Dean & Dean, R (on the application of) v The Law Society and Their Agents [2008] EWHC 2980 (Admin)

Case No CO/9641/2008[2008] EWHC 2980 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT
Venue Royal Courts of JusticeDate Thursday, 6th November 2008
Between
THE QUEEN ON THE APPLICATION OF DEAN & DEANClaimant
Strand
London WC2A 2LL
B e f o r e:
MR JUSTICE PITCHFORD
v
Between
THE LAW SOCIETY AND THEIR AGENTSDefendantComputer-Aided Transcript of the Stenograph Notes ofWordWave International LimitedA Merrill Communications Company190 Fleet Street London EC4A 2AGTel No: 020 7404 1400 Fax No: 020 7831 8838(Official Shorthand Writers to the Court)Mr Ian Ridd and Mr Peter Herbert (instructed by Messrs Radcliffes Le Brasseur) appeared for ClaimantMr Hodge Malek QC and Mr Andrew Tabachnik (instructed by Messrs Russell-Cooke) appeared for DefendantJ U D G M E N T
[1]MR JUSTICE PITCHFORD: The claimant Dean & Dean is a firm of solicitors. It is regulated by the Law Society, the defendant. This is an application for permission to apply for judicial review of the defendant's decision of 8th October 2008 to require the production of documents and information by the claimant firm. The claimant is represented by Mr Ian Ridd and the defendant by Mr Hodge Malek QC and Mr Andrew Tabachnik.[2]The information placed before me for hearing is contained in eight lever arch files, which I do not pretend to have read in full or anything like it. I was, at the outset of argument, reassured that it would be unnecessary to consider every single document and there is a good reason for that. I am in receipt of skeleton arguments from each side which draw my specific attention to those documents which need to be considered and the parties can rest assured that I have examined each of those documents together with several others.[3]The Law Society performs its monitoring, investigative and disciplinary functions through the Solicitors Regulation Authority. Dr Shahrokh Mireskandari is the senior partner of the claimant firm.[4]Complaints against solicitors are made to and investigated by the defendant's Legal Complaints Service. The LCS is primarily concerned with the quality of professional services provided by a solicitor and redress for a complainant where that is appropriate, following investigation. The Solicitors Regulation Authority (or SRA) is primarily concerned with investigation of alleged professional misconduct. While these functions are separated, investigation of professional misconduct may and often does arise from complaints received by LCS.[5]During the period 2003 to 2008 LCS received some 39 complaints about the firm and Dr Mireskandari. It is not suggested, and I have seen no evidence to the effect, that there is anything particularly unusual about a firm receiving complaints from disappointed clients. I mention the fact only to demonstrate that there were ongoing enquiries into such matters.[6]During the course of investigation of one or more complaints, the Casework Investigations and Operations Unit were led at first to focus upon Dr Mireskandari's qualification to practice as a solicitor in England and Wales.[7]On 3rd October 2008, Helen Stacey of the investigations unit wrote to Dr Mireskandari seeking a detailed response within 22 days to several specific questions relating to his background, his academic career and his applications for admission as a solicitor of the Supreme Court, for exemption from the Common Professional Examination Course and for a reduction in the period of the required training contract.[8]Three days later, on 6th October 2008, Investigation Officer Tracy Townsend presented a memorandum to Michael Calvert, head of forensic investigations at the SRA, seeking authority for the issue of notices under section 44B of the Solicitors Act 1974 and Rule 34 Solicitors Accounts Rules 1998. Ms Townsend was in overall supervision of ongoing investigation into complaints against the firm.[9]The power to issue a notice arises under section 44B and is described as follows:
"(1) Where the Council are satisfied that it is necessary to do so for the purpose of investigating: a. whether there has been professional misconduct by a solicitor; B. whether a solicitor has failed to comply with any requirement imposed by or by virtue of this Act or any rules made by the Council; C. whether any professional services provided by a solicitor were not of the quality which it is reasonable to expect of him as a solicitor; ... the Society may give notice to the solicitor or his firm requiring the production or delivery to any person appointed by the Society, at a time and place to be fixed by the Society, of all relevant documents in the possession of the solicitor or his firm."
[10]The solicitor's obligation to comply with a notice arises under Rule 34 of the Solicitors Accounts Rules 1998 which provides:
"(1) Any solicitor must at the time and place fixed by the Society produce to any person appointed by the Society any records, papers, client and controlled trust matter files, financial accounts and other documents, and any other information, necessary to enable preparation of a report on compliance with the rules. ... (8) Without prejudice to paragraph (1) above, any solicitor must produce documents relating to any account kept by the solicitor at a bank or with a building society: (a) in connection with the solicitor's practice; or (b) in connection with any trust of which the solicitor is or formerly was a trustee, For inspection by a person appointed by the Society for the purpose of preparing a report on compliance with the rules or on whether the account has been used for or in connection with a breach or any other rules, codes or guidance made or issued by the Council of the Society."
