Deputy Chief Legal Ombudsman v Young [2011] EWHC 2923 (Admin)

[2011] EWHC 2923 (Admin)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

THE ADMINISTRATIVE COURT

Venue Royal Courts of Justice

Date Monday 14 November 2011

Strand

London WC2A 2LL

B e f o r e:

MR JUSTICE LINDBLOM

Between

DEPUTY CHIEF LEGAL OMBUDSMANClaimant

HOWARD ROBERT GILLESPIE YOUNGDefendant

Computer-Aided Transcript of the Stenograph Notes of

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Philip Havers QC (instructed by General Counsel, Legal Ombudsman) appeared for Claimant

Mr Young appeared in person for in person

Hearing Hearing dates: 10, 13, 27 May; 7 Oct; 14 Nov 2011

Judgment

Introduction

[1]In these proceedings the claimant, the Deputy Chief Legal Ombudsman for England and Wales, Mr Gary Garland, ("the ombudsman") requested the court,(i) under s.149(3) of the Legal Services Act 2007 , to inquire into the case of the defendant, Mr Howard Young, a solicitor who practised at one time in the firm of CMG Law in Bolton and later at Stirling Law in Oldham, and

(ii) under s.149(4) of the 2007 Act, to "deal with" the defendant for his alleged default on the requirements of a notice issued by the ombudsman under s.147 of the 2007 Act, as if he were in contempt of court. At a hearing on 7 October 2011, having considered all the evidence and submissions on either side, including the defendant's mitigation, I was able to conclude my inquiry into his case. I dealt with him for his default, imposing on him a fine of £5,000, which is to be paid by 4 January 2012, and to pay the ombudsman's costs, in the total sum of £15,550, by 7 December 2011. I now give my full reasons for granting the ombudsman's application.

Background

[2]The ombudsman has had to investigate a complaint about legal services provided by the defendant to Mr and Mrs W. The complaint was made by Mr and Mrs W in October 2010. By the notice he issued under s.147 of the 2007 Act the ombudsman required the defendant to produce specific documents, files and bills, which the ombudsman considered were necessary to enable him to determine the complaint. The defendant failed to comply with that requirement. On 24 January 2011 the ombudsman submitted a report to the Solicitors Regulation Authority ("the SRA") under s.s 143, 145 and 148(2) of the 2007 Act, stating, among other things, that he believed the defendant had failed to comply with the requirements imposed on him by the s.147 notice. The documents required were still not produced. The ombudsman considered the defendant to be a defaulter, as defined by s.149 of the 2007 Act, and duly certified that he had failed not only to provide the information he had been required to provide and to produce the documents he had been required to produce but also to give any good reason or excuse for that failure.

Mr and Mrs W's complaint

[3]The complaint that had been made against the defendant was described in paras 12-20 of the ombudsman's report:

"12. [Mr and Mrs W] complained to [the ombudsman] on 15 October 2010. They told [the ombudsman] that they had complained to [the defendant] on 1 September 2010, but had had no reply. What follows in paras 13-19 is a summary of the facts and information they provided. "13. Their complaint was that they had been dealing with [the defendant] at his practice at a firm called CMG Law in respect of two cases: an employment tribunal case and an insurance matter. CMG Law's address was 94 Chorley New Road, Bolton, … "14. The tribunal case had been running for around 18 months. A hearing had been due on 13-15 September 2010. Owing to a sudden death in the family they had instructed [the defendant] to apply for an adjournment. They were informed by [the defendant] that the adjournment had been granted and that they should wait a few weeks and then contact him again. "15. They did as advised, but when they tried to get back in touch they got no response. They complain they tried for a month, calling every day, sometimes leaving messages. They also sent e-mails which again received no response. "16. During one call made, as they thought to CMG, they realised that they were speaking to a firm called BYL. That firm told them that CMG were not in practice any more and that [the defendant] was working there at BYL. In a later call BYL informed them [the defendant] no longer worked there and that BYL held no forwarding address for him. A person at BYL identifying himself as Mr Goldstone explained that [Mr and Mrs W]'s papers were not held at BYL and that he did not know where they were. "17. [Mr and Mrs W] had paid [the defendant] £500 on account. They have not received a bill, and are concerned as to where the money is or how it has been spent. "18. The second case handled by [the defendant] on their behalf was a claim on an insurance policy that they had instructed [the defendant] to make. They were told that after a certain period of time he could commence litigation to get the money they were owed under the policy. This time period has expired and they believe no litigation has begun, and that little if anything has been done to progress their claim … "19. [Mr and Mrs W] were and are very concerned about the situation. They need their papers back urgently so they can progress the employment tribunal case and insurance claim (which appears to me to be likely to be some sort of mortgage protection insurance). They were and are relying on the insurance payment to service the mortgage on their home. The delays and stress are causing them sleepless nights. "20. Of course if the papers show that [Mr and Mrs W]'s position in either of the employment case or the insurance claim has been adversely affected by the delay and failure in communication they will, I anticipate, seek a remedy for that."

