Honest, guv

On 5 December the Solicitors Disciplinary Tribunal (SDT) refused to strike off a young solicitor accused by the SRA of dishonesty, unreported.

The defendant solicitor was accused of: dishonestly preparing false corporate documents, dishonestly backdating two leases, misleading her employer as to the authenticity of such documents and entering into a relationship with a client which brought the profession into disrepute.

Each of the allegations was found not to be proven with the Tribunal expressing concern at the length of time (almost 12 months) which had elapsed between the solicitor's referral to the SDT and the date of issue of the proceedings. Such was the SDT's concern that the Tribunal ordered the SRA to pay a significant contribution (£10,000) toward the costs of the proceedings (roughly £33,000). However the costs award was declined, as this was highly likely to lead to an appeal by the SRA.

The accusations

In 2005 a foreign-owned company (J Co) wished to refinance its ownership of a large apartment block in west London. There financing was for some £16m. To prove its identity, J Co was required to produce identifying documents and its share certificates of which only one, faxed, copy was available. This was a bearer share held by a Saudi Arabian princess.

The first allegation concerned the alleged backdating of 'corporate documents', which included share certificates, board meeting minutes and the company secretary's certificate of the authenticity of those minutes.

The documents were said to have been fabricated in collaboration with the company administrators who, it was alleged, were paid a bribe of US$1,000 (allegedly facilitated by the accused) to secure the willing assistance of the company's administrators. The backdating was said to be dishonest.

The defence was not assisted by language barriers and other problems associated with statement taking over distance, given J Co was Panamanian registered and administered by Panamanian lawyers.

The second allegation concerned 'dishonest' backdating a lease of a part of the same block which was to be let as office space to the princess's UK representative who held her power of attorney. The accused had drawn up the lease but had delayed its completion. When she did complete the lease it was dated the same date as the start of the term.

The third allegation was that the accused deceived her then employers about the provenance of the corporate documents referred to in the first allegation. This was not assisted by an admission of deception in the course of employment hearings which led to her summary dismissal in the summer of 2005.

Finally, the accused was alleged to have entered into an intimate relationship with the princess' UK representative which, it was said, led to the dishonest behaviour that was the subject of the first three allegations. This relationship was admitted as a 'one-night stand', but was denied to have brought the profession into disrepute.

Defending the allegations

While the backdating of the lease and the improper relationship were admitted, the dishonesty elements were denied. Of the admitted breaches it was denied these had any material effect in bringing about a breach of professional standards. This was not the easiest position to defend. If proven, it was likely to lead to the respondent being struck off. The SRA however had failed to take into account many relevant details which were later raised at the Tribunal, including that:

'¢ the accused had been subject to what she perceived as sexual harassment in her workplace;

'¢ she was able to call evidence from a former secretary to the effect that there was unwanted attention and a less than convivial working atmosphere overall;

'¢ the allegation about backdating corporate documents was based on an assumption that the minutes were fabricated. However, no one had grasped the fact that minutes of meetings are almost always created after meetings and backdated. There was no evidence that the meeting in question did not take place;

'¢ evidence was called that the alleged bribe was in fact for unpaid fees due to the Panamanian lawyers;

'¢ the accused's unfortunate admission about deception was made while under pressure of an internal employment appeal at which she was not represented; her supervising partner had not made any effort to ascertain the genuineness or otherwise of the corporate documents; and

'¢ the backdated lease was yet another unfortunate aspect but the effect was not material as the tenant had occupied from the start of the lease and had been paying the rent as it fell due. No one gained anything from the backdating.

Balancing the issues set out above, and the evidence that was called about the character of the respondent, the Tribunal found that none of the allegations were proven.

Crucially, the Tribunal was persuaded that there was no dishonest intent because the combined test for dishonesty set out in Twinsectra v Yardley [2002] UKHL 12, and further explained in later cases such as the Court of Appeal in AG for Zambia v Desai [2008] EWCA Civ 875, had not been satisfied.

The result, on the face the SRA's case, might be surprising, but it goes to show that things are not always what they seem and that a full assessment of the facts should always be carried out.