Richard Clegg v Solicitors Regulation Authority [2019] EWHC 2408 (Admin)

Richard Clegg v Solicitors Regulation Authority [2019] EWHC 2408 (Admin) concerned an appeal by Mr Clegg, a solicitor, against the decision of the Solicitors’ Disciplinary Tribunal to strike him off the Roll of Solicitors and order him to pay costs of £12,000. The Divisional Court (Lord Justice Davis and Mr Justice Popplewell) dismissed the appeal.

Mr Clegg had admitted breaching Outcomes 1.1 and 1.16 and Principles 4 and 6 of the Solicitors Regulation Authority Code of Conduct 2011 in relation to Allegation 1.1, which concerned his failure to inform his client Mrs LW that he had entered a defence in civil proceedings brought by Professor JW against his firm stating that Mrs LW should be the correct defendant. The Tribunal also found breach of Outcome 3.4 in that he had exposed Mrs LW to the risk of litigation to protect the firm. Allegation 1.2, which was contested, alleged that between February 2015 and March 2016 he misled Mrs LW by failing to provide full and accurate information regarding Professor JW’s claim, in breach of Principles 2, 3, 4 and 6 and Outcome 1.1. The SRA alleged both want of integrity and dishonesty in respect of Allegation 1.2. The Tribunal found all alleged breaches proved to the criminal standard and, having found dishonesty, concluded that striking off was the appropriate sanction.

The factual background concerned clinical negligence proceedings in which Mr Clegg’s firm acted for Mrs LW under a Conditional Fee Agreement dated 19 May 2011. The firm instructed Professor JW, an oncologist, as an expert in January 2013. In April 2014 PH, the solicitor with conduct of the matter, confirmed Professor JW’s availability for trial in a window of 12 to 20 January 2015, and in correspondence stated that she appreciated his terms and conditions including cancellation fees. Professor JW’s terms provided that he charged £1,500 per day for court appearances, that instructing solicitors were responsible for payment, and that if less than two weeks’ cancellation notice was given he would charge his full daily rate.

The clinical negligence claim settled in around August 2014 for £160,000 with costs to be assessed if not agreed. The settlement was approved by the court in September 2014. Professor JW was not informed of the settlement or that the trial would not proceed. On 9 January 2015, shortly before the trial, PH telephoned Professor JW to inform him that the case had settled. On 13 January 2015 Professor JW wrote requesting payment of his cancellation fee of £10,500 for seven days. When this was not paid he sent a letter before claim on 13 February 2015 and issued County Court proceedings on 16 April 2015 against GMS Law as defendant.

Mr Clegg drafted the defence to Professor JW’s claim, stating at the outset that the correct defendant should be Mrs LW as she was liable for disbursements under the indemnity principle. The defence denied that Professor JW had been instructed to attend trial and contended there was no concluded contract. Mrs LW was not informed of these proceedings or that the firm’s defence asserted she was liable. At trial on 28 January 2016 before Deputy District Judge Wood, represented by counsel, the firm was unsuccessful. The judge found that a contract had been concluded on Professor JW’s terms and conditions and that Professor JW was entitled to his cancellation fee. The amount payable was agreed at £9,422 plus costs.

On 2 February 2016 Mr Clegg wrote to Mrs LW stating that he was close to agreeing the costs payable in the clinical negligence proceedings but needed to bring “a recent development” to her attention concerning “the amount you need to pay one of the Experts by way of Disbursements.” He explained that Professor JW had insisted on being paid for the time set aside for trial and stated “I defended this claim on your behalf” on the basis that Professor JW should at most be paid for two days. He said the court was “completely wrong” and had a “particularly low opinion” of Professor JW. He stated that Mrs LW was responsible for paying all disbursements and sought her instructions to appeal, offering to conduct the appeal on the same no-win-no-fee basis as the clinical negligence claim itself.

A telephone conversation followed on 3 February 2016. Mr Clegg’s attendance note recorded that he went through the result of the claim and that Mrs LW confirmed instructions to appeal. He wrote again on 3 February 2016 thanking her for confirming instructions to appeal “the Court’s Decision that one of your Experts should be paid a 7 day Trial Cancellation Fee – even though he was never specifically instructed to attend the Trial.” An appeal was lodged on 17 February 2016 with detailed grounds settled by Mr Clegg. On 9 February 2016 the firm paid Professor JW £9,422 by cheque drawn on client account.

