Malins v Solicitors Regulation Authority
| Jurisdiction | England & Wales |
| Judge | Mr Justice Mostyn |
| Judgment Date | 12 April 2017 |
| Neutral Citation | [2017] EWHC 835 (Admin) |
| Docket Number | Case No: CO/3223/2016 |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 12 April 2017 |
[2017] EWHC 835 (Admin)
Mr Justice Mostyn
Case No: CO/3223/2016
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Fenella Morris QC (instructed by RadcliffesLeBrasseur) for the Applicant
Geoffrey Williams, QC (instructed by SRA) for the Respondent
Hearing date: 4 April 2017
The appellant was admitted as a solicitor in 2001. He came to specialise in construction law. He enjoyed an unblemished career. Prior to 1 May 2013 he was a partner in Bond Pearce LLP. On that date Bond Pearce merged with Dickinson Dees and became Bond Dickinson LLP. Following the merger, the appellant became a partner in the new firm. On 21 April 2016, the Solicitors Disciplinary Tribunal ("SDT") found the appellant guilty of dishonesty and of acting without integrity and struck him off the roll. This is my judgment on the appellant's appeal against that decision. It is agreed that this judgment will be confined only to the appeal against conviction. If it fails, then his appeal against sentence will be considered later.
In early 2012 the appellant started acting for a new client, Stephen Shirley, concerning a dispute about building works at Mr Shirley's family home in Kent. Mr Shirley wished to make a claim against a company called STMC which had supervised those works. STMC instructed Hill Dickinson. From early 2012 the appellant corresponded with Hill Dickinson to see if the dispute could be resolved without the need for litigation. However, it was clear that if the matter did become litigious that Mr Shirley would need third-party funding and after the event ("ATE") insurance cover against adverse costs liability. There is no dispute that the appellant told Hill Dickinson in November 2012 that ATE insurance would be taken out if the case was not settled.
On 1 May 2012, the Legal Aid, Sentencing and Punishment of Offenders Act 2012 received Royal Assent. Section 46 provided that a costs order made in favour of a party to proceedings who has taken out an ATE policy may not include provision requiring the payment of an amount in respect of all or part of the premium of the policy. By the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (Commencement No. 5 and Saving Provision) Order 2013 (S.I. 2013 No. 77), made on 18 January 2013, this section was to come into force on 1 April 2013. Thus, the cost of such premiums in respect of ATE policies taken out after 1 April 2013 would no longer be recoverable in a costs order. But, if the policy had been taken out before 1 April 2013 then by virtue of section 46(3) the premium cost of an ATE policy would remain recoverable. However, under the terms of the (pre-1 April 2013) CPR PD 44 para 19.3(a) and (b) and (pre-1 April 2013) CPR 44.3B(1)(c) the premium cost would only be recoverable provided that a notice in Form N251 had been served on the other party and had been filed with the court. If the notice had not been filed with the court before 1 April 2013 then on an application for relief from sanctions there would be scope for the court to treat a late filing as having been made in time. However, if the notice was not served on the other side then that would be a fatal omission. In such a circumstance the premium cost could not be recovered in a costs order.
On 13 March 2013 Mr Shirley received an offer for ATE insurance cover for a costs liability up to £421,682.94 for which a premium of £181,682.04 was payable. On 19 March 2013 Mr Shirley accepted the offer in writing, and later (although I do not know when) paid the premium.
The appellant's case was that he was positive that he had sent a copy of the form N251 to his opponent on 19 March 2013. It is not his case that he believed that the form was filed by him at court. His case is that he believed that his assistant Mr Tucker had done so. As explained above that latter omission would not necessarily have been fatal; in contrast, had the appellant failed to send a copy of the form to his opponent before 1 April 2013 then the premium cost could not have been recovered from the other side in a costs order.
1 April 2013 came and went. In May 2013 a claim form was issued. As the case progressed the appellant periodically mentioned to his opponent the existence of the ATE cover for tactical reasons. The case developed normally with pleadings, disclosure and witness statements. A mediation was fixed for January 2014. At the mediation Mr Cooper of Hill Dickinson mentioned for the first time that notice of ATE cover had never been received by him. The appellant was not unduly concerned by this, he says, because he was sure that he had sent it. A Part 36 offer was made by the defendant which was accepted by Mr Shirley on 14 March 2014. That carried with it an entitlement to costs. As explained above, if Form N251 had not been sent to Hill Dickinson before 1 April 2013 then the premium cost would not be recoverable. The appellant was told by his assistant Mr Tucker that he had forgotten to file the Form N251 at court.
