PS and Others v Law Society; Simms v Law Society
| Jurisdiction | England & Wales |
| Judge | Lord Justice Carnwath,Lord Justice Sedley,Lord Justice Auld |
| Judgment Date | 12 July 2005 |
| Neutral Citation | [2005] EWCA Civ 849 |
| Docket Number | Case No: A3/2004/1657 |
| Court | Court of Appeal (Civil Division) |
| Date | 12 July 2005 |
[2005] EWCA Civ 849
Lord Justice Auld
Lord Justice Sedley and
Lord Justice Carnwath
Case No: A3/2004/1657
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CHANCERY DIVISION
Evans-Lombe J
Royal Courts of Justice
Strand, London, WC2A 2LL
The Appellant, Paul Francis Simms, appeared in person
Timothy Dutton QC (instructed by Russell-Cooke) for the Respondent.
Background
This is an appeal against the decision of Evans-Lombe J dated 16th July 2004. The case concerns intervention proceedings brought by the Law Society against Mr Simms, commenced by notice dated 14 th February 2002. Mr Simms applied to the High Court challenging the intervention, and substantial witness statements were exchanged. However, following the commencement in September 2002 of disciplinary proceedings, it was agreed that the High Court proceedings should await the determination of the disciplinary proceedings. That agreement was embodied in a consent order by Lloyd J dated 22 nd November 2002. The Solicitor's Disciplinary Tribunal (SDT) gave its decision on 2 nd February 2004, upholding most of the charges. Mr Simms appealed against that decision to the Divisional Court.
Following the SDT decision, and before the hearing of the appeal, the Law Society applied for summary judgment in the High Court proceedings. Evans-Lombe J allowed that application, awarded costs in favour of the Law Society on the indemnity basis, and made an order for an interim payment of £150,000. Mr Simms applied for permission to appeal on the grounds (inter alia) that the judge should have awaited the final conclusion of the disciplinary proceedings, and that in any event his decisions on costs were unjustified. I gave permission to appeal on those grounds on 5 th August 2004. On 17 th March 2005 (a few days before the hearing of this appeal), the Divisional Court gave judgment unanimously upholding the decision of the SDT.
The legal framework
The intervention powers of the Law Society are conferred by Schedule 1 of the Solicitors Act 1974. The Society may intervene if it has "reason to suspect dishonesty" on the part of a solicitor (para 1(i)(a)). The powers available following intervention include the power to vest practice monies of the solicitor in the Society (para 6), and to require delivery up of practice documents to the Society (para 9). The intervention has the effect of suspending the Practising Certificate of the solicitor (section 15(1)(A)).
A solicitor who is served with a notice of intervention has a right to challenge it by applying to the Court within 8 days for an order directing the withdrawal of the intervention notice (para 6(4)). The application is made by a Part 8 claim. If the Court makes such an order, it may make "such other order with respect to the matter as it thinks fit" (see para 6(5)). At the hearing of the application the Court may have regard, not only to the material before the Society at the date of the intervention, but to any other relevant material before the Court ( Buckley v The Law Society No 2 [1984] 1 WLR 1101). The Court conducts a "two-stage" process:
"First it must decide whether the grounds under paragraph 1 are made out; in this case, primarily whether there are grounds for suspecting dishonesty. Secondly, if the Court is so satisfied, then it must consider whether in the light of all the evidence before it the intervention should continue. In deciding the second question, the Court must carry out a balancing exercise between the need in the public interest to protect the public from dishonest solicitors and the inevitably very serious consequences if the intervention continues." ( Holder v the Law Society 2003 1 WLR 1059, 1065, quoting Neuberger J in Dooley v the Law Society (unreported) 15 th September 2000)
The course of the proceedings
The Society's interest in the activities of the practice dates from 1998. The judge summarised the background to the intervention:
