Posted by Neil Rose, Editor, Legal Futures
The first, and most important, thing to remind everyone before I dissect the events of the last few weeks is that there is still no stain on the character of former Chief Legal Ombudsman Adam Sampson. There has never been any suggestion of fraud or wrongdoing around the expenses issue which led him to resign, and the permanent secretary at the Ministry of Justice (MoJ), Richard Heaton, acknowledged before the justice select committee last month that, in the private sector, the arrangements would have passed muster.
Further, all the pay and expenses arrangements that have subsequently been questioned had been approved by the board of the Office for Legal Complaints (OLC), which oversees the operation of the Legal Ombudsman. At that time it was chaired by Elizabeth France, who was replaced by Steve Green in April 2014.
So, what has it all been about? One might have thought that given Mr Sampson left his post in May, the matter would have been put to bed. But a simple question asked by MP Alberto Costa inadvertently, and spectacularly, reopened the sore and led to three weeks of he said/she said that has raised more questions than provided answers.
The underlying problem
For the background of what happened last November, when this website broke the story of Mr Sampson’s resignation, see my initial story and follow-up blog. Nothing I have learnt since writing that blog has given me cause to rethink it. So, here are my first questions:
- Why did the expenses arrangements became a problem after having been signed off by the National Audit Office for the previous four years?
- In August 2013, the triennial review of the OLC, conducted by the MoJ, congratulated the office on its progress to date and noted that it had “effective financial management systems in place”. Did the MoJ get this wrong? If so, how and why?
- Section 14(a) of schedule 15 of the Legal Services Act 2007 provides that staff appointed by the Office for Legal Complaints (the formal name of LeO and whose board oversees its operation) are “appointed on terms and conditions determined by the OLC”. How come the Ministry of Justice’s oversight trumps this?
The MoJ had nothing to say on the second question, but the answer to the third appears to be that the Treasury treats the OLC as spending public money, which means the MoJ – as the sponsor ministry – is then responsible to Parliament for how it is spent. The nonsense is that the OLC does not spend public money: it is the profession’s money collected from the frontline regulators through an annual levy, passed on through practising fees.
There are also wider issues here about whether both the OLC and Legal Services Board should be accountable to government in this way, but they are for another day.
Suspension and resignation
Onto the details of Mr Sampson’s resignation. Why does this matter? It obviously matters to Mr Sampson to have the record show that he resigned and was not sacked, but more broadly, it goes to the competence of the OLC’s governance.
According to Mr Green, the then MoJ permanent secretary, Ursula Brennan, suspended Mr Sampson as the OLC’s accounting officer on 13 November 2014, and Mr Sampson resigned on 17 November. An accounting officer is someone in a public body whom Parliament may call to account for the stewardship of the resources within his or her control.
This might suggest that Mr Sampson resigned because of Ms Brennan’s actions, but Mr Sampson says he did not. He says that, following lengthy investigations, all the facts around the expenses issue were known by August 2014, and he had been intending to resign “for some time” to avoid LeO suffering reputational problems.
Whatever the facts of the situation (and I believe Mr Sampson on this), the brutal reality is that questions over expenses of people in offices such as this one are toxic nowadays. And, frankly, it was no great secret at the time to those in the legal regulation world that Mr Sampson was thinking about leaving anyway, having set up the ombudsman scheme and ensured it was running smoothly.
So from August 2014, Mr Sampson says, “there was a period of negotiation about the terms of my departure, which the chair regularly discussed with the MoJ and senior staff at LeO. A meeting was fixed between the chair and his adviser and myself and my lawyer for 14 November to iron out the final details. The MoJ suspension arrived just hours before my resignation was to be finalised”. It is important to note that being suspended as accounting officer did not affect his other responsibilities.
Despite this, negotiations continued. Having agreed the terms of the resignation – “that I would leave on 17 November with an agreed reference and press statement, receiving my pay but without having to serve my notice” – it was announced to LeO’s staff, Mr Sampson recounts (and one of the people to whom I spoke was there to hear it and confirms what was said).
“Mr Green was fulsome in his praise and support, emphasising that I was leaving without a stain on my character… He then left to inform the then permanent secretary of the change. I said my goodbyes, handed in my equipment and left.
