Solicitors Regulation Authority v Day & Ors [2018] EWHC 2726 (Admin)

Transcript

**Solicitors Regulation Authority v Day & Ors [2018] EWHC 2726 (Admin)** is a judgment of the Divisional Court dismissing the SRA’s appeal against a Solicitors’ Disciplinary Tribunal decision that had acquitted Martyn Day, Sapna Malik, Anna Crowther and the firm Leigh Day of multiple professional misconduct allegations arising from their conduct of civil claims by Iraqi nationals alleging unlawful killing and torture by British forces following the Battle of Danny Boy in 2004.

The respondents had acted for claimants including relatives of the deceased and nine detainees who maintained they were innocent civilians caught up in the battle. Following a six-week hearing in 2017, the Tribunal dismissed all twenty allegations brought by the SRA. The Tribunal found the respondents to be honest and credible witnesses who had tried to act in accordance with the rules, expressly rejecting the SRA’s contention that they “put financial advantage above professional duty”. One panel member, Mr Hegarty, dissented on certain allegations. The SRA appealed in respect of allegations 1.1, 1.2, 1.4, 1.8 and 1.12 to 1.15 and 1.19. The appeal hearing before Davis LJ, Foskett J and Holgate J lasted six days.

Allegation 1.1 concerned a press conference held jointly by Mr Day and Phil Shiner (of Public Interest Lawyers) on 22 February 2008 at which they made grave allegations of unlawful killing and torture in highly charged language. The SRA contended that Mr Day thereby breached Rules 1.03 and 1.06 of the 2007 Code of Conduct by compromising his independence and behaving in a way likely to diminish public trust. The Tribunal majority found that Mr Day had undertaken a proper review beforehand, had consulted leading counsel (who did not query propriety), and acted reasonably in seeking an independent investigation into serious allegations already in the public domain. The court rejected the SRA’s submission that the majority applied the wrong test or failed to engage with specific criticisms. The court emphasised that the purpose of the conference was to secure an independent inquiry, not to warrant the truth of the allegations, and that MD’s statements were couched in appropriate conditional terms. The language used had to be assessed in that context. The court held that the majority’s evaluative judgment was one properly open to them and involved no error of principle.

Allegations 1.2 and 1.4 alleged failures to provide the “OMS Detainees List” (a document naming the nine detainees with a heading referencing the Martyr Al Sadr and columns including “military unit”) to PIL and later to the Al-Sweady Inquiry between 2007 and 2013. The list had come into Leigh Day’s possession in 2004 via journalist Lee Gordon, but its potential significance (indicating the detainees may have been Mahdi Army members rather than innocent bystanders) was only appreciated by Anna Crowther when reviewing files in August 2013 following a formal notice from the inquiry. The Tribunal found unanimously that the respondents never knowingly withheld the document; that there was no professional obligation under the rules to conduct a full disclosure review in the circumstances; that civil claims had been stayed from 2008; and that while the document became significant, its significance evolved as the case progressed. The Tribunal found no breach of Rules 1.01 or 1.06. The court rejected the SRA’s complaint that the Tribunal failed to grapple with various “trigger points” when a file review should have occurred. Whilst acknowledging the cumulative oversight was regrettable and perhaps generously treated, the court held that the Tribunal’s evaluation, based on acceptance of the respondents’ evidence and assessment of the particular circumstances, was within the range reasonably open to it and involved no material error or inadequate reasoning.

Allegation 1.8 concerned Ms Crowther’s destruction in August 2013 of a manuscript translation of the OMS Detainees List made in Damascus in 2007, after she had accurately typed it up for disclosure. The Tribunal majority found that Ms Crowther had not been negligent and that public trust had not been diminished, noting inter alia that the original Arabic remained intact, the typed transcription was accurate, and the manuscript had “almost no evidential significance”. The court agreed, noting that the SRA had been wholly unable to explain what real significance or value the destroyed manuscript could have had, particularly once it had been established that the list originated in 2004 (not 2007) and a translation already existed. The court saw no basis for interfering with the Tribunal’s dismissal.

Allegations 1.12 to 1.14 concerned fee-sharing arrangements between Leigh Day, PIL and Mazin Younis under agreements dated March 2009 and April 2010. The SRA alleged these constituted improper referral fees for historic cases in breach of Rules 8 and 9.02. Under Rule 9.02, clients must be notified of referral arrangements before referral or instruction. The SRA contended that by paying MY 27.5 per cent of fees on cases referred after March 2009 (with equalisation against PIL’s share for historic cases), the agreements were in substance paying MY for historic cases. The Tribunal majority found that in form and substance MY received fees only for new cases; that the uplift compensated him for being unable to receive fees on historic cases; that all relevant clients were properly notified; and that there was no breach. The court rejected the SRA’s argument that substance differed from form. There was no legal objection to increasing the percentage payable to MY on new cases to reflect that he could not be paid on earlier cases, provided the notification requirement was satisfied. The only relevant prohibition in Rule 9.02 was the notification requirement; that was complied with for new cases and simply did not apply to historic cases under this structure. The court held the majority correctly understood that the agreements avoided breaching the Rule and did not improperly circumvent it.