The ombudsman's investigation

[4]The ombudsman's report then described the steps which had been taken in the investigation of the complaint.

[5]From the outset, progress was hampered by a persistent lack of response from the defendant to messages and requests in which the ombudsman sought his co-operation. Once the ombudsman had satisfied himself that the complaint fell within his jurisdiction, he tried to get in touch with the defendant. This proved difficult. At this stage the SRA said that it thought CMG Law was still operating and that the defendant still held a valid practising certificate. However, when a member of the ombudsman's staff spoke to a Ms Lord, the practice manager at BYL Law, she said that CMG Law was no longer operating, and that the defendant had worked at BYL Law as a consultant for about four or five weeks but had left on 11 October 2010. Ms Lord also said that the defendant had told BYL Law that he had notified the SRA of what he was doing and that he had told BYL Law he was going to join another firm. The ombudsman's staff also recorded that Mrs W had said that she had been unaware of any of this until she was told it by BYL Law. It seemed clear, however, that the defendant had files belonging to Mr and Mrs W which he had not released.

[6]On 12 November 2010 the ombudsman told the SRA what he was doing and asked the SRA what it was doing about the defendant's activities. The ombudsman decided, however, that Mr and Mrs W's complaint ought still to be dealt with, even though the defendant had now been reported to the regulator. Therefore, on 16 November 2010, the defendant's case was allocated to Ms Caroline Sansoy, an investigator in the Ombudsman's Resolution Centre. Ms Sansoy's task was to investigate the complaint, to obtain the defendant's observations and to get hold of the necessary factual information and documents. If she could, she would help both sides to reach an amicable and informal resolution of the complaint. If this was not possible her task was to prepare a report on her investigation, give both sides an opportunity to make representations, and then submit those representations and her report to the ombudsman. The ombudsman would then be able to make a decision on the complaint. Ms Sansoy needed the relevant papers and preferably the defendant's observations on the complaint if she was to make progress with his case. She discovered that the defendant was now working at Stirling Law at Greengate Business Park in Oldham. She telephoned Stirling Law, and left messages asking the defendant to contact her. The defendant did not respond. On 18 November 2010 Ms Sansoy sent a message to the e-mail address which had been given to her by Stirling Law, marking it for the attention of the defendant and asking him to get in touch with her. In her e-mail she explained who she was and what she was doing. Again the defendant did not respond. On 30 November 2010 Ms Sansoy tried again to get in touch with the defendant, both by telephone and by sending another e-mail to Stirling Law. This time she used a personal e-mail address for the defendant. Again she received no response. On 8 December 2010 Ms Sansoy spoke to a member of Stirling Law's staff, requesting that the defendant call her back without delay. She asked whether the defendant had taken Mr and Mrs W's file with him from CMG Law to Stirling Law, but the person she spoke to could not answer that question. No return call came from the defendant. On 14 December 2010 Ms Sansoy sent a letter to the defendant reminding him of what he had to do to co-operate with the ombudsman's investigation and asking him to respond within seven days. The defendant did not respond.