“Later than night, I received a phone call from the chair’s advisor telling me that following the meeting with the permanent secretary, the agreement had changed. No explanation for the change of direction has ever been given to me. Nevertheless, I held to my resignation, considering that it was the proper thing to do whatever the arrangements around it.”
Assuming this is an accurate account, and those to whom I have spoken say it is, the next question arises:
- What happened at that meeting between Mr Green and Ms Brennan to precipitate the sudden change of direction?
I have asked the MoJ, but no answer was forthcoming.
Now it’s disciplinary
Some days later Mr Sampson was suspended from his post while what Mr Green describes as “the issues set out in full in our 2013/14 annual report and accounts were investigated”. These, I take him to mean, were the £1.2m of “irregular” payments made to LeO staff, given that by then Mr Sampson’s expenses (a matter of some £22,000) had been fully investigated.
Mr Green says Ms Brennan permanently removed Mr Sampson’s accounting officer status on 8 January; Mr Sampson adds that while this was a decision with which he profoundly disagreed, it could only be challenged by way of a costly judicial review.
- Question: Why exactly was Mr Sampson’s accounting officer status removed?
There was then a disciplinary hearing on 23 February, although neither letter elaborates on the basis for this, except for Mr Sampson saying that “since accounting officer status was a condition of my contract, the permanent secretary’s actions had placed me in breach of contract, which entitled the OLC to dismiss me without notice”. I believe the various financial issues were the other ‘charges’ against him, but it has not been confirmed.
- Question: On what basis was the disciplinary hearing held?
The disciplinary panel, which was chaired by Mr Green, did indeed order summary dismissal. But a differently constituted appeal panel, which met on 24 March, concluded that this was unduly harsh. Mr Sampson says it ordered instead that “you should continue to be employed, and serve your notice, until your resignation comes into effect on 17 May 2015”.
Bringing the story up to date
Mr Sampson duly served out his notice and officially left on that day. All went quiet until Mr Costa’s question and the answers provided by Mr Heaton and another official.
Like Mr Costa, I had until then believed that Mr Sampson had resigned, and so I approached the OLC to clear up the confusion. There were clearly difficulties at its HQ in Birmingham as there has been significant board member and staff turnover since these events, meaning the institutional memory was not what it might have been, although of course Mr Green is still chair.
Eventually I received a call saying simply that Mr Sampson had been dismissed at a disciplinary hearing. He flatly contradicted this, and when I sought to confirm the OLC’s position, I then received a second statement.
This read: “Mr Sampson resigned in November 2014 giving six months’ notice. A subsequent disciplinary hearing concluded that Mr Sampson should be dismissed without notice. Mr Sampson appealed. The appeal panel determined that dismissal without notice was too harsh a sanction, although they agreed that dismissal with notice would have been appropriate. Mr Sampson was therefore reinstated for the remainder of his notice period until his prior resignation took effect.”
The statement, and particularly the words “would have been appropriate”, led me – I believe reasonably – to understand that he was in fact not dismissed and was instead left to see out his notice. With the OLC refusing to elaborate, I contacted the MoJ for its reaction and ran the story I did.
But a week after that, I received a new statement from the OLC saying that Mr Sampson had in fact been dismissed with notice. Having shared this with Mr Sampson for his response, I was instead copied in on an e-mail sent by his lawyer to the OLC warning that he considered this suggestion to be untrue and defamatory.
Not having libel advice on tap, I was considering what I should do when, last week, the justice committee published Mr Green’s letter. It looked like qualified privilege applied, allowing me to run the story.
Significantly, Mr Sampson tells me that at the same time as it issued the statement to me, the OLC e-mailed him a letter confirming that he had been dismissed with notice at the appeal hearing. It sounded like the OLC trying to dig itself out of a hole of its own making.
- Question: How did the OLC satisfy itself of the intention of the appeal panel?
So, where are we now? Frankly, not a lot further on than we were when Mr Costa piped up. I’ve asked several questions in this blog. Neither the MoJ nor OLC are providing answers. Ironically, although Mr Sampson has been the subject of the stories, arguably it is the OLC, MoJ and National Audit Office whose conduct is more under the microscope.
But at a time when the Legal Ombudsman is furiously patting itself on the back for having been in existence for five years, the OLC’s governance deserves to be put under the closest of scrutiny from now on.