Those who receive “benefit and goodwill”, must accept “burden”
The High Court has ruled that a law firm cannot escape responsibility for handling complaints relating to a sole practice with which it merged.
Rejecting a judicial review challenge by London firm Kerman & Co, Mrs Justice Patterson ruled that the Legal Ombudsman (LeO) had jurisdiction.
Patterson J said that as Kerman & Co “received the benefit and goodwill of the business it cannot be unfair, in my judgment, if they also have to accept the burden” of the complaint.
The judge said that it was “within the discretion” of LeO as to whether it published its decisions.
She said that LeO may either choose not to publish the decision relating to Kerman & Co at all, or make it clear that the finding arose from sole practitioner Peter Levy’s previous firm, PS Levy & Co. He joined Kerman & Co in 2012 as a consultant.
The High Court heard in R (on the application of Kerman & Co) v Legal Ombudsman [2014] EWHC 3726 (Admin) that Gary Garland, lead ombudsman at LeO, told Kerman & Co that his provisional view was that it was the successor practice.
He rejected the firm’s view that because Mr Levy was still alive, his sole practice still existed. Mr Garland said it was “abundantly clear” that PS Levy & Co no longer existed as an entity and had been incorporated into Kerman & Co.
Patterson J said the firm argued that “proper accountability means that the person who gave rise to the complaint should be responsible for it whilst they exist” and “it cannot be right that a sole practitioner can move to a different firm and be in a better position in terms of avoiding accountability than they would be as an individual.”
Patterson J went on: “In my judgment those submissions do not fully comprehend the nature of the statutory scheme. It is one to establish a statutory ombudsman. The scheme is not dealing with matters of professional discipline and accountability to the profession. It is dealing with consumer complaints.”
The judge concluded: “The consequence of the claimant’s argument would be that the only way a sole practitioner would cease to exist would be upon death. I accept the defendant’s submission that Parliament cannot have intended such a quixotic result.”
Mrs Justice Patterson said it was clear that LeO had “jurisdiction to proceed to investigate the complaint in which Kerman & Co is the appropriately named respondent”.
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