[7]On 17 December 2010 the Chief Legal Ombudsman, Mr Adam Sampson, wrote personally to the defendant seeking to impress on him the need to respond and warning him of some of the possible consequences of his continuing to fail to communicate with the ombudsman. On the same day Mr Sampson also wrote to Mr Glynn Willmott, the senior partner of Stirling Law. Although the ombudsman's report said there was no reply to Mr Sampson's letter of 17 December, there was in fact a reply. It came from Mr Willmott in a letter dated 22 December 2010, in which he said that he and the defendant had understood from Mr and Mrs W that their complaint had been withdrawn and that this was why the defendant had not responded sooner. Mr Willmott also said in his letter that the defendant was due to see Mr and Mrs W that day, that Stirling Law expected it to be confirmed that the complaint had been withdrawn, and that they would write to Mr Sampson again after the defendant's meeting. No such letter was ever received by the ombudsman.

[8]On 10 January 2011 Ms Sansoy spoke on the telephone to a receptionist at Stirling Law, leaving a message in which she asked for either the defendant or Mr Willmott to call her back to confirm that the letter of 17 December 2010 had been received and to explain what they intended to do. The receptionist told Ms Sansoy that both the defendant and Mr Willmott were in the office, but that neither was available to speak to her. Neither the defendant nor Mr Willmott returned Ms Sansoy's call. On 11 January 2011 Ms Sansoy sent an e-mail to Mr Willmott. Again she asked Mr Willmott to get in touch with her and reminded him of his responsibilities as the defendant's senior partner. She said, as she obviously believed, that neither Mr Willmott nor the defendant had communicated with the ombudsman. No reply to that e-mail was ever received.

The s.147 notice

[9]Eventually therefore, on 14 January 2011, the ombudsman issued the s.147 notice, giving the defendant ten days to comply.

[10]The ombudsman's report explains what then happened. The s.147 notice was passed to Mr Rich, the solicitor and general counsel to the Office for Legal Complaints of the Legal Ombudsman. Mr Rich served the notice, together with a letter explaining how serious the situation now was. Both the notice and the letter were attached to an e-mail, marked "High Priority", which explained their importance. The e-mail was sent to the defendant on the day the notice was issued. The e-mail prompted an automated response saying that delivery to the recipient's address was complete but that no notification of delivery had been sent by the destination server. There was nothing, however, to suggest that the e-mail had not been delivered. The ombudsman said in his report that he therefore believed that the s.147 notice had been properly served on the defendant. On the same day Mr Rich also sent a hard copy of his letter and of the s.147 notice to the defendant by first class recorded delivery post. That letter was not returned as undelivered. The ombudsman was therefore satisfied that the s.147 notice had been served on the defendant even if he had not received it by e-mail. The ombudsman said in his report (in para 40) that no response had been received to the s.147 notice or the letter that went with it.

[11]The documents the defendant was required to produce were specified in schedule 1 to the notice. They were:

"1. The file or files of papers maintained by you and/or CMG Law in connection with the affairs of [Mr and Mrs W]. "2. All papers now or previously in your or CMG Law's hands relating to an employment claim brought by [Mr W] before the Employment Tribunal. "3. All papers now or previously in your or CMG Law's hands relating to a mortgage protection insurance claim by Mr and/or Mrs W. "4. Your ledger for office and client accounts in respect of all transactions for [Mr and Mrs W] and/or either of them. "5. Copies of all bills submitted by you and/or CMG Law to [Mr and/or Mrs W]. "6. Copies of all documents showing how you dealt with complaints from Mr and/or Mrs W under your in house complaints policy, together with a copy of that complaints policy."

