The Solicitors Regulation Authority (SRA) has paid a record £228,000 in costs to a solicitor whose prosecution a disciplinary tribunal found was “improperly brought and pursued”.
It has also conceded that the Solicitors Disciplinary Tribunal (SDT) has the power to order costs on the indemnity basis, meaning that a High Court appeal by Jamil Ahmud on the point settled in October, three days before it was due to be heard.
The SRA alleged that Mr Ahmud, a partner at London firm Bloomsbury Law, dishonestly sought to recover more costs in litigation than he was entitled to. It first investigated in 2016 but only interviewed Mr Ahmud’s client in January 2020, having relied on documentary evidence to that point.
The client’s evidence did not support the allegations and six months later the SRA applied to withdraw them, which the SDT permitted, albeit in a damning judgment.
The tribunal said the proceedings “should not have been brought in the first place” – the allegations were made “improperly and unreasonably”.
It added: “The tribunal concluded that all matters were infected from the outset with a regrettable injudicious and peremptory lack of professional assiduousness.”
The general starting point is that the SRA is not liable for costs even if a prosecution fails, as it is exercising its functions in the public interest. This can be departed from for good reason, which the SDT said was the case here given the “series of grave errors” made by the regulator.
It rejected the SRA’s contention that an order would have a ‘chilling effect’ on its work. “On the contrary,” the tribunal said, “it may make it more likely that prosecutions would be undertaken and pursued in a more diligent manner than this one had.”
It ordered a detailed assessment of Mr Ahmud’s claim for £192,000 in costs (including VAT) but rejected his request that they be assessed on the indemnity basis, having accepted the SRA’s argument that it did not have no jurisdiction to order this; even if it did, the SDT said the costs judge should make the decision.
Mr Ahmud appealed this and in the consent order that settled the appeal, the SRA explicitly conceded that the SDT has the power to award indemnity costs and to direct that any assessment should proceed on that basis.
The amount paid by the SRA also includes £21,000 of Mr Ahmud’s costs in bringing the appeal.
Mr Ahmud said: “By bringing improper proceedings, the SRA caused me significant distress and wasted a great deal of the profession’s money.
“Its lack of judgment was shown not just by its decision to launch baseless proceedings, but also by its offensive attempt to avoid paying any of my costs when it was forced to withdraw those proceedings.
“I gave the SRA and their solicitors, Capsticks, numerous opportunities to abandon their misguided prosecution, but they failed to do so until the trial was imminent…
“At no stage has the SRA shown any insight into the distress and expense which it has caused or offered any apology.”
The SDT noted that, in June 2019, Mr Ahmud had offered to bear his own costs if the SRA withdrew the allegations. It did not reply to this or a similar letter two months later.
He said he has filed formal complaints against the SRA and Capsticks. “It remains to be seen whether the SRA will investigate themselves and their solicitors and I will be interested to see how much contrition and transparency is displayed in replying to those complaints.”
The SRA declined to comment on any of the issues raised by the case, with a spokesman saying: “We always reflect on the cases we take forward so that we can learn from each one.”