Langford v The Law Society
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE ROSE,MR JUSTICE FULFORD |
| Judgment Date | 09 December 2002 |
| Neutral Citation | [2002] EWHC 2802 (Admin) |
| Court | Queen's Bench Division (Administrative Court) |
| Docket Number | CO/3282/02 |
| Date | 09 December 2002 |
[2002] EWHC 2802 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
DIVISIONAL COURT
Lord Justice Rose
(Vice President of the Court of Appeal, Criminal Division)
Mr Justice Fulford
CO/3282/02
In the Matter of a Solicitor
And in the Matter of the Solicitors Act 1974
MR C FOSTER (instructed by Hempsons, Hempsons Hse, 40 Villiers Street, London WC2N BNJ) appeared on behalf of the CLAIMANT
MR G WILLIAMS (Solicitor) (instructed by The Law Society) appeared on behalf of the DEFENDANT
The appellant appeals against a decision of the Solicitors' Disciplinary Tribunal whereby he was ordered to be struck off the Roll of Solicitors. The Tribunal heard the case against this appellant (and a number of others) over a period of three days, in March 2002. It gave written reasons for its findings on 20th June 2002. Before the Tribunal the appellant was represented by leading counsel.
The allegations against the appellant were that he had been guilty of conduct unbefitting a solicitor in a number of respects. First, drawing, or causing, or permitting to be drawn monies from a client account otherwise than in accordance with Rule 7 of the Solicitors' Accounts Rules 1991 and contrary to Rule 8 of those Rules; secondly, using client funds for his own purposes; thirdly, misapplying, or causing or permitting to be misapplied, monies held in client account, in the capacity of stakeholders, and acting improperly in conflict of interest situations. Furthermore, it was said that the appellant and others had failed to maintain properly written books of account, contrary to Rule 11 of the Solicitors' Accounts Rules of 1991. It is unnecessary for present purposes further to rehearse the details of the allegations against the appellant, all of which he admitted.
The findings of the Tribunal need, for present purposes, to be rehearsed in two parts: those in relation to the firm of which the appellant was, at the relevant time, an equity partner, and those relating to him personally. So far as the firm was concerned, the Tribunal found that all seven solicitors, who had been partners in the firm, and who included a man called Palmer, who was ultimately convicted of criminal offences, to which in a moment I shall return, had been guilty of conduct unbefitting a solicitor.
The Tribunal at page 73 paragraph 3 described the conduct of the firm and partners as "wholly shocking and disgraceful." What had happened, as the Tribunal found, was that, for a period of years in the mid 1990s, the firm had systematically used client money to finance the operations of the firm. In his submissions to this court today, Mr Foster, on behalf of the appellant, has accepted, as indeed he was bound to, that the firm would have gone under had it not been for the respite which this scheme permitted.
The first inspection, in April 1996, revealed something over half a million pounds of client funds had been used in the business. The report catalogued this as a "flagrant misuse of client funds and improper transfers." The Tribunal commented that when, in July 1996, the partners were confronted with this catalogue of events, they claimed ignorance of what breaches of the relevant Solicitors' Rules were involved. The Tribunal said that, while the system may have had an innocent beginning, limited to the simultaneous extraction from client account of monies expended immediately for disbursements, the system was allowed to develop so that the firm was effecting withdrawals from client accounts in relation to office account cheques not just for disbursements. The evidence showed that the partners in the firm, at the time responsible for the finance function (and it is to be noted that at the relevant time the appellant was a member of the finance committee) generally allowed the withdrawals from client account monies in an inappropriate manner. The Tribunal also pointed out that, within a month of affecting not to understand what breaches of the Rules were being committed, the partners, including the appellant, recognised their procedures were not in compliance with the Accounts Rules and expressed regret for inappropriate transfers and misuse of client funds.
Earnest assurances were given in 1996 that the breaches would not be repeated. The appellant was one of the partners who gave such assurance. As the Tribunal comments:
"The 'earnest assurance' was not fulfilled."
The second report, recording the position as at the end of June 1997, recorded significant and continuing misuse of clients funds, though the client account deficiency was somewhat reduced, being in the region of £150,000 to £230,000.
The partner, Palmer, to whom I have referred, was the major architect and operator of the scheme of improper client account transfers to finance the office account. But the Tribunal found that the other partners, including the appellant, did not take adequate steps either to stop the scheme or to control Palmer. Indeed, after Palmer had left in July 1997, improper transfers continued to take place.
The Tribunal commented on the fact that this appellant alone was the one to enter unqualified guilty pleas. (In relation, in particular, to the transfers in the case of Mr W, qualified pleas were entered by the other partners). It was submitted that the Tribunal could not find dishonesty against any of the partners because that had not been specifically charged. The Tribunal rejected that submission, and evidence was heard from all of the partners by the Tribunal.
The Tribunal said at page 75 that they did not:
"…accept that the [partners] can have been in any doubt whatsoever that the case they had to meet would concern issues relating to their individual probity and integrity, and to their personal individual knowledge of, and role in, the admitted impropriety…"
The Tribunal concluded that the appellant had, to the satisfaction of the Tribunal, beyond reasonable doubt, behaved with conscious and advertent impropriety.
So far as the specific allegations in relation to the appellant are concerned, as I have said, he alone pleaded guilty without qualification in relation to the matter of W. The appellant admitted in his evidence before the Tribunal that he had effected a transfer of £50,000 from client account in August 1995 because the money was needed for the practice. He admitted that he then took no steps to ensure the money was returned to client account but left the matter for Palmer and Mr Cowen (who was another of the partners) to sort out. The appellant denied dishonest intent but admitted in his evidence that he had consciously taken W's money out of the client account in breach of the Accounts Rules for the benefit of the firm, and had told no one outside the firm, nor did he do anything for the next 6 months to see that the money was replaced.
He also agreed in his evidence that he knew the firm was financed by the improper use of client money and, but for that, the firm would have collapsed. The Tribunal said they were impressed with the efforts made by the appellant, after the departure of Palmer, to restore the practices and procedures of the firm. But the fact was that he had admitted acting in conscious breach of the Accounts Rules, in relation to the improper transfer of W client monies, and had wholly failed to stop, control, report or rectify the effects of that improper use.
The Tribunal concluded that the combination of conscious impropriety and gross abstention in the performance of his duties was not the conduct to be expected of a solicitor with integrity. They, therefore, made the order for striking off the appellant's name from the Solicitors' Roll, to which at the outset I referred.
The submission which is made by Mr Foster, by way of challenge to that conclusion, is that striking off was excessively harsh, in the light of the delay which occurred in connection with the proceedings against the appellant, in breach, it is said, of his rights under Article 6 of the European Convention, and having regard to the nature of the appellant's misconduct, and his herculean efforts to put the firm back on its feet once Palmer had departed. Mr Foster submitted that it was naivety for which, in essence, the appellant was being punished. All these matters, he submits, did not give rise to the need to strike off the appellant. This court should substitute a short period of suspension.
Before examining the substance of these submissions, it is necessary to identify, briefly, the approach which this court should, as it seems to me, adopt to an appeal of this kind. The classic authority as to the approach of this court is Bolton v Law Society [1994] 1 WLR 512. (To a passage in the judgment of Sir Thomas Bingham (then Master of the Rolls), I will refer later in relation to the propriety or otherwise of striking off). As to the approach, in general, which this court should adopt, it is not contested to the contrary by Mr Williams, on behalf of the Law Society, that Mr Foster's submission,...
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