The information which the ombudsman required was specified in schedule 2 to the notice:

"1. In so far as you are unable to produce any document or class of documents referred to in schedule 1 specify in respect of it: (a) whether you have ever had that document in your possession power or control and also, if so, (i) when you were in possession of it; (ii) when and in what circumstances you parted with possession of it and to whom; (iii) so far as you are aware, what has become of it; (iv) to the best of your knowledge the contents of it; (b) to the best of your knowledge and belief where that document now is and who has, or last had, possession of it. "2. Whether you received £500 or any other sum on account of costs in respect of employment litigation for [Mr W], and if so what has become of it."

[12]By the time the ombudsman produced his report of 24 January 2011 the defendant had done nothing at all in response to the notice. The ombudsman concluded his report in this way:

"52. The effect of [the defendant's] contumelious silence and delay in communicating with both [Mr and Mrs W], and later with the Legal Ombudsman has prevented this complaint being quickly and informally [‘dealt with’], has added to the considerable distress suffered by [the defendant's] clients or former clients, and, in my opinion is of a nature likely to bring him and the legal profession into disrepute … "54. I am of the opinion that [the defendant] is in repeated breach of his duties under the Solicitors Code of Conduct 2007 and under the Legal Services Act 2007 . "55. His failures, identified in this report, justify, in my view, urgent action by the SRA to protect [Mr and Mrs W]'s interests, to protect the wider public, and in the wider public interest of maintaining public confidence in the standards to be expected of solicitors authorised under the Legal Services Act 2007 ."

The application before the court

[13]I was told that this application was the first if its kind to have been pursued by the ombudsman.

[14]The application was made in a CPR Pt 8 claim form, lodged in the Administrative Court on 4 April 2011. It was supported by the ombudsman's affidavit of 31 March 2011. In his affidavit the ombudsman described the issues in the case, as he saw them. The defendant had let down Mr and Mrs W, his clients. He had abandoned them, refusing to respond either to them or to the ombudsman to explain what was happening in the two claims he was conducting on their behalf. He had also refused or neglected to release the papers in these cases. As a result of all this Mr and Mrs W believed they had lost an opportunity to bring an employment law claim and had been unable to proceed with a claim on a mortgage protection insurance policy. The ombudsman said that although it might already be too late to rescue either piece of litigation, it was still important for the ombudsman to be able to obtain the files, or as much information about them and their contents as possible, if he was to assess how much damage the defendant's poor service has caused to Mr and Mrs W. Because of the financial pressure on Mr and Mrs W this situation was obviously urgent. The defendant's failures in this case did not appear to be an isolated episode of misconduct. The ombudsman had nine current cases involving complaints against him. The records of the Solicitors Disciplinary Tribunal were also illuminating. The defendant had twice been before the tribunal. The ombudsman set out the detail of those two disciplinary processes. He said that the defendant's disciplinary history showed a persistent pattern of him ignoring his duty to respond to letters until compelled to do so and little if any regard for his professional obligations. Financial penalties, and the threat of them, appeared to have very little effect on him. The ombudsman concluded his affidavit by saying that he was satisfied of all the matters of which he needed to be satisfied under the 2007 Act to certify what he believed to be the defendant's "wilful misconduct" in failing to comply with requests for the documents and information required by the ombudsman. The defendant's conduct was "causing severe prejudice to the two complainants, members of the public who were his clients". The ombudsman asked for "the imposition of sanctions on the defendant to compel him to comply".

[15]The ombudsman thus certified to the court the defendant's default on the s.147 notice. He contended that if, having investigated the case under s.149(3) of the 2007 Act, the court was satisfied that the defendant had failed to comply with a requirement to produce documents and provide information to him without reasonable excuse, it should deal with him under s.149(4) as if he were in contempt of court. The ombudsman went on to say that, if the court were to do that, he would invite it "to make a committal order for [the defendant's] imprisonment for such period as the court thinks just (not exceeding two years), subject to earlier release if [the defendant] purges his contempt by producing the documents and providing the information required".

