A Solicitor, Re [2007] EWCA Civ 840

[2007] EWCA Civ 840ON APPEAL FROM THE LAW SOCIETYVenue Royal Courts of Justice, Strand, London, WC2A 2LLDate Tuesday, 26 th June 2007
Before
SIR ANTHONY CLARKE(THE MASTER OF THE ROLLS)
IN THE MATTER OF THE SOLICITORS ACT 1974RE A SOLICITORNo. 7 of 2007MR A OLUFEKO
(DAR Transcript ofWordWave International LimitedA Merrill Communications Company190 Fleet Street, London EC4A 2AGTel No: 020 7404 1400 Fax No: 020 7831 8838Official Shorthand Writers to the Court)
Mr P Fortune (instructed by Adebowale Olufeku) appeared on behalf of the Appellant.Mr J Goodwin (instructed by The Law Society) appeared on behalf of the Respondent.
Judgment

Sir Anthony Clarke, MR:

[1]This is an appeal by Mr Olufeko from a decision of Mr Venables, the Solicitors’ Regulation Authority adjudicator, dated 14 February 2007 which granted him a practising certificate for the year 2006/2007 subject to three conditions. Those conditions are: “1. He may act as a solicitor only1.1 in employment or partnership; or1.2 as a member, office holder or shareowner of an incorporated solicitors’ practice the arrangements for which have first been approved by the Solicitors’ Regulation Authority. “2. He shall immediately inform any actual or prospective employer, partner, co-member/officer holder/shareowner of those conditions and the reasons for their imposition. “3. He may not act as a training principal or supervisor for any trainee solicitor.” 1.1 in employment or partnership; or 1.2 as a member, office holder or shareowner of an incorporated solicitors’ practice the arrangements for which have first been approved by the Solicitors’ Regulation Authority.[2]Mr Olufeko brings his appeal pursuant to section 13(2) of the Solicitors Act 1974 having chosen not to seek an internal review of the adjudicator’s decision. His primary submission is that his practising certificate should be issued entirely free of conditions. Alternatively he submits through his counsel, Mr Fortune, that the condition that requires the approval of the Solicitors’ Regulation Authority (“SRA”) should be deleted.[3]Mr Olufeko was admitted to the role in September 1998. He practised previously under the name Liberty Solicitors. He is not currently in practice. Nor has he practised since September 2005. A summary of his practising history is set out in a decision of the Solicitors’ Disciplinary Tribunal (“SDT”) dated 19 July 2005. That history may be summarised in this way.[4]On 24 April 2002 Liberty Solicitors were subject to an inspection carried out by the Law Society’s Forensic Investigation Unit (“FIU”). At this time Liberty Solicitors was a partnership between Mr Olufeko and a Mr Babalola. The FIU completed its report on 5 September 2002. It contained a number of allegations against both partners.[5]On 30 July 2002 a Law Society adjudicator found that Mr Olufeko had breached rules 1(c) and (f) of the Solicitors’ Practice Rules 1990 (“the 1990 Rules”) in that he had failed to attend court on 7 September 2001. He was reprimanded in respect of that conduct.[6]On 12 November 2002 a Law Society adjudicator found him guilty of being in breach of rule 1(c) of the 1990 Rules by failing to act in the best interests of his client. He was also found to have provided an inadequate professional service. He was reprimanded for his conduct and Liberty Solicitors were ordered to pay the client £500 in compensation.[7]On 17 January 2003 Mr Olufeko and Mr Babalola were found in breach of rules 8 and 16 of the Solicitors’ Indemnity Insurance Rules 2001 in that they had failed to apply for indemnity insurance cover for 2001/2002 by 1 September 2001, which was the due date, and subsequently failed to pay their indemnity insurance premium at the appropriate time. They were reprimanded for those breaches.[8]On 4 December 2003 the Law Society adjudicator considered the FIU report and referred the conduct of both Mr Olufeko and Mr Babalola to the SDT. Those allegations were in respect of Mr Olufeko:
“i) that he failed to disclose material information and/or circumstances to his mortgagee clients and as such he … acted in breach of Rule 1(a), (c), (d) and (e) of the Solicitors’ Practice Rules 1990; “ii) that he failed to comply with his mortgagee clients’ instructions and as such is in breach of Rule 1(a), (c), (d) and (e) of the Solicitors’ Practice Rules 1990; [and] “iii) that he deliberately and/or recklessly made representations to the Law Society’s Investigation Officer which he knew or ought to have known would prove to be misleading and/or inaccurate, which for the avoidance of doubt is an allegation of dishonesty.”