Allegation 1.15 alleged that a £25,000 payment to MY on 23 December 2008 (described in an email as “a down payment on what will be due to you on [Baha] Mousa”) was an improper referral fee. The majority found it was initially a payment for a historic case in breach of Rule 9.02 but that, once the March 2009 agreement was made, it was re-characterised as on account of future fees and credited against sums due under that agreement. The majority found the breach during the interim period was not sufficiently serious to constitute professional misconduct. The court rejected the SRA’s arguments that the majority erred or inadequately reasoned the matter, noting that the Tribunal had well in mind the absence of a written agreement and the interim non-compliance but found the breach technical and not grave, particularly given that the respondents acted to regularise matters as soon as they understood the position. On the further allegation of breach of Rule 9.01(4) (prohibition on contingency fees to introducers in death and personal injury cases), the court inclined to the SRA’s construction but held it unnecessary to decide the point, since any breach was insufficiently serious given that the payment formed part of MY’s overall entitlement under compliant agreements.

Allegation 1.19 alleged that Mr Day and Ms Malik authorised or arranged 29 payments totalling US$10,465 between October 2008 and June 2012, described as “work leave” payments, which they knew or suspected to be improper (specifically bribes) and failed to take proper steps to satisfy themselves otherwise, acting dishonestly or recklessly. The Tribunal found unanimously that there was no evidence the payments were actually bribes or otherwise improper, and that the respondents did not know them to be so. The majority further found that the respondents did not suspect the payments to be bribes (notwithstanding emails using that word) and accepted their evidence that the payments enabled Iraqi witnesses to attend interviews abroad. The court emphasised the high threshold for appellate interference with credibility findings. It rejected the SRA’s contention that certain errors in the Tribunal’s reasoning (relating to when certain bodies were informed of the payments) were material, finding they were immaterial confirmatory points. The court held the majority was entitled to accept the respondents’ explanations, particularly given their general findings on credibility and integrity. The minority (Mr Hegarty) found suspicion established and equated recklessness with dishonesty, but the court considered this conflation impermissible and held the minority was not entitled on the evidence to find deliberate blind-eye dishonesty where such a case had not been expressly put in cross-examination. The court further held that any alternative case based on failure to investigate unusual payments had not been properly pleaded or pursued and was in any event answered by the finding that suspicion had not been proved.

The court set out the correct appellate approach in detail, emphasising the advantages enjoyed by the trial tribunal; the need for particular caution before departing from findings of fact or evaluative judgments; the principle that an appellate court will only interfere where the decision is one no reasonable tribunal could have reached or where a material error of law, fact or principle is demonstrated; and the additional restraint appropriate to decisions of specialist adjudicative bodies. The court applied the guidance in Thomas v Thomas, Assicurazioni Generali, McGraddie, Henderson v Foxworth and Bawa-Garba, stressing that the appeal court is not engaged in a rehearing and that disagreement with a tribunal’s evaluation is not a legitimate ground of appeal. The court also noted that where a tribunal decision is by majority, it is for the appellant to show the majority was wrong, not for the respondent to show the minority was wrong, though the minority view will be carefully considered.

In short, the Divisional Court unanimously dismissed all grounds of appeal, holding that the SRA’s challenge amounted in substance to disagreement with the Tribunal’s findings of primary fact and evaluative assessment, and that there was no proper basis for an appellate court to interfere with the conclusions of the specialist Tribunal, which had conducted a thorough six-week hearing and reached decisions that were reasonably open to it on the evidence.

Thomas v Thomas [1947] AC 484
Assicurazioni Generali SpA v Arab Insurance Group [2002] EWCA Civ 1642
McGraddie v McGraddie [2013] 1 WLR 2477, [2013] UKSC 58
Fage UK Ltd v Chobani UK Ltd [2014] EWCA Civ 5
Henderson v Foxworth [2014] UKSC 41, [2014] 1 WLR 2600
Biogen Inc v Medeva Plc [1999] RPC 1
Bawa-Garba v General Medical Council [2018] EWCA CIV 1879, [2019] 1 WLR 1929, [2019] 1 All ER 500
Beresford v Solicitors Regulation Au thority [2009] EWHC 3155
Hodgson v Imperial Tobacco Ltd [1998] 1 WLR 1056
Wingate & Evans v Solicitors Regulation Agency [2018] EWCA Civ 366, [2018] 1 WLR 3969
Emery Reimbold & Strick Ltd [2002] EWCA Civ 605
Sumitomo Corporation v Credit Lyonnais Rouse Limited [2001] EWCA Civ 1152

Sharp v The Law Society of Scotland [1984] SC 129
Holden v Solicitors Regulation Authority [2012] EWHC 2067
Myers v Elman [1940] AC 282
Snook v London & West Riding Investments Ltd [1967] 2 QB 786
Westlaw Services Ltd v Boddy [2010] EWCA Civ 929
Ivey v Genting Casinos (UK) Ltd (t/a Crockfords) [2017] UKSC 67; [2018] Crim LR 395, [2018] AC 391
Ghosh [1982] EWCA Crim 2; [1982] QB 1053
Royal Brunei Airlines Sdn. Bhd. v Ming [1995] 2 AC 378
Fish v General Medical Council [2012] EWHC 1269 (Admin), [2012] Med LR 512
English v Emery Reimbold & Strick Ltd [2002] 1 WLR 2409, [2002] EWCA Civ 605, [2002] 3 All ER 385
Assicurazioni Generali SpA v Arab Insurance Group [2003] 1 WLR 577
South Buckinghamshire District Council v Porter (No. 2) [2004] 1 WLR 1953, [2004] UKHL 33

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