[16]The ombudsman's application was served on the defendant on 15 April 2011. It was served by a process server, Mr Ross, who later made a witness statement saying that he served the defendant personally at his home in Bolton with a bundle of documents including the claim form and the ombudsman's affidavit, drew his attention to the warning about "contempt of court" in one of the letters he served on him, and pointed out to him the date and time when the ombudsman's application was due to be heard by the court. In a letter dated 14 April 2011, which accompanied the material served on the defendant, Mr Rich warned the defendant of the possible consequences of the ombudsman's application to the court:

"Please be warned that the Legal Ombudsman will be inviting the court to proceed against you as if you were in contempt of court and this may result in your being imprisoned or fined. It is in your interests that you attend. You would also be very well advised to seek legal advice and representation. If you are taking legal advice you should do so as soon as possible and should show your solicitor this letter and enclosures."

The SRA's intervention

[17]The SRA wrote to the defendant on 9 February 2011, requiring an answer from him within 14 days. The SRA received no response to that letter. On 8 April 2011, after these proceedings had been issued, the adjudication panel of the SRA had resolved, under Schedule 1 to the Solicitors Act 1974 , to intervene in CMG Law to protect the interests of clients and beneficiaries. Mr Stuart Farr of Laytons was appointed as the intervention agent and Mr Farr carried out his intervention on 12 April 2011. On 5 May 2011 Mr Farr sent an e-mail to Ms Sansoy, saying that, as part of the intervention process, his firm had recently taken possession of a file relating to criminal proceedings against Mrs W for an offence of blackmail. He added that he had not so far been able to locate any information about a claim in the employment tribunal.

The defendant's professional disciplinary history

[18]The defendant has twice been the subject of adverse determinations in a professional disciplinary process, in June 2009 and in February 2010. On the first occasion the Solicitors Disciplinary Tribunal had to consider several allegations against him, including that he had failed to respond to correspondence from the SRA, in breach of rule 1(d) of the Solicitors' Practice Rules 1990 , and that he had failed to deal with correspondence from the SRA, in breach of rule 20.03 of the Solicitors' Code of Conduct 2007 . The tribunal found the allegations proved. Mitigation was put forward. The tribunal accepted the defendant's explanation for his misconduct and was satisfied that he had accepted his failures. It imposed a fine of £5,000. On the second occasion the tribunal had to consider allegations similar to those it had found proved on the first occasion, including charges that the defendant failed to deal with the SRA in an open, prompt and co-operative way, contrary to rules 20.02 and 20.03 of the Code. The tribunal upheld those charges. In its decision on penalty and costs it stressed the importance of solicitors co-operating fully with their regulator. More than once the defendant had failed to offer any explanation for his conduct, even after repeated attempts by the regulator to seek his views. This being the defendant's second appearance before it on allegations such as these, the tribunal had considered imposing a period of suspension. However, in the hope that the defendant had now realised the importance of complying strictly with his undertakings and of dealing properly with the SRA, the tribunal decided that the appropriate penalty was a fine of £20,000.

The hearing on 10 May 2011

[19]When the case first came before me on 10 May 2010, the defendant was neither present nor represented in court. The ombudsman's position was described by Mr Rich in his affidavit of 6 May 2011, and by Mr Philip Havers QC in brief submissions. Mr Rich said in that affidavit that he had heard nothing from the defendant. I was also told that Mr and Mrs W had by then lost the opportunity to appeal against the decision of the employment tribunal in their case. Although the SRA had by this stage begun to obtain documents from the defendant and CMG Law, the ombudsman had decided to go ahead with his application to the court under s.149 . I decided that the right course to take was not to proceed in the absence of the defendant but to issue a bench warrant, not backed for bail, so that he would be brought before the court and given the opportunity to respond in person to the ombudsman's application.