Following these revelations, the appellant hunted high and low to see if he could find the Form N251 and the covering letter that he was sure he had sent to Hill Dickinson on 19 March 2013. He could not find them. He says that following the merger some files referable to the case, both in hard and soft copy, had gone missing. He asked Mr Cooper's superior at Hill Dickinson, Mrs Grant, whether she would check her files to see if the form and the covering letter were there. There were a number of conversations between the appellant and Mrs Grant about the missing form. Mrs Grant agreed to check her files. However, it became clear to the appellant that Mrs Grant was too busy to attend to this assiduously.
On 2 May 2014, the appellant commenced the course of conduct which led to him being struck off.
At 11:40 on that day the appellant downloaded onto his workstation a blank, but fillable, Laserform template of Form N251. He did not work on it at that time – it was only open for a matter of seconds. At 11:52 he opened an old Bond Pearce letter (I remind myself that the firm merged with Dickinson Dees and became Bond Dickinson on 1 May 2013). He modified this old Bond Pearce letter over a 14 minute period ending at 11:57. During that period he printed it three times. What he was doing was to create a letter dated 19 March 2013 addressed to Hill Dickinson which stated the following:
"Dear Sirs,
Stephen Shirley v STMC
Please find enclosed a notice of funding confirming the details of the ATE insurance that has been taken out in respect of our client's claim.
A copy of the notice will be filed at court in due course, as necessary.
Yours faithfully
Bond Pearce LLP"
At 16:25 the appellant returned to the document and finalised it over the course of a minute. He then printed it.
He then turned at 16:26 to the downloaded Form N251. He worked on this for just under five minutes. The boxes that were filled in merely gave details of the policy which was issued on 13 March 2013. That was then printed.
The appellant then signed the printed copy of the letter and signed and dated the printed copy of the form N251. The signed documents were then scanned and converted into PDF format. That must have taken a few minutes.
The appellant then at 16:40, that is to say 14 minutes after the documents were printed (and, one assumes, perhaps seven or eight minutes after they had been scanned) sent an email, attaching the two PDFs, to Sarah Grant in these terms:
"Without prejudice
Sarah,
Further to our conversation earlier this week, I attach a copy of our correspondence last year with notice of funding.
The other point which we should have made clear in our last letter is that our client is also entitled to interest on their costs, but this has been waived for the purposes of their settlement offer.
I know you are away until 8 May, but can we speak by the end of next week to confirm whether your client accepts our client's offer in relation to costs.
Regards
John"
Hill Dickinson maintained the position that the Form N251 had not been filed and so the premium cost was not recoverable. They made a Calderbank offer in respect of costs which did not include the premium cost.
On 21 July 2014, the appellant wrote a letter, which he accepts that he signed, which made a counter-offer. In that letter it was stated:
"In respect of the ATE premium our client maintains they are entitled to the full payment of the ATE premium in the sum of £181,682.94. The form N251 was sent to your firm as we have evidenced. Further, the funding arrangements for the case were discussed with your firm throughout the progress of the litigation. Therefore, we maintain that you and your client should have been well aware of the ATE insurance in place for this case"
By this stage the matter had been passed to the costs team. On 14 August 2014 a letter was sent to Hill Dickinson. It was drafted by the costs team, but under the appellant's reference and email address. It stated:
"There is still the outstanding issue of the ATE premium paid by our client in relation to this claim and which forms part of our client's costs of the claim. We understand that your argument to justify not paying the full ATE premium is that you consider that you were not properly notified of our client's funding arrangements. We maintain that this is fundamentally incorrect for the reasons set out below.
• Primarily, you were notified by way of Form N251 of the existence of ATE insurance in compliance with court rules. The form was sent you on 19 March 2013. A copy of the letter and notice is (sic) funding is attached. We cannot see that this is anything other than proper...
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