High Court: upheld SDT fines ruling but overturned ombudsman
A High Court judge has overturned a Legal Ombudsman (LeO) decision that a barrister had not earned his fee, but separately upheld a Solicitors Disciplinary Tribunal (SDT) decision to hand out a record fine.
Barrister Lincoln Crawford overturned a decision which found he had given poor service in a conference with a public access client and ordered that he should refund half his £780 fee (including VAT).
The complaint had first been rejected by Mr Crawford’s chambers’ complaints system. After a further complaint was made to LeO, a caseworker recommended it should be dismissed on the grounds that a reasonable level of service had indeed been provided.
However, her decision was challenged and when the complaint passed to the deputy chief ombudsman, he found there had been poor service and ordered the refund.
In R (on the application of Crawford) v The Legal Ombudsman & Anor [2014] EWHC 182 (Admin), Mr Justice Popplewell acknowledged that decisions of LeO were to be read “with a degree of benevolence… and should not be construed as if they were statutes or judgments”.
But he ruled that in his decision the ombudsman had drawn an adverse inference from Mr Crawford having taken no notes during the conference at issue. Yet, at the same time, the ombudsman had recognised that Mr Crawford was entitled not to have made a note.
The judge said: “I find it impossible to read the [decision] in any other way than as adopting this illogical process of reasoning as the sole basis for its conclusion”. He therefore concluded: “The decision of the ombudsman is irrational and must be quashed.”
He ordered that the matter be remitted for further consideration in the light of his judgment.
In the SDT case, London practice Fuglers and its two equity partners, were fined £75,000 between them for allowing Portsmouth football club to use its client account as a banking facility to service its day-to-day trading activities. A total of about £10m passed through the account in a four-month period in 2009-10. In court, the fine was said to be the largest ever handed down by the SDT.
At the time, the club’s banking facilities had been withdrawn because HMRC had presented a winding-up petition. The firm was fined £50,000 and the partners respectively £20,000 and £5,000, plus costs of a further £56,000 split in the same proportions as the fines. Another, now former, partner was fined £5,000 but did not appeal.
In Fuglers LLP (in association with David Berens & Co), David Anthony Berens and Bryan Myer Fugler v Solicitors Regulation Authority [2014] EWHC 179 (Admin), the appellants argued the fines were disproportionate and in the case of Mr Fugler, unjustified. They also argued it was wrong to penalise the partners so substantially in addition to the firm.
Mr Justice Popplewell dismissed the appeal, saying the SDT might reasonably have considered imposing a suspension: “If there was to be no suspension, a very substantial fine was called for to mark the seriousness of the misconduct and in order to send a message to the profession in relation to the use of client accounts, which is a matter of central importance in the regulation of solicitors’ conduct.
“I do not consider that a total fine of £75,000 for the misconduct in question was disproportionate or excessive, let alone clearly so.”
On fining the firm, he said: “There was no error in the tribunal imposing a penalty on the firm, as distinct from its partners. The firm is the regulated entity. Imposing a sanction on a firm, rather than the individuals, may result in the sanction becoming more readily known and appreciated by other members of the profession.”
Leave a Comment