The hearing on 13 May 2011

[20]On 13 May 2011, having by then become aware of the warrant, but before it had been executed, the defendant came to the Administrative Court Office, and then appeared before me in court. So too, at my invitation, did Mr Havers for the ombudsman. Because of the short notice at which he had to appear, Mr Havers understandably did not have the benefit of further instructions but nevertheless did what he could to help the court. At the hearing the defendant produced a letter to the ombudsman, dated 18 April 2011, explaining his position. Mr Havers made it clear that he had not seen that letter before. In it the defendant said that he no longer worked at Stirling Law, that the SRA had intervened in his practice, and that he no longer had access to "any archive or current papers". His current files remained with Stirling Law and his "archive files" were now with Laytons. There were a number of observations about Mr and Mrs W that he wanted to make to correct inaccuracies in the ombudsman's application and supporting evidence:

"1. It is correct that [Mr and Mrs W] did make a complaint to you. This arose during the transfer of cases from CMG Law to Stirling Law. However, … [Mr and Mrs W] withdrew any complaint against me and in fact [their] complaint appears to lie, if anywhere, with BYL Law. I make no comment on whether that is justified. "2. I have acted for [Mr and Mrs W] for some time. They found themselves in a dire situation, which involved [Mrs W] being imprisoned for blackmail. I was acting for them, successfully and to their satisfaction on an insurance claim. From there, I was asked to review the work done for her in relation to her criminal case and also the employment case which was linked to it. I did so without up-front or on-going charges because their financial situation was dire. The £500 on account of costs you mention was to review the complex blackmail papers and to do a lengthy advice. They have a copy of that. "3. It is important … at this juncture that I highlight to you that until very recently, I was in regular contact with [the Ws] on a number of matters and hence my clear understanding that this complaint was no longer active. I will endeavour to locate, with the help of Stirling Law, the e-mail regarding this. I saw [Mr and Mrs W] at home before Christmas and I have attempted to reinstate the employment claim for them, which in my view was wrongly struck out. I attended the employment tribunal in Manchester twice for them. I cannot recall the precise dates but once in December and again in January to the best of my recollection."

The defendant went on to refer to the insurance claim:

"4. The mortgage protection insurance claim is a relatively recent matter and quite complex. Again, if necessary, I can give a full history but as an example I attended their home recently to sit in on an appointment with a loss adjustor appointed by the insurers. He wanted to interview them under caution and I advised he could not do so under the terms of the policy. They were most relieved at my presence and advice. We are currently intending to commence proceedings for them in relation to this." "5. I have also advised them on a preliminary basis on a new claim against a property developer and brewery following the closure of the pub [Mrs W's] daughter managed. Again whilst not directly relevant to your claim form it does support why I considered the complaint to not be active and that I have no wish to see any harm to [Mr and Mrs W]. I do not think it inaccurate to say that most solicitors would not act without payment up front but such is my concern for them that I have always tried my utmost to help them. "6. I cannot give you a precise figure but I have seen them both at home on possibly five to six occasions since I joined Stirling Law at least once in Manchester and also at the pub premises when the eviction occurred. I have also helped [Mrs W] with a job reference and another admittedly small value potential employment claim."

The difficulties Stirling Law had had to cope with were described:

"7. Stirling Law moved offices during Christmas and New Year 2010 to 2011. We had no e-mail for several weeks and this may be why I did not receive your e-mail of 14 January. Mr Willmott would have been in the same position but I have discussed [the Ws] with him on many occasions. It would be fair to say that they are very anxious about their overall situation and that can sometimes spill over in to quite emotive e-mails and voice messages. This often occurs with clients in situations of distress and sometimes it is more reassurance than technical legal advice that is required."