[11]Further obligations upon a solicitor receiving such a notice are imposed by Rule 20 of the Solicitors Code of Conduct 2007.[12]Michael Calvert was the individual responsible for making the judgment whether the issue of a without notice notice should proceed.[13]Tracey Townsend's memorandum summarised the investigations in respect of which she required access to documents in the firm's possession.[14](1) Angel Airlines The claimant firm was in dispute with the former client, Mr Azad about a solicitor and own client costs bill exceeding £400,000. In the course of his evidence before the costs judge, Dr Mireskandari made claims about his qualifications which the defendant was in the process of investigating. The costs judge commented during his judgment on 26th September 2005 that the firm had allowed the office account to be used for unusual purposes, namely the transfer of money between Mr Azad, Dr Mireskandari and Dr Mireskandari's brother. Thirdly, the costs judge made adverse findings about the authenticity of attendance notes and other documents produced and supported by Dr Mireskandari during his evidence. However, the proceedings involving Angel Airlines did not terminate in September 2005. They continued, as I shall describe in a moment, until 30th June 2008.[15](2) Brabners Chaffe Street LLB Complaint was received on 3rd June 2008 by LCS from the complainant Brabners Chaffe concerning the professional conduct of Dr Mireskandari while acting for the Tower Group of companies or at least some of them. One of those complaints concerned the alleged placement of clients' money not in the firm's account but in Dr Mireskandari's personal account and Dr Mireskandari's alleged use of his professional position to secure substantial loans from his clients for personal advantage.[16](3) Natela Grinina On 7th May 2008, Jack J gave judgment in the action Dean & Dean v Natela Grinina (claim 08/1470). The firm was seeking to recover solicitor and own client costs. It obtained a without notice freezing order against their former client without disclosing to the judge three significant facts which the solicitor's obligation to the court required. The affidavit sworn in support of the application was made by Dr Mireskandari.[17]Tracey Townsend brought to Mr Calvert's attention factors which in her view required urgent action to preserve relevant documents. She concluded her memorandum as follows:
"The reason for urgency is that there now appears to be evidence of dishonesty towards the Law Society by Dr Mireskandari as referred to in the EWW. Secondly, the press reports in the Daily Mail have alerted Dr Mireskandari and hence there may be a risk that material evidence may be interfered with and/or of flight. Thirdly, you will note that in some of the complaints there are suggestions that documents have been backdated or created for the purposes of litigation. Fourthly, clients reading the articles in the Daily Mail may be concerned to transfer their cases to other firms, in which case records may be removed. Fifthly, there is the suggestion that some files are already being removed, albeit this can be for entirely legitimate reasons, or to remove documents out of reach of persons investigating the conduct of Dr Mireskandari. You are aware that I am awaiting your decision to inspect the firm pursuant to Rule 34 Solicitors Accounts Rules 1992. Many thanks. If you have any queries, please speak to me."
[18]It was apparent that the press was aware from sources at present not known that Dr Mireskandari was indeed under investigation. The Law Society had received intelligence about the removal of files although, as I have just read from Ms Townsend's memorandum, she acknowledged that there might have been a purely legitimate purpose.[19]There was provided for Mr Calvert two bundles of documents called the Decision Makers bundle and the Inspection Bundle against which he was able to measure the merits of the application for authority to issue a notice which was being sought from him. Those bundles are largely contained in the eight lever arch files which have been presented for the purposes of this hearing.[20]Mr Calvert was particularly concerned about evidence that the firm and Dr Mireskandari were under financial pressure. It had, for example, been reported in the Daily Mail on 20th September 2008 that Dr Mireskandari was facing a bankruptcy petition. That turned out to be true. Secondly, during a judgment given by Coulson J in the Angel Airlines proceedings, the last in a long line of judgments given both at first instance and on appeal, handed down on 30th June 2008, it was observed that the firm was not meeting costs orders made against it.[21]Mr Calvert authorised the issue of the notice.[22]As a result of those proceedings and Mr Calvert's temporary absence from the office for personal reasons, the legal director of the SRA, David Middleton, took supervisory control of the Law Society's response to this claim and in performance of that role made a witness statement dated 17th October 2008 in which he reviewed Mr Calvert's decision. At paragraphs 48 and 49 of that witness statement he said this:
"48. I also respectfully suggest that it is clear that the circumstances were such that the manner and speed in which the Decisions were to be put into effect were justified. There were a number of reasons for the urgency, many of which are evident from the matters described above (such as financial pressure on the Claimant). The matters set out in the EWW letter raise serious questions about Dr Mireskandari's integrity, including his obtaining a qualification as a solicitor in the first place. In light of these matters and the extensive recent press coverage about Dr Mireskandari, there was a risk that material evidence might be interfered with and/or of flight. Risk of flight itself raises concern about the security of client monies. The SRA was also in possession of intelligence that files were being removed from the Claimant's office. Clearly, there could be an innocent reason for this but it is nevertheless a factor in an assessment of risk and urgency. 49. Once on site the SRA officers were prepared to agree to arrangements proposed by the Claimant to ensure that they caused as little disruption as possible. The fact that they were on site gave reassurance that any interference and/or tampering with files would be less likely. Advance notice of the Decisions could have prevented this. Further and in any event, the SRA officers were informed that some of the material being sought was not on site and would need to recovered and produced at a later date."
