Acting to stop harm: the FCA and Appointed Representatives
Judgment date: 9 October 2012
High Court rules sanction of suspension is unduly lenient and strikes off solicitor for dishonest and misleading statements
Mr Spence (S), a solicitor, set up his own practice in July 2007. In September 2007 his professional indemnity insurance expired. Following non-payment of his fee for 2007-2008, the Solicitors Regulation Authority (SRA) cancelled S’s practising certificate and made the decision to intervene in his practice in July 2008.
In February 2011 the Solicitor’s Disciplinary Tribunal (SDT) found S guilty of making dishonest and misleading statements to the SRA. The tribunal found that S had continued to practise without a practising certificate or professional indemnity insurance. In addition, it was found that he had failed to: contact the SRA investigators; comply with the SRA’s accounts rules; and pay the insurance fee for the assigned risks pool. Accordingly, the tribunal ordered that S be suspended for a period of three years.
The SRA sought to appeal the Tribunal’s decision on the basis that the sanction was inappropriate. The SRA argued that suspension was unduly lenient and that the finding of dishonest professional conduct should have resulted in S being struck off the roll of solicitors. It was submitted that the case did not constitute an exception to the usual practice of ordering a strike-off where there is a finding of dishonesty.
The High Court agreed that the sanction was unduly lenient and ordered S to be struck off the roll. The test was to consider whether a sentencing decision had been clearly inappropriate. S’s decision to deliberately mislead the SRA investigators whilst failing to put his practice in order was the most serious aspect of his dishonesty. The Court considered it an aggravating factor that S had enlisted another solicitor to lie on his behalf in order to divert the attention of investigators. It was important to consider whether this was a momentary lapse in an exemplary career or whether S’s conduct warranted him being struck off, with particular consideration to be given to the message any penalty would send.
The Court held that the SDT had erred in law in failing to strike off S. Although the Court understood why the Tribunal had not considered the present case to be of the most serious example, it ruled that S’s dishonesty was calculated, and no less culpable than misappropriating client funds. The Court also ruled that by continuing to practise without insurance or a practising certificate, S exposed his clients to huge risk.
This is another in a long line of recent cases where the courts have reiterated that only in exceptional circumstances should a finding of dishonesty result in a sanction other than an order for the solicitor to be struck off. Practising without insurance or a practising certificate and deliberately misleading SRA investigators are to be viewed just as seriously as direct misappropriation of client funds.
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