Charitable legacy challenges – preventing successful claims when wills include charitable bequests
Manak v Solicitors Regulation Authority  EWHC 1958 (Admin)
Whilst many solicitors before the Solicitors Disciplinary Tribunal (SDT) facing an integrity allegation would be relieved to avoid a strike off, the ability of the SDT to impose continuing restrictions on practice can have severe consequences on one’s career and the ability to earn a living. If, as in this case, the SDT imposes every type of restriction possible, it can have a chilling effect on future employers, who may draw the conclusion that the offending misconduct was more serious than it actually was.
Mr Manak was suspended from practising for two years for failing to adequately supervise work which led to irregularities in a number of conveyancing transactions and breaches of the Solicitors Accounts Rules (SAR). The findings made by the SDT included a lack of integrity and acting recklessly in the handling of client monies. Aside from the suspension, the SDT also ordered that Mr Manak’s practice be subject to continuing restrictions once the suspension period expired, a regulatory power rather than a disciplinary one. These included indefinite restrictions preventing him from practising as a sole practitioner, being a partner or member of an LLP, a compliance officer for legal practice or compliance officer for finance and administration, holding client money, being a signatory on any client account or work as a solicitor other than in employment approved by the SRA.
Mr Manak’s appeal included a challenge against some factual findings, that the two year sanction was disproportionate and that the costs order imposed against him was excessive and unjustified. In respect of his appeal against the continuing restrictions, he argued that they were so restrictive as to give the impression that he had been involved in the misappropriation of the funds, which would put off future employers from hiring him and affect his ability to earn a living.
Although most of his appeal points were rejected by the Court, the High Court agreed that some of the continuing restrictions imposed by the SDT were disproportionate. The High Court is normally slow to interfere with decisions but in this case they made the decision on several grounds:
1) The SDT failed to give reasons for the decision to impose continuing restrictions and no reasons as to why the ones imposed were necessary and appropriate.
2) Once the Tribunal was contemplating the imposing of continuing restrictions it should hear submissions from the solicitor. This did not happen in Mr Manak’s case.
3) There are six types of restrictions available to the SDT and in this case the SDT imposed every single one of them on Mr Manak’s practice. The High Court held that imposing such substantial restrictions against holding client money, being a signatory on any client account or working as a solicitor other than in employment approved by the Solicitors Regulation Authority was “likely to be regarded by prospective employers as implying some form of misappropriation of funds”.
4) Liberty to apply at a later date to apply or vary or lift restrictions, did not remove the need for the SDT to explain the reasons for its decision. Plus, without reasons or an explanation as to why the restrictions are necessary, a solicitor has no yardstick against which to measure subsequent conduct in the event of a future application to vary or lift the restriction.
It is right that the SDT are reminded that reasons are required to demonstrate what action is required in these types of cases. Findings in and of themselves will not always justify the action taken. It may be that the Tribunal did not pay sufficient regard to the fact that whilst its sanction was disciplinary, any restrictions placed upon a solicitor’s practice are regulatory in nature. Reasons are important for at least three reasons. First, they help solicitors assess what they will be measured against in any later application to vary conditions. Second, they introduce greater transparency to the public. Finally, they reduce the likelihood of disproportionate action being taken. Although Mr Manak might not be perceived by the SRA or the SDT as the ‘winner’ in this case because he lost most of his appeal points, it is hoped that the SRA and the SDT will remedy the criticisms identified by the High Court in future proceedings, such that when regulatory action is taken in future, it is proportionate.
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