"… in September 1998 the Law Society, through the Office for the Supervision of Solicitors ("the OSS") mounted an inspection of the Bower Cotton Solicitors, the predecessor firm to the Bower Cotton Partnership ("the BCP"). On the 25 th February 1999, the OSS produced a report on this inspection, the decision was taken by the Law Society to take no further action, although further inspections were undertaken and assurance sought from the partners. In March 1999 representatives of the Law Society had a meeting with the partners of BCP at which advice was given that BCP should cease to permit its client account to be used in the furtherance of clients' transactions in financial instruments in order to protect the partners from the suggestion that the partnership was assisting in money laundering transactions. On the 22 nd April the partners in BCP wrote to the Law Society indicating that they would cease to act for clients promoting investment schemes and make their client account available for use by those clients for that purpose. Further inspections of the practice took place in 1999, 2000 & 2001 the last visit to the practice being on the 2 nd July 2001. Those inspections were not satisfactory so far as the Law Society was concerned and on the 14 th February 2002 the council of the Law Society through the Professional Regulation Adjudication Panel ("the Panel") of the OSS, to which its powers for the purpose had be delegated, passed a resolution to intervene in the practice of Mr Simms. On the 18 th February notice of the resolution was given the second to sixth Claimants and personally to Mr Simms on the 19 th February…
At the same time the claimants were provided with a copy of the report of Mrs Norton into the operations of BCP, and in particular Mr Simms, for the OSS upon the basis of which the decision to intervene in Mr Simms practice had been taken. On the 19 th February officials of the Law Society visited the office of BCP to take possession, inter alia, of clients money and client files held at their offices. On the 22 nd February the key documents referred to in the Norton report were delivered to the claimants…"
The present proceedings were commenced on 27 th February 2002 by Mr Simms, together with his five partners (claimants 2 to 6). The claim form asserted that the Law Society had acted outside its powers and unlawfully, and that the Law Society had no grounds to suspect dishonesty on the part of Mr Simms. The principal supporting evidence was an 81 page witness statement by Mr Simms, which challenged Mrs Norton's report in strong terms, accusing her of misleading statements, and misunderstanding of the nature of the transactions, which were said to be genuine project finance transactions. On 13 th March 2002, Lloyd J gave directions for exchange of evidence, with the hearing fixed for a week on the first available hearing date after 10 th May 2002. The Society's principal evidence was served, after extensions of time, consisted of substantial statements by Mrs Norton and John Gould (of Russell-Cooke, the Law Society's solicitors). Mr Gould's statement, with voluminous exhibits, reported the results of his lengthy investigation of the files obtained from Mr Simms. He concluded:
"The matters detailed in this statement and in the exhibited notes arising from Mr Simms' files give rise to a well-founded suspicion of dishonesty. Apart from the very numerous individual examples of conduct in which no honest solicitor would engage, an honest solicitor would have declined to act at all in relation to many of the transactions with which I have dealt."
In his response, dated 12 th June, Mr Simms took issue with this evidence. However, he accepted that it would not be sensible to seek to resolve the dispute in the context of the High Court proceedings, and that disciplinary proceedings were now inevitable. He proposed that the High Court proceedings should be stayed while the Society instituted such proceedings. This was accepted by the Society, which agreed a timetable for commencement of disciplinary proceedings. It was against this background that Lloyd J made the consent order of 20 th November, already referred to. The preamble noted that, the parties having agreed a timetable for the disciplinary proceedings, the order was made –
"with the objective that this claim should not proceed until after the result of the disciplinary proceedings is known."
The order provided –
"(1) that this claim is to be listed for a Pre Trial Review on the first available date not earlier than 14 days after the final conclusion of the Disciplinary proceedings
(2) that the First Claimant and the Defendant are not required to take any further steps in preparation for the trial of this Claim in the meantime
(3) that there be liberty to apply…"
The Tribunal hearing took place between 17 th November and 5 th December 2003. The Law Society confined its case to 11 "core" transactions. 13 witnesses gave oral evidence, including Mr Simms, who by this time was representing himself. The Tribunal gave its decision with outline reasons on 2 nd February 2004, followed by a detailed statement of reasons on 16 th April 2004. It is unnecessary for present purposes to examine their findings in any detail. They are summarised and discussed in the recent judgment of the Divisional Court ([ [2002] EWHC (Admin) 408), in which their findings were upheld. The judge noted that five of the original charges involved allegations of dishonesty, of which all but one were upheld. He added:
"The SDT made specific findings of dishonesty...
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