[23]There was available to both Mr Calvert and Mr Middleton other information about complaints made but the notice under section 44B was confined to the three subjects which specifically had been the subject of Ms Townsend's memorandum.[24]A copy of the notice dated 7th October appears at volume 1, tab 1, pages 1 and 2 of the hearing bundle.[25]Three SRA inspectors attended the claimant's offices at 10 o'clock on the morning of Wednesday 8th October 2008. They had with them the section 44B notice together with a letter of authority from Mr Calvert requiring the firm to comply with their request for the production and inspection of the firm's client account, books of account, bank accounts and other accounting documents for the period of the preceding six months.[26]Ms Turbin, a partner in the claimant firm, was served with the notice and letter and informed that the documents the subject of the section 44B notice were required that day. Dr Mireskandari arrived at about 10.50am and remarked that he was considering applying for an injunction against the SRA. At 12.30pm he was joined by his solicitor, Mr West of Radcliffe Le Brasseur. They informed the inspectors that they would in fact co-operate with the request for documents. Discussions took place concerning the production of documents but the inspectors were informed that by reason of lack of space they could not be accommodated to inspect the firm's accounting documents until Tuesday 14th October. In the meantime a timetable was agreed for the production of specific categories of documents.[27]As a result, and by agreement, the inspectors, Mr Mercer and Ms Townsend, returned at 2.00pm on Friday 10th October. After over a hour of waiting they were informed that Dr Mireskandari was at court. Some 12 boxes had been made available for collection and copying. Mr Mercer and Ms Townsend could see that the firm was not ready to make further production and they agreed to return to collect further files at 10.30am on Tuesday 14th October.[28]Without notice of any kind to the Law Society, let alone notice in writing, the claimant issued a claim form on 10th October seeking a judicial review of Mr Calvert's decision to authorise the notices to produce documents.[29]The details of the claim drafted by counsel sought interim relief and quashing of the notices, although the latter was not explicitly stated.[30]The grounds of claim in a nutshell were:(i) Since the letter of 3rd October required a response from Dr Mireskandari within 21 days the current notices constituted a circumvention of a process on which the Law Society had already embarked. It was therefore procedurally unfair.(ii) In the absence of a previous complaint known to the firm of a failure to comply with the solicitors accounts rules or concerning investment business, it was unreasonable to require production and inspection without disclosure of the nature of the complaint. It was therefore procedurally unfair.(iii) The requirement to produce documents within 48 hours was unreasonable and therefore procedurally unfair. Grounds purportedly based on Articles 6 and 8 of the European Convention have since been abandoned. It is to be noted that while the challenge was to the decision to seek production on reasonableness grounds, each individual complaint, as explained by Mr Ridd this morning, was directed to procedural unfairness and not to the principle.[31]These grounds are, I am satisfied, misconceived as they are drafted. The fact that Dr Mireskandari had been asked to provide a response to specific allegations about his conduct in no sense gave him any expectation that a demand would not be made for inspection of documents relating to the same or other matters. Second, whether or not Dr Mireskandari was aware of any relevant complaint was not material to the question whether the SRA was acting properly in seeking production without notice. The whole object of the exercise was the preservation of evidence. The question for the regulator was whether proper grounds existed both for the production of notices and second for the demand to be made without notice. I will return later to the suggestion of staleness.[32]On the evening of 10th October, Forbes J was the Queen's Bench duty judge. He received an application by telephone from counsel on behalf of the firm at 6.15pm. Attempts had been made to obtain a hearing during normal working hours but they were unsuccessful. Counsel informed the judge that an injunction was sought "to hold the ring until next week when the matter could come back before the court on notice ... I explained to the judge that I believed the SRA had been told of the application during the course of the afternoon but had not, as far as I was aware, been served."[33]Counsel was, of course, receiving her instructions from the firm and, in light of the fact that Dr Mireskandari made a witness statement on 10th October, I can infer from him personally at least at some stage during the day. That witness statement ran to 29 pages and I shall refer to it later.[34]Forbes J was, I am satisfied, misled in two important particulars. First, an injunction was completely unnecessary. No urgency attended the application since the investigators had already decided to leave the firm's offices to return on Tuesday morning. Second, it was untrue that the SRA had been informed of an impending application to the High Court for an injunction. On Mr Ridd's instructions, what was represented to the judge was the consequence of a misunderstanding. Someone in the firm acting for Dean & Dean received the impression that because the SRA inspectors had been told that Dr Mireskandari was in court that afternoon they therefore understood that he was in court seeking an injunction without notice. Had the judge been informed of these facts, which were in my view central to the merits of an application for interim relief in circumstances such as these, I entertain no doubt that he would have refused the application. As a matter of fact, he was not informed by counsel of any significant facts which might affect the merits of the claim which had been lodged that afternoon. In particular, in connection with demand for inspection of the firm's client account, it was not disclosed to the judge at least, as I can discern from the note made by counsel, that an application had been made to treat Dr Mireskandari as bankrupt.