[9]Before the SDT hearing Ms Wight, a Law Society adjudicator, dealt with Mr Olufeko’s application for a practising certificate for the year 2004/2005. The adjudicator considered that application in light of the fact that matters had been referred to the SDT and were still outstanding before it. By a decision dated 5 January 2005 substantially similar conditions to those which form the subject matter of this appeal were imposed on Mr Olufeko’s 2004/2005 practising certificate. It appears that Mr Babalola was no longer practicing in partnership with Mr Olufeko at this time because the adjudicator, in addition to imposing conditions on his practising certificate, refused an application to approve his partnership with a Miss Quartey. An appeal from that decision to a Law Society review panel was dismissed on 13 April 2005.[10]The SDT heard the matters referred to it arising out of the FIU report on 19 July 2005. The SDT found Mr Olufeko guilty of each of the three allegations, although importantly it found in respect of the third allegation that he was guilty of reckless conduct but that he was not dishonest and that he was not fraudulent. As a result of those findings the SDT suspended Mr Olufeko from practice for a period of three months commencing from 5 September 2005. Mr Babalola was found guilty of three separate and distinct allegations and suspended from practice indefinitely as from 19 July 2005.[11]Following the SDT’s finding, Mr O’Reilly, a Law Society adjudicator, on 5 January 2006 dealt with an application for a 2005/2006 practising certificate made by Mr Olufeko. In the light of his suspension from practice imposed by the SDT, which would have expired in December 2005, the adjudicator imposed the same three conditions on his practising certificate as formed the subject matter of this appeal. An appeal against that decision was rejected by a Law Society review panel on 7 February 2006.[12]As I have already indicated, on 14 February 2007 Mr Olufeko’s application for a 2006/2007 practising certificate was considered by Mr Venables. As I have already explained, he imposed the three conditions which I have quoted. In doing so he gave these reasons:
“On 19 July 2005, Mr Olufeko appeared before the Solicitors’ Disciplinary Tribunal and was suspended from practice as a solicitor for a period of three months from 5 September 2005. I have carefully considered Mr Olufeko’s objections to the conditions imposed on his Practicing Certificate for the practice year 2005/2006 continuing for the practice year 2006/2007. However, I do not consider that it is in the interests of the public and the profession that Mr Olufeko should be permitted to practice as a solicitor, otherwise than in an environment where is able to receive additional support to ensure future compliance with the rules and regulations that govern a solicitors’ practice, and in that respect, it is to be noted that Mr Olufeko has not practiced since 5 September 2005, being the date of commencement of his suspension by the tribunal. “The Solicitors’ Regulatory Authority’s overriding duty is to take action necessary to ensure that the interests of the public and the profession are adequately protected, whilst having regard to the solicitor’s right to practice unfettered by unnecessary, unreasonable, inappropriate or disproportionate conditions. “That duty includes taking action to re-assure clients and the public that appropriate regulatory measures are in place in order to promote and maintain confidence in the profession. The statutory protection afforded by way of Practicing Certificate conditions imposed pursuant to the Solicitors’ Act 1974 (as amended) ensures that the Solicitors’ Regulatory Authority can enforce those conditions in the event that such action becomes necessary. “Accordingly, I am satisfied that it is necessary, reasonable, appropriate and proportionate to impose the conditions.”
[13]Mr Olufeko decided not to exercise the right afforded to him by the SRA to have that decision reviewed by the appeals panel but to appeal directly under section 13(2) of the 1974 Act to me as the Master of the Rolls. In this instance the reason that Mr Olufeko chose not to make use of the internal appeals process is because he seeks “a speedy resolution of this matter” and says that he does not have confidence that the review panel will come to any decision other than to uphold the condition imposed. That lack of confidence stems from the results of his earlier appeals to such a panel in relation to the earlier practising certificates which I have referred.