Professor JW expressed concern about payment from client account by letter of 19 February 2016 and wrote to the SRA the same day. He also wrote to Mrs LW on 25 February 2016 expressing concern that settlement should not come from her account as it resulted from the firm’s failure to notify him of cancellation. Mrs LW did not raise this with Mr Clegg until 20 June 2016 when she demanded payment of £9,422. Mr Clegg responded by letter of 26 July 2016 explaining that absorbing Professor JW’s fee would have no impact on the amount due to her because of the shortfall between assessed costs and solicitor and own client costs. A subsequent adjudication by the Legal Ombudsman in 2018 found in the firm’s favour on this point, concluding that while payment should not have been from client account, Mrs LW would not have been entitled to receive that sum in any event because it would have gone towards the costs shortfall. The SRA accepted this position by the time of the Tribunal hearing.

The Tribunal found Allegation 1.1 proved, including breach of Outcome 3.4. On Allegation 1.2 the Tribunal found that in the letter of 2 February 2016 Mr Clegg failed to inform Mrs LW that the claim was against the firm and not her, and failed to inform her that the claim was based on terms and conditions whereby Professor JW had been asked to set aside time and the firm had failed to notify him of cancellation in time to avoid the fee. The Tribunal found the letter “apt to mislead” and that Mrs LW was indeed misled. It rejected Mr Clegg’s explanations for seeking her “instructions” and referring to a no-win-no-fee agreement. The Tribunal found the letter misleading both in its statements and its omissions, particularly in failing to explain the full basis on which the claim was defended including the indemnity principle defence and failing to explain the reasons for Deputy District Judge Wood’s decision.

As to the telephone call of 3 February 2016, the Tribunal rejected Mr Clegg’s evidence that he had given full details of the basis of Professor JW’s claim and the reasons for its success. It preferred the evidence of Mrs LW. The Tribunal reasoned that had such detail been given it would have been reflected in the attendance note, in the letter of the same date, and would not have caused Mrs LW to complain as she did in June 2016. The Tribunal found that although Mr Clegg did not have the full judgment transcript until June 2016, he knew enough to draft detailed grounds of appeal on 17 February 2016 and thus had fully understood the salient reasons for Deputy District Judge Wood’s findings, yet did not correct the impression given to Mrs LW.

The Tribunal found the correspondence misleading in two ways: Mr Clegg failed to provide full and accurate information as to Professor JW’s claim or Deputy District Judge Wood’s findings, and the information he did provide misled Mrs LW into believing she was a party to the proceedings. He omitted information that could lead Mrs LW to form the impression that the firm was in any way to blame for incurring the disbursement. Breaches of Principles 3, 4 and 6 and Outcome 1.1 were found proved.

On integrity the Tribunal found that a solicitor acting with integrity would have informed the client of the basis of the claim, namely that the firm had failed to inform Professor JW in sufficient time to avoid cancellation fees. A solicitor acting with integrity would have made clear that the client was not a party to the litigation and that the claim was being defended in part on the basis that she was liable. Instead Mr Clegg sought to garner his client’s support by providing misleading information and failing to outline the circumstances and background in full. His conduct demonstrated a failure to abide by the ethical standards of the profession, breaching Principle 2.

Applying the test in Ivey v Genting Casinos Ltd [2017] UKSC 67, the Tribunal found beyond reasonable doubt that Mr Clegg had deliberately and consciously withheld the full details of the claim from Mrs LW. He purposefully gave her the misleading impression that she was the defendant by stating he was defending the claim on her behalf, seeking her instructions for an appeal and suggesting no-win-no-fee funding, when he knew the firm was the defendant. He deliberately and consciously failed to inform her of the basis of Professor JW’s claim, the reasons Deputy District Judge Wood found in Professor JW’s favour, and that part of the firm’s defence was that Mrs LW was liable for the cancellation fee. The Tribunal accepted his explanations regarding the reference to “recent developments” and that he might have provided Mrs LW with further monies if the appeal succeeded. It found that ordinary decent people would consider that by deliberately withholding information and providing misleading information, Mr Clegg’s conduct was dishonest. Allegation 1.2 was found proved beyond reasonable doubt including dishonesty.