[35]Forbes J made an order that the effects of the SRA letter of 8th October should be stayed until a hearing of the Administrative Court at 2 o'clock on the afternoon of Monday 3rd October. The judge received an undertaking from the claimant's solicitors that the order would be served as soon as reasonably practicable. In fact it was not served until the morning of Monday the 13th. The witness statement of Dr Mireskandari was not served until about 12 noon.[36]Counsel had to be instructed by the defendant unprepared and without knowledge what information had been provided during the hearing before Forbes J. Since counsel who made that application before Forbes J had not yet made a note available, Stadlen J must have been unaware of the full picture.[37]In view of the unpreparedness of the defendant for the hearing on Monday 13th October, Stadlen J was persuaded to adopt a conciliatory approach to the application and made orders for production of certain documents for inspection and copying. Otherwise, however, the effect of the notices was to remain stayed until this hearing. The Law Society was ordered to file an acknowledgment of service and evidence concerning interim relief by 4.00pm 16th October with the claimant to reply by 4.00pm 30th October.[38]Both outstanding applications, that is for permission and for continuation of the interim order, were adjourned to the first open date after 5th November, which explains how the matter now appears before me.[39]I shall have something to say about this sequence of events later in this judgment.[40]Counsel's note of the hearing before Forbes J was not provided to the Law Society until 17th October. Full disclosure of the Inspection Bundle was provided by the Law Society to the firm.[41]In his witness statement of 10th October 2008, Dr Mireskandari argued that there was no urgency about the investigation concerning the Angel Airlines complaint. He asserted his belief that he was being victimised on the ground of racial discrimination. He expressed a belief that he was being targeted as a result of(1) his firm's work to expose the Law Society's discrimination towards black and ethnic minority solicitors and(2) his complaint of racial and religious discrimination to the Employment Tribunal. He identified the report of Lord Herman Ouseley, published on 14th August 2008 as the culmination of the efforts of himself and others. That report appears at volume 3, tab 11 of the hearing bundle. It is entitled "Independent Review into Disproportionate Regulatory Outcomes for Black and Minority Ethnic Solicitors". It is the result of work carried out at the request of the SRA itself following publication in January 2006 of the Law Society's report "The Impact of Regulatory Decisions of the Investigations and Enforcement Unit on Black and Minority Ethnic Solicitors". Lord Ouseley's conclusion in summary was that the SRA could and should do more to ensure that its investigative powers were not used disproportionately against the minority.[42]Dr Mireskandari went on to accuse the defendant of making private and public attacks on him through the press and by its investigations since on 19th May 2008 he had issued his claim in the Employment Tribunal. Of the information allegedly provided by the defendant to the press, particulars of which appear at paragraphs 46 to 58 of Dr Mireskandari's first witness statement, the response of the Law Society was to conduct an internal enquiry. Mr Middleton, in his evidence at paragraph 70 of his witness statement, said that, having made enquiries of those individuals at the SRA whom he considered might be aware of information arising from the investigation, he could find no evidence of any leak to the national press of confidential information concerning that investigation. He also turned his mind to the question, well, if these allegations being made in the press did not come from the SRA, from what source may they have come and the result of his consideration is contained at paragraph 73 of his witness statement. He observes that some of the information could have been obtained by routine enquiry. Secondly, the SRA had been approached by a number of individuals who had provided information as complainants. There were judgments in the public domain expressing concern about either the firm or about Dr Mireskandari himself. It was likely, thought Mr Middleton, that complainants were in touch with each other and making their own enquiries. By way of example, the SRA received a letter from one interested person in which she said that a complainant had been to America to try "and trace the false credentials of" Dr Mireskandari.[43]Dr Mireskandari continued that the present action was being pursued in order to frustrate his attempts to bring discriminatory practice by the Law Society into the public domain. He sought to demonstrate at some length an inequality of treatment between complaints made against him and his complaints made against others. He concluded with the following words:
"59. In all the circumstances, it is clear to me that I have been the target of disproportionate and discriminatory action by the SRA. I believe that this is a clear case of victimization as I have put my head above the parapet and spoken out on behalf of BME solicitors, thus exposing the SRA to criticism. 60. I believe that the investigation has been improperly conducted and there are serious concerns about the SRA's motives. While I would accept that I should not be exempt from disciplinary action where the same is merited, I believe that any investigation should properly be carried out by an independent and impartial person and that it should not be influenced by my campaign or the Employment Tribunal proceedings or by bias or racism."
[44]Far from supporting the grounds of claim drafted by counsel this witness statement made an all out attack on the good faith of the Law Society when issuing its notices.[45]Although I am told by Mr Ridd on his instructions that a copy of this witness statement was before counsel when she was addressing Forbes J by telephone, I find no reference in counsel's note of the hearing to any such assertions. Furthermore, Forbes J did not, as one would expect if specific reference was made to a witness statement, obtain an undertaking from counsel for the service of the witness statement upon the defendant on the first available opportunity. The only reference to the grounds of the application are contained in the following sentence of counsel's note:
