Acting to stop harm: the FCA and Appointed Representatives
When is a striking off order for dishonesty appropriate?
The appellant solicitor (D) appealed against a decision that he be struck from the Roll of Solicitors in respect of his professional misconduct.
D had been an equity partner at a firm of solicitors. Prior to joining this firm in 1999, D had owned one-third of the shares in a company (L) which provided medical reports for personal injury claimants. The firm and L entered into an agreement whereby L agreed to provide medical reports for clients for whom the firm acted under the scheme of a claims management company. D did not disclose his on-going interest in L to his partners at the firm or to the firm’s clients.
L provided services to the firm for five years until the claims management company went into liquidation and D sold his shares in L in 2004. During that period D made substantial profits which he did not disclose. D eventually disclosed his interest in 2007 to his former partners and the SRA. D paid his former partners at the firm a substantial commercial settlement, part of which related to sums paid to L in respect of the firm's clients.
A large number of allegations of professional misconduct were made by the SRA against D.
It was held by the Solicitors Disciplinary Tribunal (SDT) that D had deliberately kept his interest in L secret, that he failed to inform his clients that he had an interest in the company that provided their medical reports and that he had deliberately deceived his fellow partners so that he could retain the whole of the benefit of his interest for himself. D was found to have acted dishonestly and his conduct was considered to be very serious.
When determining sanction, the SDT imposed a fine rather than striking off or suspending D in view of the length of time that had passed since the occurrence of the dishonest conduct, the fact that D had paid his former partners a settlement fee and as it was considered that D did not present a risk to the public if he remained in practice.
The Solicitors Regulation Authority appealed against that decision and the Divisional Court decided that D should be struck from the Roll of Solicitors in view of the nature of his dishonest conduct.
D lodged an appeal against the decision of the Divisional Court on the basis that they had failed to give proper weight to the decision of the SDT, which had been in a good position to assess both the risk to the public if D were allowed to continue in practice and the risk of undermining confidence in the profession. D further submitted that the unusual circumstances of his case placed it in that residual category of cases of dishonesty for which striking off was not an appropriate penalty.
It was determined by the Court of Appeal that the imposition of a fine by the SDT in this case was an inappropriate penalty. It was not accepted that D’s dishonesty was so trivial as to fall into the residual category of cases for which striking off is not an appropriate penalty. In particular, it was decided that the passage of time, although a factor to be taken into account, did little to detract from the gravity of D’s conduct, especially when the duration of the dishonesty and its subsequent concealment were taken into account. D’s appeal was therefore dismissed.
This decision reaffirms that cases of proven dishonesty are the most serious breaches of professional standards. The normal sanction to be imposed in cases where dishonesty has been proven will be striking off and Panel’s should be mindful of this when reaching their decision on sanction. It will only be appropriate in a small number of cases for a less severe sanction to be imposed and this will only be appropriate where the dishonesty is found to be at the ‘bottom end of the scale’.
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