High Court overturns SDT decision to throw out “badly prepared” case against solicitors

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29 July 2016

High Court: SRA not spared criticism

High Court: SRA not spared criticism

The High Court has overturned an unusual decision by the Solicitors Disciplinary Tribunal (SDT) to strike out for abuse of process the prosecution of five solicitors because the Solicitors Regulation Authority (SRA) had failed to put forward a “coherent or manageable case to answer”.

Mrs Justice Thirlwall said she understood the tribunal’s “exasperation with much of the poor presentation of the case by the SRA but poor presentation does not equal abuse of process, still less does it justify striking out adequately pleaded allegations of serious misconduct”.

The SRA had brought proceedings against three partners and two solicitors at Coventry firm Heer Manak.

In a decision from November 2014 that was only published in July 2015 because of delays in deciding the costs of the case, the SDT said it had balanced the interests of the public, who should not be exposed to bad practices, against the solicitors’ right to a fair trial, and that its decision was “based upon the impossibility of holding a fair trial”.

The SRA appealed only in respect of the cases against partner Kulwant Singh Manak – in relation to 12 of the original 15 allegations – and solicitor Rajbinder Kaur Dhillon in respect of two allegations.

Thirlwall J recorded: “The SRA has decided it is not in the public interest to continue the proceedings against [the other solicitors] and so there is no appeal in their cases. In the absence of any appeal the cases against [them] remain struck out on the ground that they were an abuse of the process of the tribunal.”

She said the allegations ranged in seriousness from breaches of the accounts rules to improper use of client monies, including a loan to the firm by a client, Ms Dhillon’s father. Some of the conduct was said to be dishonest, reckless or lacking in integrity. Much of the conduct was connected with property transactions, some of which were said to bear the hallmarks of fraud.

She continued that Mr Manak denied all allegations that he had acted dishonestly, recklessly or without integrity. He denied allegations that he failed adequately to supervise junior solicitors. He accepted that the firm had received a loan from a client who had not received independent advice and who had not been repaid.

The firm closed in December 2013 after failing to secure professional indemnity insurance because of the allegations. Ms Dhillon had left in July 2011 and took no part in the appeal, having left the roll of solicitors in 2014.

In the High Court, Thirlwall J said that a number of the problems identified by the tribunal were actually resolved “through the working of the tribunal process so that it was not unfair to proceed”.

She added: “Before concluding that the pleadings were so unclear that the respondents could not understand the case they had to meet, it was incumbent upon the tribunal to consider in respect of each respondent what the case alleged against him or her was.

“The tribunal could have approached this question by transaction, by allegation or both. They did not carry out that exercise.” Had it done so, the judge continued, “there would have been no risk of an abuse of the process in continuing with the case”.

However, she did not spare the SRA from criticism. The SRA’s QC acknowledged that the pleadings were far from perfect, which the judge said “overstates their quality by some margin”.

As a result of her findings, Thirlwall J said “steps must now be taken to have what remains of the case determined by a differently constituted tribunal. A fresh approach is needed”.

She said the SRA’s intention to put other deferred allegations before the new tribunal was “undesirable”.

“Adding allegations over and above those I have restored will delay the hearing and add to its length… What happens to the rest can be considered in the light of the decisions on the restored allegations.”

The judge also observed that there was “no reason of principle” for the SDT prohibiting publication of the result of a hearing until such time as costs have been determined.

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