Acting to stop harm: the FCA and Appointed Representatives
High Court declines to quash a decision by the Visitors of the Inns of Court to uphold a decision of the Disciplinary Tribunal of the Council of the Inns of Court to disbar a barrister. It was held that despite the fact that the claimant had been unfairly deprived of the right to cross examine a witness on all the evidence due to an unlawful decision of the Bar Standards Board not to disclose an earlier draft of a witness statement, such unfairness could not possibly have made any difference to the eventual result.
Judgement date: 30 July 2013
The Claimant barrister (DM) on 4 March 2011 was found guilty by the Bar Standards Board (BSB) of producing forged documents and was subsequently disbarred. The decision was upheld on appeal by the Visitors to the Inns of Court – the outcome of which we summarised in a previous update: McCarthy v Bar Standards Board, Visitors to the Inns of Court, 25 January 2012. DM sought judicial review of the Visitors’ decision.
DM had been engaged by a lay client in the disciplinary Tribunal (‘the Tribunal’) by “Direct Access”. Rule 6 of the Rules relating to the engagement of a barrister via Direct Access required DM to send out a letter setting out the terms and fees in respect of each piece of work. DM was accused of providing legal services without having sent a Rule 6 letter. DM contended that he had done so and produced a number of Rule 6 letters which he asserted had been sent at the time. DM’s lay client, ST, and her husband, TA, disputed this.
Prior to the hearing, the BSB was required pursuant to Rule 7(1)(a) of the Disciplinary Tribunal’s Regulations 2009 to serve a copy of each witness statement in support of the charges. A letter was sent to the ST by a senior case officer at the BSB stating;
“We have decided that we will not disclose [TA]’s witness statement till shortly before the hearing date. This will remove the possibility of Mr McCarthy fitting his case around that statement.”
The witness statement was at that stage unsigned. A further letter was subsequently sent to the complainant outlining that is was the BSB’s intention not to serve the statement until 28 days prior to the hearing.
DM’s solicitors on his behalf agreed directions with the BSB; in particular that ST and TA need not put in statements but should attend the substantive hearing for the purposes of cross-examination. This had been agreed to by DM’s solicitors in ignorance of the fact that by that time a full, unsigned statement had been obtained from TA. The directions also provided that any additional material upon which the BSB proposed to rely should be served 28 days prior to the substantive hearing.
In compliance with the directions DM duly submitted a substantial witness statement. TA duly served a witness statement in response, a number of paragraphs of which responded in detail to matters referred to in DM’s witness statement.
The disciplinary Tribunal heard from the complainant and TA and cross examination focused on emails passing between DM and TA. The Tribunal chose to believe TA’s evidence on the documentation. The email documentation in question had importantly contained scant reference to Rule 6. The Tribunal were unaware when making their decision that TA’s witness statement, taken as his evidence-in-chief, was not his first witness statement and that the directions had been agreed in ignorance of the existence of the draft statement which the BSB had deliberately chosen not to.
By the time of the Visitors’ hearing, DM and his solicitors had learned of the existence of the draft statement. The Visitors, contrary to the submissions of the BSB, held that there had been a duty under Rule 7(1)(a) of the Regulations to serve the statements which it had obtained. By a majority of 2-1, however, the Visitors concluded that no unfairness had resulted from the failure to serve. This was because, in their view, it was plain to DM and his solicitors the order in which statements were to be exchanged, and in any event even if TA and ST had submitted their statement first, DM would not have been in a stronger position forensically because of the compelling nature of the documentation containing the email correspondence. The dissenting Panel member had concluded that the procedural error may have led to unfairness, which could have led to a breach of natural justice; therefore a rehearing should be ordered.
The High Court upon hearing the matter concluded that it was “beyond question in disciplinary proceedings with the potential for such grave consequences, draft statements capable of being used to discredit a witness should be disclosed.” It noted that were these criminal proceedings, no-one responsible for the prosecution would hesitate in disclosing the draft statement once the signed statement had been served. The Court saw no reason why the position should be any different in disciplinary proceedings and that the “demands of elementary fairness” imposed such an obligation. The draft statement could have been deployed by DM to undermine and challenge the evidence of TA. It was concluded that the failure by the BSB to serve the draft statement was a breach of Rule 7 and that it was unfair.
The Court then turned to the question of whether the unfairness could be remedied by judicial review proceedings. Decisions of the Visitors are only amenable to judicial review if the Visitors have exceeded their jurisdiction, failed to exercise it, abused their powers or acted in breach of the rules of natural justice.
The Court examined the case of R v Visitors to the Inns of Court ex parte Calder  QB 1 where it was recognised that even though the Visitors in that case erred in law in declining to hold there was a breach of natural justice, the error fell within their jurisdiction and therefore was not amenable for judicial review. There was a suggestion, however, that an error on the part of a Disciplinary Tribunal may affect the fairness of the hearing by the Visitors.
It was held by the Court that in the instant case the Tribunal did not cause any breach of natural justice because they had proceeded in ignorance of the draft statement. However, a breach of natural justice was created by the Visitors themselves as they were misled as to the obligations of the BSB. There had therefore been unfairness in the approach taken by the Visitors as they had never compared what TA had said in his draft statement against what he had said in his signed statement. This being the case, it would be open to the Court to quash the decision of the Visitors on the grounds that the error of law led to unfairness on their part.
The Court asked itself whether, now that it had identified the error, it must in fairness afford DM the opportunity to test TA’s evidence in the light of the draft statement. It reminded itself that the nature and degree of the unfairness and the extent to which it might have made a difference must be examined. Significantly, it looked to whether the loss of the opportunity to cross-examine TA in relation to comparisons between the draft statement and the signed statement could possibly have made any difference to the result. It decided that unless it could be said that there was no real possibility of any alternative result then the decision of the Visitors should be quashed.
It was noted by the Court that in the email correspondence DM failed to refer to the existence of Rule 6 letters save for a single email which referred to a letter “which sets out the fees and the basis upon which they would be incurred”. The Court was unable to identify and possible rationale for that failure.
The Court therefore “with reluctance” ruled that it would not quash the decision. It stated that DM had a right to cross examine TA with all of the material properly available to him, and he had been wrongly and unlawfully denied that right due to the failure to disclose the draft statement. It remained the case, however, that the history of the emails provided conclusive evidence that four Rule 6 letters were not sent at the time, as they should have been.
Permission to move was granted by the Court but it refused to quash the Visitors’ decision.
This case serves as a stark reminder to professional regulators that a duty does exist to disclose draft statements which are capable of undermining their case in that they might have an impact upon the witnesses’ accuracy or credibility. This case very much turns on its own facts and had there been a potential for a different finding of the disciplinary Tribunal had the draft statement been disclosed, then the decision would have been quashed. It is of note that the BSB has now published a policy making explicit the duty to serve draft statements.
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