Solicitors Regulation Authority v Andrew Mark Cyril Good
| Jurisdiction | England & Wales |
| Judge | Lord Justice Flaux,Mrs Justice Carr |
| Judgment Date | 02 April 2019 |
| Neutral Citation | [2019] EWHC 817 (Admin) |
| Court | Queen's Bench Division (Administrative Court) |
| Docket Number | Case No: CO/3859/2018 |
[2019] EWHC 817 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
DIVISIONAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Flaux
Mrs Justice Carr
Case No: CO/3859/2018
Mark Cunningham QC (instructed by Capsticks Solicitors LLP) for the Appellant
Paul Greaney QC and Nicholas de la Poer (instructed by Irwin Mitchell LLP) for the Respondent
Hearing date: 19 March 2019
Approved Judgment
Introduction
In this appeal under section 49 of the Solicitors Act 1974, the Solicitors Regulation Authority (“SRA”) appeals against the finding by the Solicitors Disciplinary Tribunal (“SDT”) in its judgment dated 10 September 2018 that the conduct of the respondent, Mr Good, was not dishonest. The SRA also contends that, in any event, the sanction imposed by the SDT of a £30,000 fine was excessively lenient and clearly inappropriate.
There was originally an appeal by the SRA against the finding by the SDT that allegations against another respondent solicitor employed by the same firm, Ms Park, were not proved. That appeal was settled by a Consent Order before the hearing of this appeal began, so that it is unnecessary to consider it further.
The factual background and the judgment of the SDT
There is no challenge by the SRA on this appeal to the findings of fact of the SDT, so that the factual background can be taken from the judgment. The respondent, Mr Good, was admitted to the Roll as a solicitor in 1998. He founded Rapid Response (“the Firm”) in 2003. The Firm converted to a Legal Disciplinary Practice in 2009 and became a limited company in March 2013, registering with the SRA as an Alternative Business Structure. On 24 October 2014 the business of the Firm was transferred to Neil Hudgell Solicitors and it ceased to exist as an independent entity.
The proceedings before the SDT concerned the charging of fees for clinical negligence cases conducted by the Firm. Following a complaint to the SRA by the NHS Litigation Authority (“NHS LA”) in November 2013 about the Firm and in particular its charging, the SRA commenced an investigation into the Firm, which included an investigation by its Forensic Investigation Unit which produced a Report in April 2016.
In the SDT proceedings commenced in July 2017, the SRA alleged, so far as relevant, that: (1.1) Mr Good and Ms Park caused the Firm to routinely overcharge by rendering Bills of Costs which were and which they knew to be excessive and often grossly excessive as regards (a) hourly rates and (b) success fees and thereby acted without integrity, contrary to Principle 2 of the SRA Principles 2011 as regards the period between 6 October 2011 and 24 October 2014; (1.2) by that conduct Mr Good and Ms Park breached Principle 6 of the SRA Principles 2011 as regards that period, in that the conduct was not such as maintained the trust the public placed in the respondents and in the provision of legal services; (2) the conduct of Mr Good and Ms Park was dishonest. There was also an allegation by the SRA against the Firm's Compliance Officer for Legal Practice, Ms Fear, that she had failed to take sufficient steps to investigate whether the hourly rates and success fees were reasonable, proportionate and recoverable and thereby breached Principle 6. Ms Fear admitted the allegation against her. She received a reprimand and conditions were imposed by the SDT. She has not appealed against that sanction.
The SDT found, at the outset of its findings at [20.58] of its judgment, that Mr Good had set the hourly rate of £400 and a 100% success fee in clinical negligence cases and had done so as a matter of policy until at least September 2013 and on some matters thereafter. It accepted Ms Park's evidence that she had no authority to change the rates. The SDT went on to find beyond reasonable doubt that any decisions as regards amending the hourly rates and/or success fees prior to April 2014 were made only after authorisation by Mr Good. At [20.59], the SDT rejected the submission that Mr Good had not signed off the Bills and not caused the rates to be charged. He had set the policy and only he could change the rates, so that he had caused the Bills with the hourly rates and success fees complained of to be rendered.
