SRA hit with rare costs order for bringing “improper” prosecution

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31 October 2016


SRA: Costs doubled by use of QC

SRA: Costs doubled by use of QC

The Solicitors Disciplinary Tribunal (SDT) has made a rare costs order against the Solicitors Regulation Authority (SRA) for having brought an “improper” prosecution against a law firm.

It also expressed concern at how the regulator had ramped up the costs of the case by instructing leading counsel.

Ipswich and London firm Attwells, and its senior partner Nick Attwell, were accused of paying away £27,500 to a third party without appropriate authority.

However, the SRA withdrew its allegations against the firm before the four-day hearing last month, and the tribunal went on to find that none of the eight allegations against Mr Attwell were made out.

The case turned on rival accounts of a crucial conversation between Mr Attwell and ‘PB’, the man who had provided the funds under question for a transaction involving one of the firm’s clients. Though the solicitor had not kept proper records of the conversation, the SDT found PB’s evidence unreliable and said the allegations were not proved beyond reasonable doubt.

The general rule is that, absent other factors, costs orders are not ordinarily made against the SRA in discharging its responsibilities as regulator of the profession, and it can still reclaim its costs in unsuccessful prosecutions for the same reason. Here it claimed nearly £85,000 from Mr Attwell, while the solicitor and his firm sought their combined costs of £80,000 from the SRA.

The ruling, which was published last week, said: “Having considered all of the witness testimony it had heard and the documentary evidence, the tribunal concluded that the case against the [firm] was improperly brought.”

It conducted a summary assessment – on the basis that a detailed assessment would only add to the high level of costs already incurred on both sides – and ordered the SRA to pay the firm £14,000, made up of a brief fee for well-known disciplinary specialist solicitor Andrew Hopper QC, and 50% of the costs incurred up to the end of July, when the regulator notified the firm that it would not be proceeding with the allegations.

The SDT noted that the firm had engaged with the SRA and “consistently questioned the fact that proceedings” were brought against it and Mr Attwell. “[It] had also acknowledged that the conduct of the file could have been improved and that there could have been better and more frequent file notes.”

In relation to Mr Attwell, the SDT found that the decision to commence the proceedings was not improper.

“There was nothing to suggest that the decision to bring and continue the proceedings had been anything other than honest, reasonable and, until PB changed his evidence, apparently sound.

“[Mr Attwell] was the author of his own misfortune. He had not kept proper records and there was nothing on his file to rebut the complaint that PB made to the SRA. Had there been such a record, [he] would have been in a completely different position and indeed the case may never have been brought.”

As a result, the tribunal refused Mr Attwell’s application that the SRA pay his costs, but it also refused the SRA’s application, saying there was nothing about the way in which Mr Attwell had conducted the proceedings or had behaved during the course of the SRA’s enquiries to justify a costs order.

As part of its considerations, the tribunal looked at whether it should penalise the SRA for not accepting a settlement offer made by Mr Attwell before the hearing.

“The tribunal rejected this as a general proposition on public policy grounds. The regulator should not be in jeopardy of having to pay a respondent’s costs where it had lost but the case had been properly brought.”

As a final note, however, the SDT noted “with regret and considerable concern” the fact that between them the two sides had spent over £150,000 in costs. The tribunal said it made no criticism of either Mark Cunningham QC of Maitland Chambers, for the SRA, or of Greg Treverton-Jones of 39 Essex Chambers, for the respondents.

“The case had been very ably presented by both sides. However, the instruction of leading counsel by the SRA, whilst a matter for it, had doubled its costs.”

Mr Attwell told Legal Futures: “The tribunal’s criticism of the failure to record a full file note is unfair. The correspondence only ever supported my version of events as indeed did the accounts of the solicitor who conducted the case (now a partner at a City firm), my partner the MLRO officer, my client and myself.

“Instead the SRA favoured the account of a non-client who was seeking to use the SRA as a debt recovery service and after he gave evidence on day one it was clear that his evidence could not be relied upon. But rhater than give up, the SRA ploughed on with their QC trying to build a case against me by putting me through the ordeal of over a day in the witness box when their case had already failed.

“Ultimately, justice was served and no allegations were found against me, but the case should never have been brought, should have been ended on day one when the SRA’s only witness was unreliable and the tribunal should have been far more critical of the SRA.”

An SRA spokesman said: “We reviewed the case in the summer after receiving additional information and decided, properly, to withdraw proceedings against the firm.”



One Response to “SRA hit with rare costs order for bringing “improper” prosecution”

  1. It must have been a very stressful time for Mr Attwell. We are told these days that regulation is outcome focused.I hope in such a rare cost order finding, that the over zealous SRA individual responsibile for this fiasco has their career outcome adjusted.

  2. Sue on November 1st, 2016 at 12:17 am

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