"The judge and I discussed the merits of the challenge to the exercise of the SRA's powers on grounds of reasonableness and under HRA."
These words are exactly what I would have expected if counsel was relying on the grounds as pleaded in the details of the claim but nothing like what I would have expected if counsel had informed the judge that the underlying ground was victimisation on racial grounds.[46]Dr Mireskandari's second witness statement is dated 31st October 2008. It is made in response to the evidence served by the defendant including the Inspection Bundle. by 17th October 2008 the defendant, in view of the accusations being made, was required to review its decisions internally and for that purpose considered a great deal more material than had been placed before Michael Calvert when he issued the notices. They included first a complaint concerning his Dr Mireskandari's evidence at the Employment Tribunal in a claim brought by a former employer, secondly a complaint concerning an alleged misrepresentation to a public relations consultant in an attempt to disseminate misleading information to the press, thirdly a representation to counsel instructed by the claimant that the firm was not in a financial position to pay counsel's fees and fourthly complaints by two separate firms alleging dishonesty and breaches of the money laundering regulations.[47]In his second witness statement Dr Mireskandari acknowledged the existence of a bankruptcy hearing. It is now scheduled to take place in January 2009. He said it was to be contested because he was not in financial difficulty, although I note that the petition has been issued in support of a judgment debt of £265,000.[48]He descended to detail in response to the documents disclosed to him. They amount to Dr Mireskandari's answers to the complaints which are said by SRA to be causing it urgent concern.[49]The fact that Dr Mireskandari needs to descend to detail, to make justification, to make accusations of dishonesty and unreliability against others, including members of his own profession, simply serves in my view to undermine his case that the Law Society has issued its notices for unmeritorious and contrived reasons. In particular, Dr Mireskandari has in his second witness statement sought to assure the court by evidence contained within it and by documents exhibited to it that both he and the firm are substantially sound.[50]The production and intervention powers of the Law Society to investigate suspected malpractice by members of the profession are far-reaching. They are, Parliament has decided, necessary for the protection of the public and of the profession. They must, of course, be exercised fairly and on proper grounds. Once properly invoked it is the duty of the solicitor to comply. I accept the submission made on behalf of the defendant that, where the Law Society has proper grounds to make an investigation, the purpose of the investigation is frustrated if the society is required simply to accept the assertion of the solicitor that all is well without access to the source documentation which they need to investigate in order to ascertain whether it is the complaint or the answer to the complaint which is the true version.[51]The issue for me upon the arguments addressed is whether the claimant has an arguable case that the Law Society is seeking to use its powers not on fair and proper grounds but to victimise Dr Mireskandari for his outspokenness on behalf of black and minority ethnic solicitors.[52]It seemed to me that the grounds as formulated in the claim do not even nearly reflect the allegation now made but the Law Society does not apply to defeat the claim on the ground that the claim is defectively drafted. I have therefore received from Mr Ridd an application to amend the claim to add the following as paragraph 25A of the details of claim:
"The claimant contends that the real reasons for making the Decisions were (i) because on 19.5.2008 he had issued proceedings against the Defendant in the Employment Tribunal, alleging discrimination on racial and religious grounds and (ii) because he was instrumental in commissioning the report by Lord Ouseley into potential discrimination by the Defendant."
Having at some length rehearsed the facts even in summary, I now come to my conclusions.[53]The interim order from Forbes J was obtained upon partial and misleading information as to the urgency of the application and the grounds and strength of the claim. I make no criticism of counsel, about whose state of knowledge I am on the evidence unaware.[54]That state of affairs was not corrected during the hearing before Stadlen J.[55]As a result the purpose of a without notice inspection has already been frustrated.[56]The grounds upon which the Law Society formed its suspicions were substantial. I make it plain that this does not involve a judgment upon the accuracy or truth of the complaints nor does it involve the drawing of concluded inferences adverse to anyone. The sole question is whether the defendant had proper grounds upon which to issue the notices it did. Answers such as those Dr Mireskandari may provide could have been anticipated. That is why exercise of the power of production was required. As Dr Mireskandari has himself acknowledged, he should not be exempt.[57]I have found nothing in the preparation or execution of the notices which remotely justifies a suspicion, let alone an inference, that the defendants may have acted for oblique motives. As the defendants have demonstrated, I am satisfied, they were forced to act in response to information from several different sources and to the fact that information was appearing in the newspapers which might prejudice their inquiries if they delayed, information which they were continuing to receive until days before the notices were issued.[58]Thus it is my conclusion that the claimant has no prospect of a successful claim. The application for permission is refused.[59]It follows that the interim orders made by Forbes J and Stadlen J will be discharged.[60]MR MALEK: My Lord, I have had the opportunity of discussing the consequential relief with my learned friend. If I can hand up a draft order.