Mr Olufeko’s Submissions

[14]I have had the benefit of submissions from Mr Olufeko himself, written submissions from his counsel Mr Fortune, and oral submissions from Mr Fortune this morning. The underlying submission is that it was inappropriate and disproportionate for the SRA to impose conditions on his current practising certificate. The thrust of the submission is that it was inappropriate for the SRA to do so because of, or at any rate having regard to, the fact that the SDT had not imposed such conditions on his practising certificate as it concluded that he was not a “threat to the interest of the public and the profession.” He notes that the SDT could, if it thought it necessary, have imposed conditions including these conditions on his certificates. In these circumstances he submits that it is unfair and oppressive for the SRA not to follow the SDT’s decision and to refuse to impose practising certificate conditions.[15]In short, it is submitted that the SRA should have accepted the decision of the SDT which, given its composition, including a solicitor and a lay member, was in the best position to ascertain the necessary steps in order to protect the public and the interests of the profession. It is further submitted that the SRA has provided no compelling reason beyond saying that the practising certificate conditions are necessary to protect the interests of the public and the profession. He submits that given the SDT’s conclusions, a suspension was neither right nor proportionate.[16]He further submits that the adjudicator ought to have taken account of the fact that he has taken steps to ensure that the matters which were referred to the SDT would not recur. In particular he has undertaken a considerable amount of professional training in order to ensure that he is able or perhaps better able to ensure that he can practice in a fully rule compliant manner. He submits that the SRA must have rejected the evidence of the training that he has undergone. That training has related to matters concerning practice management and compliance with money laundering regulations. Thus, since September 2005 he has obtained practice diplomas in mergers and acquisitions, joint ventures, business organisations, arbitration law, intellectual property law and trading and commercial arbitration and mediation. He has attended a management training course in November 2006 and a money-laundering regulations course in January 2007.[17]He further submits that he has practiced as a solicitor since 1988 and has undergone considerable legal education and training over the last 18 months. There can be no question, he submits, of his being unable to practice properly and professionally in the future. He further says in his petition:
“I have looked very hard for employment or partnership but I could not find anybody willing to approach the Law Society on my behalf as they believe they will be exposing themselves to the unnecessary search light of the Law Society. More painful is that I cannot even work for any employment agency or as a locum. Whilst many people have informed me that I have an impressive CV, they always concluded that, ‘I am afraid we want someone with a clean certificate’.”
[18]The submissions for the SRA may be summarised in this way. Mr Goodwin submits on behalf of the SRA that the conditions are “entirely reasonable, appropriate and proportionate”. He submits that the purpose of practising certificate conditions is regulatory and not punitive. Their imposition protects the interests of the public and the reputation of the profession and offers reassurance to both public and profession where a solicitor’s conduct has been called into question. He submits that it was appropriate for the adjudicator, in assessing whether to impose the conditions, to take account of the SDT’s findings; the fact that Mr Olufeko has not practiced since September 2005, his previous practising certificate history and his previous regulatory history. He submits that in light of all of those matters it was a reasonable exercise of the SRA’s discretion to impose the conditions on his practising certificate. He further submits that that remains the case notwithstanding the various courses and the like which Mr Olufeko has undergone in recent times. As to the distinction between the disciplinary role of the SDT and the regulatory role of the SRA, he relies on the decision of the Administrative Court in Camacho v the Law Society [2004] EWHC 1042 (Admin) and the decision of the Court of Appeal in Taylor v the Law Society [2005] EWCA Civ 1473.[19]In short, he submits that the SDT’s decision not to impose conditions does not deprive the SRA of its obligation to exercise the regulatory jurisdiction but recognises the fact that the SDT did not impose the conditions is a relevant circumstance to be taken into account but the position remains that it must make its own decision as regulator.

Discussion

[20]There are perhaps two issues in this appeal: first, the nature of the SRA’s jurisdiction to impose conditions and its relationship to the jurisdiction of the SDT and secondly, the question whether on the assumption that the SRA can properly impose such conditions in principle it ought to have done so in this case.

