Regulation: the rise of the tactical complaint

An interesting facet of the cultural shift in attitude towards regulation and regulators over the last 15 or so years is the rise of the tactical complaint. Whether made to a regulator or to a judge as part of litigation, a tactical complaint is one which is made for the purposes of advancing one’s own (or one’s client’s) position either by seeking to discredit one’s opponent or adviser or by seeking to drive a wedge between adviser and client by creating a conflict arising from alleged regulatory non-compliance.

Litigation tactics

Ironically, the apparent increased awareness of regulatory jurisdictions does not seem to correlate with a rise in understanding of the proper approach to questions of regulation. For example, solicitors acting properly should not be using regulatory issues as litigation tactics, as doing so contradicts public policy.

An agreement not to make regulatory complaints cannot properly be the subject of a settlement agreement. Where there is proper cause for a regulatory complaint, solicitors should consider whether they are obliged to make it. If the conclusion is that they are so obliged, they must make the complaint or be at risk of failing to comply with their own reporting obligations.

Solicitors tempted to engage in such conduct – particularly where the focus is on discrediting one’s opponent – may also wish to reflect on whether they will leave themselves at risk of civil proceedings if they do manage to persuade a judge to criticise their opponent’s representatives – or even professional witnesses.

The risk of civil proceedings

The recent case of SW v United Kingdom (ECHR) Application no. 87/18 concerned a social worker who had been the subject of adverse findings having been a professional witness in family proceedings. There had been no proper notice that adverse findings would be made and there was no proper opportunity for the social worker to know and address the findings which the judge made as these were given in an ex tempore judgment at the end of the hearing.

Post judgment representations were made but, ultimately, the social worker was left in the position of having to appeal to the Court of Appeal, which found she had standing to appeal and that she had been subjected to an unfair procedure.

By that time, the judgment had been circulated – at the judge’s express direction – to the social worker’s past and current employers and to her regulator. She lost her job as an immediate result and was unable to find further work pending the appeal. The regulators found no issue with her work.

Although the Court of Appeal set aside the impugned findings and directed they be treated as if they had never existed, the European Court of Human Rights (ECHR) found the social worker nevertheless remained a victim for the purposes of bringing a claim under the ECHR, and found the United Kingdom had failed to provide an effective remedy for infringement of the social worker’s rights. Based on the facts of the case, it was not in a position to assess damages based on loss of earnings, but awarded damages of €24,000 and costs of €60,000.

In this particular instance, the social worker had been employed by personnel agencies and could not therefore have brought a claim for unfair dismissal. The government had to withdraw its assertion she had failed to exhaust domestic remedies. What might have happened had the social worker had the requisite length of service is not known.

The case is interesting as it deals with the consequences of judicial findings against a professional witness in circumstances where the decision itself had been subject to reporting restrictions but circulated to those who, according to traditional wisdom, would plainly have a right to know of the findings.

There was no suggestion the judge had acted in bad faith and no claim under the Human Rights Act 1998 could be made as a result. The crux of the case against the UK was that there was no effective remedy in these circumstances. As already noted, the ECHR found the Court of Appeal’s express indication that the findings were quashed and to be treated as they had never existed was an insufficient remedy for the breach of Article 8 suffered.

Judicial criticism

One might expect that solicitors are more at risk than any other profession of being the subject of judicial criticism, simply by reason of proximity to the legal system. We have seen a number of firms criticised by judges in relation to all sorts of issues.

While it may be possible for a judge to direct certain matters be put squarely to a solicitor when acting as a witness, there is rarely any form of notice when criticism of, for example, the approach to disclosure, or intemperate inter partes communication is made. Of course, the courts may utilise the Hamid procedure and can require solicitors to appear and explain their conduct. Whether such procedures would satisfy Article 8 would always be assessed against the circumstances of an individual case.

This case stands as a timely reminder that the courts do not always get it right and are capable of failing to follow proper procedure. I can think of at least two cases where a judge may have fallen into this particular trap.

Employment considerations

For firms whose staff are the subject of judicial criticism, there is a potential implication within the ECHR judgment that civil actions (including employment claims) are a possible remedy which would need to be exhausted before an Article 8 complaint could be made (depending on circumstances).

Any internal decisions to investigate, sanction or report the conduct of an individual based on judicial criticism should consider carefully both the substance of the criticism and the process by which the findings were reached. If the affected individual was not afforded the opportunity to raise a defence, that must be taken into account. If it is not, the firm may find itself in the firing line.

Similarly, any firms seeking to impugn opponents and/or professional witnesses need to be alive to the risk that doing so may make them a target for civil claims. If regulatory issues had been raised in a deliberate attempt to secure a litigation advantage, it could be possible to frame a case in conspiracy against solicitor and client.

Perhaps more fundamentally, the SRA as a public body itself may have a duty to consider whether judicial criticism of a solicitor as a non-party to proceedings had been the result of a fair procedure by the court. If not, the SRA would need to consider carefully whether and in how far any action based on such criticism could be independently justified by reference to Article 8.

Firms have a duty to ensure that staff understand and comply with legal, regulatory and ethical obligations and this would include ensuring staff understand when and how to raise conduct issues with opponents or colleagues.

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