MR JUSTICE PITCHFORD: Yes. (handed)

[62]MR MALEK: The order is agreed apart from the question of costs and subject to a letter which we were given five minutes before you came into court from the other side.

MR JUSTICE PITCHFORD: Sorry, would you repeat that?

[64]MR MALEK: Everything is agreed, subject to two things: one is costs and two is a letter that we were handed five minutes before you came in this afternoon from Radcliffes notifying us that Mr Mireskandari is going to take a three month sabbatical and that he will not be involved in the firm, but the letter does have some disturbing or potentially disturbing issues which I want to ventilate before your Lordship, so we have no doubt about where these documents are. As the letter infers, Mr Mireskandari is going to keep or have in his possession the key documents we want.[65]So if I can hand up the letter and let us sort that out first. (handed)[66]It is not clear whether he is still claiming to be a doctor but it says he is now Mr Mireskandari. It says:
"We are instructed to inform you that [he] has decided to take a sabbatical for a period of at least three months in order to devote his time to preparing his response to the allegations which the SRA has made against him."
And then, "The sabbatical, which commenced today, has the following effects". Number 5:
"Mr Mireskandari will not have any documents in his profession relating to the practice of Dean & Dean save to the extent that the documents are needed to answer the allegations which the SRA has made against him or for the purpose of giving evidence in any of the Court proceedings relating to him."
Then the next page, if you look towards the bottom: "We categorise the additional allegations made by the SRA which Mr Mireskandari intends to respond to as follows..." and they list the six matters that we are concerned about and obviously one of the problems with the injunction is that we were not able to serve further section 44 notices in respect of the additional matters and we want to be absolutely clear before we leave today what these documents are and are they the documents which are the subject matter of the order.

MR JUSTICE PITCHFORD: You mean of my order?

[68]MR MALEK: I am sorry?

MR JUSTICE PITCHFORD: Of what order?

[70]MR MALEK: Well, you have given the order that the claimant complies with the two notices. That is in the draft order. There is -- because the two notices have been upheld, the other side have agreed that there should be an order that they comply with the two notices and the notices require production of all -- the accounting records --[71]MR JUSTICE PITCHFORD: I think perhaps you did not appreciate, Mr Malek, that I have not received this until you handed it up to me. All I have ordered so far is that the interim orders already made be discharged.[72]MR MALEK: Yes. But from my point of view I do not want to have a situation where we leave today, we go to Radcliffes to pick up all the boxes and then we are told actually Mr Mireskandari personally has X, Y and Z.[73]MR JUSTICE PITCHFORD: Well, there is no difficulty with this. All that needs to happen is that the documents are copied.[74]MR MALEK: Yes. If that is said in court then we are happy.[75]MR RIDD: My Lord, I am being obtuse. I am not following my learned friend's difficulty.[76]MR JUSTICE PITCHFORD: Well, I am. It is being suggested that Mr, as his solicitors now call him, Mireskandari is saying that he is going to retain any documents which he needs in order to answer the request made of him.[77]MR RIDD: Copies of them, I am sure, is all that is meant by that.[78]MR JUSTICE PITCHFORD: He is, of course, not to be put in a position in which he is unable to answer statutory requests because he is not in possession of the documents.[79]MR RIDD: My Lord, that is right.

MR JUSTICE PITCHFORD: But his obligation is to make them available immediately to the investigator.

[81]MR RIDD: My Lord, they are bundled up in my instructing solicitor's basement. So I see, and I can state, that is no derogation from any willingness on the part of the firm or Dr Mireskandari to comply with the order. I think all that is being said in this letter, which I have only just seen myself, is that he is withdrawing from the firm. He will have none of the firm's documents except copies of those which he needs to deal with so that he can deal with the allegations made against him.

MR JUSTICE PITCHFORD: No difficulty with that?

[83]MR MALEK: Well, as long as it is on the record, and it will be on the record, that he is not going to take away any original documents from the firm and if he is going to take anything away it should be copies, because if we go, let us say tomorrow, with a section 44B notice in respect of the Voice matters we do not want to be told actually the Voice files are in Mr Mireskandari's home.

MR JUSTICE PITCHFORD: Well --

[85]MR MALEK: And if they are willing to say he is only going to take copies and the originals will stay then we have no difficulties.

MR JUSTICE PITCHFORD: Well, I think that is what has been said, Mr Malek.

