Hourly rates have not been updated for 9 years there still has to be some common sense and reasonableness applied. Subsequently the Defendant was fined £30,000.00.
As a result of the penalty imposed the SRA launched an Appeal. It was the position of the SRA that the original decision and indeed the process in how the decision was achieved was defective, deficient and insufficient. In opting not to strike the Defendant off, they believed the Solicitors Disciplinary Tribunal had failed to appreciate the extent of the misconduct and the fundamental need to protect the reputation of the profession.
Lord Justice Flaux said the Solicitors Disciplinary Tribunal should have found that the Defendant acted dishonestly and overlooked the serious findings of knowledge and deliberate misconduct which it had made earlier in its Judgment. Instead it had imposed a ‘clearly inappropriate’ fine of £30,000. In his Judgment, the tribunal’s analysis was ‘fundamentally flawed’ and he was satisfied there were a number of errors of principle in its decision.
Lord Justice Flaux found that the tribunal’s evaluation was a “miscalibration” of the seriousness of the misconduct and downplayed significantly its seriousness, given the Defendant was found to have deliberately set artificially high rates as part of a planned policy to seek inflated costs.
He went on to say that the only proper conclusion would have been that, in rendering the bills which he knew to be excessive and artificially high (a finding that was not challenged by the Defendant on appeal), the Defendant was dishonest in the first place. Quite a damning assessment, but one that was welcomed by the SRA.
It was clear in Flaux LJ’s assessment of matters he did not consider that the public would regard it as acceptable that someone who breached that trust in the way in which the Defendant had should be allowed to act as a Solicitor.
The tribunal order was subsequently unsurprisingly quashed and substituted for a sanction that the Defendant be struck off.
In light of this decision and the recent Court of Appeal Judgment in Herbert v HH Law it is important that Solicitors assess the merits of all of their cases appropriately and transparently.
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