Applying the civil standard of proof

At the time of writing, we are roughly eight months away from the adoption of the civil standard of proof by the Solicitors Disciplinary Tribunal (SDT). As was anticipated before we’d ever heard of covid-19, we are starting to see decisions being handed down which apply this standard. 

Thus far, most of the reported decisions have either been agreed outcomes or hearings with limited factual matters in issue. A number of reported decisions have been made in the absence of the respondent and the SDT has, in those cases, adopted its usual approach to ruling on the propriety of continuing in the absence of the respondent as a preliminary matter. 

In fact, there is little remarkable about the merits of any of the cases reported thus far within the new regime. Dishonesty keeps being treated as a striking off offence; the trend towards agreed outcomes appears to be continuing; and the SDT continues to confirm its commitment to upholding Articles 6 and 8 of the European Convention on Human Rights (ECHR). 

I was interested to read the case of SRA v Barry and Taylor (Case No. 12051-2020) in which the sole disputed allegation – that of recklessness in connection with unauthorised transfers from client accounts – was not upheld despite the adoption of the civil standard. All other allegations, including incompetence in relation to compliance with the Solicitors Regulation Authority (SRA) accounts rules, were admitted.

Briefly, the facts were that Barry as a sole principal, compliance officer for legal practice (COLP) and for finance and administration (COFA) admitting to having failed to prevent unauthorised transfers from client account to office account, undertaken by his bookkeeper without his knowledge or permission. Additional allegations involved failing to report to the SRA upon receipt of a qualified accountant’s report; and aggravating features of incompetence and recklessness.

The case itself reflects an alarmingly common story of an experienced solicitor dropping the ball when it comes to oversight of a client account. For regular readers of SDT case reports, the tale of a long, otherwise unblemished career being marred by non-compliance with accounts rules should be taken as a warning. 

I remain baffled that there has never been any formal requirement for refresher training on compliance with the accounts rules before solicitors are deemed fit to manage law firms. It may be that the changes to the codes of conduct last year requiring that firms ensure managers are aware of their legal, regulatory and ethical obligations will finally address this issue – but I have my reservations. 

Aside from noting the first indication of the SDT’s approach to genuinely disputed issues of fact adopting the civil standard, the case is interesting in that the sole sanction imposed on Barry was a restriction order preventing him from being involved in the management of firms without the SRA’s permission. It is unusual for such orders to be made in isolation and they are more frequently coupled with fines or reprimands or tacked onto the end of a period of suspension. 

It is now common for the SDT to impose restrictions on practice, since being told by the High Court in Comacho v Law Society [2004] EWHC 1042 that such issues should not be left to the separate regulatory powers of the SRA (then the Law Society). The practice was initially slow to take hold but seems to have become commonplace in recent years. 

In many ways, restrictions may be seen as better suited than more common ‘punishment’ sanctions such as fines to fulfil the stated objectives of disciplinary proceedings – which are the protection of the public by preventing or deterring repetition and to deter others from similar poor choices. 

It is important to recognise, particularly within the stresses of modern practice, that restrictions on practice can have far reaching consequences and, for example, impact the ability to retain membership of accreditation schemes such as Lexcel or CQS. 

That may, in turn, impact the individual’s ability to undertake work in certain areas or for certain clients. Perhaps more fundamentally, such restrictions may also impact the ability to obtain indemnity insurance or to comply with rules relating to insurance distribution activities. 

Revisiting Comacho is interesting in many ways, not least because it questioned the fairness of the then costs regime which failed to take into account the respondent’s means; and called into question the suggestion that it was ok simply to trust the Law Society to enforce costs awards appropriately.

While the requirement to consider means has moved on, the SDT has increasingly accepted the SRA’s urgings to trust in its commitment to enforce orders fairly and responsibly; and has restricted its interventions on costs. 

I remain troubled that the SDT simply accepts the SRA’s unevidenced position on its approach to costs recovery, which is also reflected in paragraph 51 of the Barry judgment. I might be tempted to ask the SRA to demonstrate its approach to costs recovery and to provide information about how many have been made bankrupt as a result of non-payment of SRA costs; how many people have had to put their family home at risk by agreeing to charges; and what factors the SRA considers in determining whether and how it will agree to reasonable repayment proposals.

Even on a civil standard of proof, I’m not sure it should be sufficient for the SRA to say it will take a pragmatic view on costs recovery in cases where ability to pay is in issue. Where costs are coupled with a fine, how does the SRA approach the question of which gets priority given that fines are payable to HM Treasury?

I am encouraged on the issue of costs by the apparent ease with which the SDT has adapted to the switch to remote hearings in the wake of covid-19. The reduced costs potentially associated with remote hearings may well result in a material benefit to the profession at large over time if the option of remote hearings remains available. While I can’t advocate entirely remote hearings in all cases, there are a significant number of SDT cases which involve the parties and many advocates travelling to London for hearings where points of dispute are limited and may lend themselves to disposal at a video hearing. 

In considering the last eight months and the initial developments of the new civil standard regime, it is only fair to recognise that the SDT has not been stopped in its tracks by covid-19. Neither, so far as we can tell from reported judgments and feedback from users, has it suffered the same extent of backlogs
and issues which have reportedly affected other entities such as some courts and the Legal Ombudsman. 

It’s something of an achievement where the SDT has had to handle arguably its most significant transitional period, certainly within the last decade, while also getting to grips with remote hearings.  

Susanna Heley is a partner at RadcliffesLeBrasseur rlb-law.com