[87]MR RIDD: Well, my Lord, yes.[88]MR MALEK: That is fine.[89]MR RIDD: My solicitor nods. Yes.[90]MR MALEK: If those are on instructions and --[91]MR JUSTICE PITCHFORD: The firm is undertaking that Mr Mireskandari will not be given possession of original documents. He will be given possession of any copies he requires for the purpose of preparing his responses.[92]MR RIDD: I am not sure there is any member of the firm here present who will authorise me to give -- would your Lordship forgive me one moment. (pause)[93]The gentleman behind me is a trainee, my Lord. I really do not -- my Lord, I really do not see a difficulty with this. I am not in a position to give an undertaking on behalf of the firm. My Lord, this letter was written by my instructing solicitors in absolute good faith, I have no doubt, and, my Lord, I can really say no more than that.[94]MR JUSTICE PITCHFORD: Right. Well, I think what I am going to say in respect of this kind of issue, since I have to remember that I am not supervising the defendant's inquiry into your client, I am not supervising a freezing order or the following of assets, all I have been asked to do is to rule upon the prospect of permission. If you think that taking further proceedings is necessary, I am prepared to say liberty to apply but only to a very limited extent. I think what you will have to do, if you come across any further difficulties, is to make a fresh application.[95]MR MALEK: Can I put it this way, that we should have the claimant to notify us by lets say 10 o'clock tomorrow what is the status of these documents and to confirm Mr Mireskandari would not have any original documents.[96]MR JUSTICE PITCHFORD: Now, the more I think about it, Mr Malek, the less inclined I am to get into the details because I am not seized of the factual situation behind the arrangements for production of documents. You have heard from Mr Ridd that he anticipates no difficulty at all. You have heard my view about it. If you do come across any obstruction then no doubt you will take the normal steps which the Law Society does to overcome them.[97]MR MALEK: If I can go through the order, apart from the costs, the first is the application for permission is refused. Two we will come back to. Three is the claimant's solicitors shall forthwith deliver up the documents held by them and they have agreed we can come round after court today to collect those and we will do. Four is paragraphs 2 and 3 of the relevant order of Stadlen J are discharged and we are released from the undertakings that we gave and five is the injunctions are set aside.

MR JUSTICE PITCHFORD: Yes.

[99]MR MALEK: Then further it is declared that the notices are lawful and valid and it is ordered that the claimant complies with the two notices and that is agreed between us.

MR JUSTICE PITCHFORD: Yes.

[101]MR MALEK: If I go back to the question of costs, firstly I would ask for costs of the applications. I very much doubt that is opposed and then the question will be on what basis, whether it is going to be on an indemnity basis or on the standard basis, and I submit that this is an appropriate case for costs on an indemnity basis for the reasons effectively given by your Lordship, which is that the grounds in the claim form were totally misconceived; Forbes J was misled in a number of respects and, had he been told the correct position, you do not consider he is likely to have made the order; there has been a complete change of their case from the claim form to the one in the skeleton argument or Mr Mireskandari's statement; and a very high and serious allegation has been made which is that the SRA issued the notices for false and contrived reasons and you found that not correct; finally, you said that the purposes of the without notice inspection have been frustrated. So in my respectful submission this is an appropriate case for indemnity costs.

MR JUSTICE PITCHFORD: Mr Ridd?

[103]MR RIDD: My Lord, I do not oppose the application for costs, my Lord, because of the application for judicial review, nor, my Lord, do I oppose there being an order for costs in respect of the costs reserved before Forbes and Stadlen JJ. My Lord, it would be, however, in my submission, that the costs should be on the standard basis rather than on the indemnity basis.[104]The first point that I would invite your Lordship to make is to distinguish between the costs of the underlying interim relief, the injunctions before the two other judges, and the costs of the application for permission. Your Lordship has made findings that the application before Forbes J proceeded on a partial and incomplete basis. My Lord, that is, of course, inherently a criticism of the conduct of the litigation and if your Lordship were minded to make an order for indemnity costs it would be in my submission that it should be limited to the costs of the claims before those two judges, both of which were reserved.[105]My Lord, so far as the application for permission itself is concerned, I would invite your Lordship to say that there is not sufficient departure from the norm in the case of that application to justify an order other than on the standard basis. Your Lordship appreciates the first question that is posed when there is an application for costs on the indemnity basis is is there something that takes this case out of the ordinary and, my Lord, usually that is connected to some complaint about the way in which the litigation has been conducted. My Lord, the making of a serious allegation and being unsuccessful in it is in my submission not of itself sufficient to take the case out of the norm.[106]So, my Lord, those are my submissions. I invite your Lordship to look separately at the claim for interim and at the claim for permission to apply for judicial review and, my Lord, certainly in respect of the latter I would urge your Lordship to order only that there should be costs on the standard basis.[107]MR JUSTICE PITCHFORD: Thank you very much. Mr Ridd, you could not have put that submission either better or more moderately. Thank you very much.[108]In view of the findings that I have made as to the conduct of the claimants in the pursuit of this litigation, in particular the strategy used to frustrate the obvious purpose of the inspection and production notices, the incomplete information provided to the judges required to hear the applications for interim relief and for the sea change in the basis upon which the claim was put between 10th and 13th October 2008, neither of which have I concluded have the slightest merit, I have come to the conclusion that this is an exceptional case in respect of which the Law Society should have its position protected by an order for costs assessed on an indemnity basis, both in their defence to the claim and in their responses to the application for interim relief.[109]MR MALEK: My Lord, the next question is whether it should be a summary assessment or a detailed assessment. I can say that certainly our preference is for a summary assessment, as shown by the Angel Airlines litigation, which has gone on for years and years about the assessment of costs in that case. We would rather have a figure today --

MR JUSTICE PITCHFORD: And you have a summary of costs?