On sanction the Tribunal found Mr Clegg was not motivated by financial gain and may have made an additional payment to Mrs LW had the litigation succeeded. His motivation may have been to protect the reputation of the firm and PH. His actions were planned: he deliberately omitted information that might have led Mrs LW to believe the disbursement resulted from the firm’s failure, consciously omitted relevant information and positively asserted misinformation. He had total control and responsibility for the circumstances giving rise to the conduct. The misconduct was deliberate, repeated and continued over a long time. His insight was limited. Although this was a single client matter and a single episode in a previously unblemished career, given the nature and extent of the dishonesty there were no exceptional circumstances justifying departure from striking off. A lesser sanction would not be appropriate.

On appeal Mr Clegg, appearing in person, challenged the factual findings as unjustified on the evidence applying the criminal standard, and argued the findings of want of integrity and dishonesty and the sanction of striking off were unjustified. Lord Justice Davis reviewed the applicable principles governing appeals from specialist tribunals, emphasising that the appellate court is not engaged in a rehearing, will be slow to depart from findings influenced by oral evidence, will only interfere if findings cannot be explained or justified or are ones no reasonable tribunal could reach, and will respect the specialisation and expertise of the tribunal. He noted that a judge need not expressly mention every piece of evidence and need not give reasons for his reasons.

Lord Justice Davis rejected the various grounds of appeal. The Tribunal was entitled to assess and evaluate the evidence as it did and to reach the conclusions it reached. Although there were points in Mr Clegg’s favour – he was not motivated by financial gain, the Tribunal accepted he would have paid a further sum had the appeal succeeded, and he genuinely believed Professor JW was not entitled to claim for the full seven days – a financial motivation was not a necessary prerequisite to a finding of lack of integrity and dishonesty. The Tribunal was entitled to find that Mr Clegg consciously and deliberately suppressed from Mrs LW the underlying reason for the claim, namely the firm’s subscription to the terms and conditions and PH’s failure to stand Professor JW down in time, and deliberately led her to think she was party to the appeal when in fact only the firm was.

Lord Justice Davis held that the reference to no-win-no-fee was very misleading and the Tribunal was entitled to reject Mr Clegg’s explanations. Mr Clegg’s attack on Mrs LW’s honesty was particularly surprising given he admitted the letters were unclear and confusing and did not involve a good choice of words. The Tribunal was entitled to reach its factual conclusions viewing the evidence as a whole. The SRA’s case was not primarily dependent on Mrs LW’s evidence alone; the course of events and terms of the correspondence (both in what it said and did not say) strongly supported the SRA’s case. The Tribunal’s reasons were sufficient. The complaint that the Tribunal treated Mr Clegg as knowing the full text of Deputy District Judge Wood’s judgment at 3 February 2016 was misplaced; the Tribunal’s point was that his knowledge of the judgment as reported to him enabled him to draft very full grounds of appeal on 17 February 2016.

Lord Justice Davis held that the many points taken by Mr Clegg, individually or cumulatively, did not justify interference with the Tribunal’s findings and conclusions. The Tribunal was reasonably entitled to assess and evaluate the evidence as it did. The law in Ivey was correctly applied to the facts as found. The suggestion that the Tribunal failed to ascertain Mr Clegg’s state of mind was unsustainable. While Mr Clegg appeared to accept to some extent that a finding of want of integrity was justified, the Tribunal was entitled to conclude matters were far more serious than resulting from misunderstanding or inadvertent drafting. The insistence on the indemnity principle was difficult to comprehend when Professor JW’s terms made the firm responsible for his fees and the cancellation fee arose from the firm’s own omission in failing to stand him down. The principal vice lay in the conscious and deliberate failure properly to inform the client of that omission.

On sanction, the appellate court would pay respect to the view of a specialist panel equipped to assess the standards expected of solicitors and the need to maintain public confidence. Mr Clegg’s suggestion that a reprimand would have been appropriate for want of integrity was unrealistic. The Tribunal had found both serious want of integrity and dishonesty, which justified striking off in the circumstances. There was no proper basis for appellate interference. Mr Justice Popplewell agreed.

In short, the Divisional Court dismissed Mr Clegg’s appeal, holding that the Tribunal was entitled on the evidence to find he had deliberately withheld information from and misled his client regarding the basis of the claim against the firm and her position in relation to it, that such conduct involved want of integrity and dishonesty, and that the sanction of striking off was justified.

Solicitors Regulation Authority v Day & Ors [2018] EWHC 2726 (Admin)
Ivey v Genting Casinos (UK) Ltd (t/a Crockfords) [2017] UKSC 67; [2018] Crim LR 395, [2018] AC 391
Wingate & Evans v Solicitors Regulation Agency [2018] EWCA Civ 366, [2018] 1 WLR 3969