Jurisdiction and Relationship with the SDT

[21]The SRA’s jurisdiction to impose conditions is well established. I accept the submissions made on behalf of the Law Society, which I think are not contradicted by Mr Fortune on behalf of Mr Olufeko, that the SDT’s jurisdiction is a disciplinary one, whereas the jurisdiction of the SRA is a regulatory one based on the need to protect the interests of the public and the reputation of the profession. The position is made clear, I think, by the decision of the Administrative Court in Camacho. I should refer to two paragraphs of that decision which was given by Thomas LJ. Paragraphs 16(ii) and 16(iii) are in these terms:
“(ii) It was urged upon us, and we accept, that the Law Society in the exercise of its regulatory powers cannot bind itself to accept a recommendation from the Tribunal, exercising disciplinary functions, to impose a condition on a practicing certificate. The jurisdiction of the Law Society to impose conditions on practicing certificates is derived from its regulatory powers under sections 9- 18 of the Act which are quite distinct from the disciplinary powers under sections 46- 54. The Law Society has to consider the application for a practicing certificate on the materials available to it when the application is made. There is also a separate appeal procedure in respect of the imposition of terms -- first to an Adjudication panel and then to the Master of the Rolls. “(iii) As the tribunal is an independent body, separate and apart from the Law Society (with its combined duties of regulation and representation of the profession), we consider that in each case the Tribunal must address the question as to whether the public interest is served by its imposing a condition which it can be certain will be put into effect … Unless there are exceptional reasons, we consider that the Tribunal should impose itself the conditions it considers appropriate, as that is part of the decision it has made; if the defendant considers the conditions too harsh or wrong in principle, then as the imposition of the conditions is part of the penalty, the route of appeal should be that route that has been provided in respect of the penalty and not that provided in respect of the regulatory powers.”
[22]Mr Goodwin emphasises paragraph 16(ii) and Mr Fortune naturally emphasises paragraph 16(iii). I entirely see the force of Mr Fortune’s submission that the fact that the SDT is under a duty to consider whether to impose conditions which it considered appropriate by way of penalty is a significant factor -- to put it no higher -- which the SRA must take into account in exercising its regulatory function and deciding whether conditions should be imposed on a practising certificate. Nevertheless, the role of the two bodies is separate. The first is punitive or disciplinary and the second is regulatory and not punitive.

Application to the Facts

[23]The question is simply whether it was appropriate and within the regulatory discretion of the SRA to impose conditions on the 2006/2007 practising certificate or whether the decision to do so was in any respect unreasonable or disproportionate. It is plain from the reasons given by the SRA’s adjudicator that he took account of the decision of the SDT and it is plain that he must have taken account of the fact that no conditions were imposed. It appears to me that the adjudicator was entirely justified in imposing the condition that Mr Olufeko act only in employment or partnership or as a member office holder or shareholder of an incorporated solicitors practice. Although Mr Olufeko’s primary case is that no conditions at all should be imposed, it appears to me that, having regard to the history which I outlined earlier, after 1999, including, but not limited to, the decision of the SDT, it was entirely reasonable and proportionate for a condition to be imposed which would not have enabled Mr Olufeko to operate in sole practice as a solicitor. The SRA could reasonably conclude that he would require some support. On the basis that there is to be such a condition, Mr Olufeko does not object to conditions 2 and 3. Condition 2 was that he should inform any relevant person of the conditions and the reasons for their imposition, and that he should not act as a trading principal or supervisor for any trainee solicitor. It appears to me that there is no proper objection to those conditions at all.[24]So the question remains whether it was unreasonable or disproportionate to include as a condition that he may act as a solicitor only in employment or partnership and the like, the arrangements for which have been first approved by the SRA. I can understand that this may cause some difficulty for Mr Olufeko but it should not be a real difficulty because if the partnership or firm or entity which Mr Olufeko wished to join was, if I may call them, an ordinary firm without any regulatory or other history or the like, then there seems no reason whatever why his employment or partnership in that firm should not be approved by the SRA. The SRA could only refuse approval for good reason. If there is no good reason the position would be that they should, and no doubt would, give their approval. It appears to me that such a condition was entirely reasonable and proportionate. Although Mr Olufeko has indicated the problems that he has had, he has done so in very general terms. I cannot myself see why he should not be able to obtain employment or find a firm and why it should not be possible to find employment or a firm which will meet the approval of the Law Society. Once he has done so and once he has practised subject to the conditions for a reasonable period, I see no reason why the SRA should not remove the conditions in the future.[25]It follows that I have no alternative but to dismiss this appeal. I would only add that if Mr Olufeko applies for a future practising certificate in the future he should spell out in detail and with particularity precisely what attempts he has made with whom to obtain employment and the like. So while I have some sympathy for Olufeko and certainly wish him well for the future, I have really no alternative but to dismiss this appeal.

Order

Appeal dismissed.