[111]MR MALEK: Yes, we do, which we served on the other side. If I can hand that up.

MR JUSTICE PITCHFORD: And is this calculated on an indemnity basis?

[113]MR MALEK: Can I just check? (pause) These are our costs, so effectively it would be an indemnity basis.

MR JUSTICE PITCHFORD: And you are asking for £5,356.24.

[115]MR MALEK: No, that is the one for yesterday. That has already been ordered. Today's costs are much greater. If I can hand up the -- oh, you have the schedule there. You will see that there has been a great deal of time that has been devoted to this case since 13th October. There is voluminous evidence and explains the figure that we have here.

MR JUSTICE PITCHFORD: Mr Ridd, do you have anything to say about the time spent, first of all?

[117]MR RIDD: My Lord, may I -- I will answer that question. May I tell my Lordship that my submission would be that I would invite your Lordship not to conduct a summary assessment today but to order that there should be a detailed assessment but that there should be a payment on account of costs made within 14 days. My Lord, my reasons for making that submission are that the figures on these sheets, my Lord, are eye watering and, my Lord, it is my submission that they are obviously, with respect and deference to my learned friends, unreasonable and disproportionate and, my Lord, my starting point, again with due deference to my learned friends, is this is a case that did not require two counsel. My Lord, it is a case that was, I think, soothingly described in yesterday's skeleton argument for the application to adjourn, that this case did not involve complex legal principles and, although there were a deal of documents, the facts were in fact within a small compass and easy to marshal.[118]My Lord, in those circumstances I would submit, firstly, that there should not have been two counsel and, my Lord, I would submit that there should not have been leading counsel. When I say there should not have been, I mean simply that the costs should be allowed for that lavish level of representation.

MR JUSTICE PITCHFORD: What, when accusations of this nature are being made?

[120]MR RIDD: My Lord, they are serious accusations but they do not involve legal -- this is only an application for permission; they do not involve complex legal principles, they involve no principles of law at all and, my Lord, the factual matters, on any showing, and as the hearing this morning demonstrated, fell within but a small compass. So, my Lord, that is why I would say that these are matters that ought not to be dealt with summarily at the end of a long day.[121]MR JUSTICE PITCHFORD: You also do not have a rejoinder to Mr Malek's reference to other cost assessment proceedings in which the claimants have been involved because I would presume that it is not Dean & Dean who would be taking part in the assessment of costs, it would be those now instructing you.[122]MR RIDD: My Lord, absolutely so. My Lord, the point I am making is that these are such large figures that, my Lord, this is not really appropriate for a detailed assessment. These are matters that should have the more leisurely and focused attention of a -- sorry, other way round, should not be a summary assessment, there should be a detailed assessment and, my Lord, the figures are simply eye watering.

MR JUSTICE PITCHFORD: All right.

[124]MR MALEK: My Lord, it is an entirely a matter for you as to whether you feel it is better to let it go for a detailed assessment or to make a summary assessment today and, of course, if it is a detailed assessment we will be asking for a payment on account. My real concern is that if it is not dealt with now the pattern of litigation -- we are on our fourth judge already on this case -- is that this is just going to lead to protracted litigation over the level of costs, just as in the Angel Airlines. I fully respect the fact that Radcliffes will be on the record but they will be doing as instructed, as they have done in this case, on behalf of the firm and it is a pattern of how the firm deals with costs. So we are very concerned about this going off to a detailed assessment. Further, this is a case that has lasted half a day, and -- well, maybe a whole day because your Lordship has been working on the judgment -- but cases lasting a day or less, ordinarily the practice is that costs should be summarily assessed.[125]My learned friend's main objection seems to be that the figures are high and he is saying, well, there is a relatively small amount of material to look at but the fact is, in order to condense everything into a manageable form, as we have done in our skeleton argument, takes a great deal of preparation. It is only because both sides prepared this case very carefully and put in a great deal of work, that it has actually been a very smooth hearing. It is not reflection of the fact that it is very easy to prepare a case like this, it certainly is not -- (pause) and this is the costs of the whole action. The action is over, so all the issues have been considered and put into the work for this hearing. So these are my submissions on whether it should be assessed today or go off to detailed assessment.

MR JUSTICE PITCHFORD: Thank you very much.

[127]I shall make an order that the defendant's costs shall be the subject of a detailed assessment. I accept the submission made on behalf of the claimant that, while a great deal of work has been rendered necessary, we are dealing with sums of some magnitude in respect of which the knowledge and concentration of a costs judge are required. There shall, however, be an order for the interim payment of part of these costs and the sum that I shall order will be paid within the next 14 days is £70,000.[128]MR MALEK: I am obliged. My Lord, we will provide the draft order for your consideration later on, shall we -- tomorrow morning?

MR JUSTICE PITCHFORD: Would you make it available for me some time tomorrow morning?

[130]MR MALEK: Yes, of course.

MR JUSTICE PITCHFORD: Thank you very much.

[132]MR MALEK: Thank you very much.