At [20.61] the SDT found that the £400 hourly rate was excessive, which the respondents accepted with the benefit of hindsight. It also found that the rate of £250 per hour when charged for a Grade D fee earner [i.e. a trainee or paralegal] was excessive. It was more than double the Guideline rates [for Hull (City)] and produced Bills that were unreasonable and disproportionate. At [20.62] the SDT found that Mr Good and Ms Park knew this to be the case at the time.
It went on to reject Mr Good's various explanations for charging these rates. The relevant findings at [20.62] are sufficiently significant for the determination of this appeal that they merit quotation in full:
“The Tribunal found that charging at £400.00 an hour, a rate that was almost four times that which would be charged for a Grade D fee earner under the Guideline rates, was grossly excessive. This rate could not be justified on the basis that fee earners at the Firm, by virtue of their training, were more experienced than fee earners in other firms. The First Respondent's argument in that regard was not credible. Nor could it be justified by the First Respondent's desire to “test” the rate. That rate was said to be justified due to the complex nature of the work. Indeed, that was explicitly stated in the Bills. The Tribunal noted that on a number of occasions, Judges had found that the cases were not complex. Whilst it was accepted that neither the First nor Third Respondents were experienced in clinical negligence work, the Tribunal did not accept that they did not recognise that within that area, there would be cases that were complex, and others that were far more straightforward. The simplicity of the Humphrey case was outlined on more than one occasion by the District Judge. Neither the First nor the Third Respondent recognised or acted upon that. The First Respondent may well have believed that the District Judge's findings as regards costs were wrong, however it was at no point suggested that his evaluation of the complexity of the issues in that matter were wrong. The Tribunal did not accept that either Respondent believed that all clinical negligence cases were complex. Even if that had been their opinion prior to Humphrey, such an opinion was not sustainable and could not be reasonably held thereafter. The Tribunal found that to the extent that such a belief was maintained, it was solely for the purpose of justifying the continued charging at such rates.”
The reference to the Humphrey case was to one of the cases where the NHS LA as paying party had challenged the Bill of Costs presented by the Firm and the matter had proceeded to detailed assessment before a District Judge as costs judge. The original Bill in that case, which claimed an hourly rate of £400 for all fee earners and a success fee of 100% was for £37,298. Following the detailed assessment on 17 April 2013, the Bill was reduced by DJ McIlwaine to £3,330.35, a 91% reduction. At [20.29] the SDT had cited his observation during the detailed assessment that it was a relatively straightforward matter and there was nothing complex about the case. At [20.30] the SDT had recorded what the District Judge had said in relation to the 100% success fee that it was: “with the greatest of respect, shall we say ambitious. I think the man on the Clapham Omnibus might put it slightly differently.” He reduced the success fee to 25%. The SDT also recorded that having awarded £3,330.36 in costs, the District Judge remarked “Blimey” when he was reminded that the original amount claimed by the Firm was £37,928.
Returning to [20.62] of the judgment in the present case, having referred to some of the expert evidence, the SDT continued:
“The Tribunal accepted that with the £400.00 hourly rate being contained in the CFA [i.e. the Conditional Fee Agreement between the Firm and its client], there was no breach of the costs rules in including that rate in the Bills. However, the costs rules also required Bills to be proportionate. This was not a question of technical costs rules breaches; that had been conceded by the Applicant. The question was, as described by Mr James, an ethical one. The Tribunal agreed with DJ Besford's assessment that this was not a commercially negotiated rate. In fact, the rate was one which the clients knew they would never be required to pay given the system operated by the Firm. 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.”
The reference to DJ Besford was to one of the other District Judges sitting in Hull who had conducted detailed assessments of the Firm's costs, in particular Scott, in relation to which the SDT had cited at [20.36] his judgment dated 28 July 2014 which was highly critical of the Firm's conduct and Johnson, in relation to which the SDT had cited at length at [20.37] his judgment dated 23 September 2015, which was also highly critical of the Firm's conduct. In particular DJ Besford had said:
“…over a number of years I have assessed a significant number of [the Firm's] bills. My comments are based on that experience. … The bills often show that a number of fee earners have been involved. The fee earners are usually described as being ‘Fee Earner X (assisted by his/her team)’ or ‘Supervisor X’. Their status, using the guideline descriptions are...
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