Finally, the defendant explained his attitude to the ombudsman's investigation: "8. I hope you can see that I have not wilfully refused to engage with you. I have no need or desire to. I like [the Ws] and have always tried to assist them and continue to do so. I genuinely, both on their say and on the evidence of continued working relations on existing and new instructions considered the complaint to be at an end. "9. The situation regarding any papers, is that Stirling Law have some papers but the employment files will now be held by Laytons as they were in a box in my old office with archived papers. I did not agree with the SRA's position regarding the intervention because my old office held only historic papers and representatives of the SRA had been apparently satisfied about this having visited in October (with me present) and on a number of occasions in December and January. However, the papers, if [the Ws] require are all available but I have no control over them. "10. My position with Stirling Law was [that] of consultant. You may be aware that my practising certificate is pending approval by the SRA and I have been told that I cannot attend the office until this is resolved. However, Mr Willmott can assist with any papers but I believe [the Ws] are in touch with him. "11. My own situation has been most difficult over the last 12 months and I am now in a situation of professional and financial difficulty but I do not consider that I have harmed [the Ws] and genuinely and honestly consider the complaint to be at an end. Respectfully, the history would suggest so and I believe that if your office had contacted [the Ws] any time from December this would have been established. "12. May I suggest that the matter is either vacated or adjourned pending an inquiry with Laytons and/or Stirling Law and/or [the Ws]".

[21]Having heard what the defendant had to say, I decided to adjourn the hearing of the ombudsman's claim until 27 May 2011, granting the defendant unconditional bail in the meantime, but impressing on him the importance of complying with the order I made. I ordered him to file and serve an affidavit in answer to the claim by 20 May 2011. Any evidence in response was to be produced by the ombudsman by 25 May 2011 and the matter was to be listed for a hearing before me on 27 May 2011. Costs were reserved.

The defendant's evidence

[22]After the hearing on 13 May 2011, the defendant swore an affidavit, dated 23 May 2011, in which he explained the work he had done for Mr and Mrs W. He said that in August 2010 when he was closing CMG Law he moved his caseload to BYL Law. He said that a good deal of confusion had been caused by his move from CMG Law to BYL Law and then, in the end, to Stirling Law. He exhibited to his affidavit a witness statement which he had filed on behalf of Mr W in the employment tribunal on 19 January 2011, setting out the relevant history. He said that Mr and Mrs W made their complaint because they wanted to get hold of the file of papers relating to their employment case. The file was at BYL Law. Therefore, said the defendant, he had no control over it for about three or four weeks. Once it became clear that Mr and Mrs W wanted to carry on instructing him he went to see them. This was sometime in November or early December 2010. The defendant said that he understood from the e-mail sent to him by Ms Sansoy on 30 November 2010 that Ms Sansoy believed that if Mrs W got her file back the complaint would be resolved. He had continued to act for Mr and Mrs W, appearing in the employment tribunal on their behalf in January 2011. On that occasion Mr and Mrs W were penalised for earlier failures to comply with case management orders, failures which had taken place before September 2010. The defendant said that when he first visited Mr and Mrs W at home after his move to Stirling Law he explained to them what had happened, telling them that he was aware of their complaint and that he understood why they had been concerned. He said that he asked them if they wanted to continue to instruct him. They did.

[23]The defendant set out in his affidavit his understanding of the status of Mr and Mrs W's complaint at that time:

"13. I understood from [Mr and Mrs W] and in conjunction with the e-mail from Caroline Sansoy that the complaint was no longer active as the main concern was the location of the file and also my whereabouts. I accept that it would have been much better for me to confirm the position to her and subsequently to her colleagues. I offer to the [ombudsman] and the court, my sincere apologies for not so doing. I accept that this has led to additional work and expense for which I also apologise. My failure to reply was not however based on any attempt to cause [the Ws] or the [ombudsman] any difficulty. I made an error of judgment assuming from what I had been told and from my continued retention that the complaint was not active. I should have put the matter to rest by writing to the [ombudsman]. In mitigation, my concern was to look after [the Ws] and I submit that my statement to the tribunal demonstrates this." 35. "

I should have filled in the acknowledgment of service. Instead I sent the detailed letter. I accept the [ombudsman] says this is not in its office but I posted the letter myself. It does bear an incorrect reference. Perhaps that is the reason. I apologise to the court and the [ombudsman] for not filing the acknowledgment. I was due to move house to smaller rented accommodation because of my financial and work situation. I prepared and sent the letter then in the significant mayhem of moving house, failed to diary the hearing and chase up my letter. This was not intentional but a by-product of what has been a most difficult time. Again, I offer my sincere apologies." "(a). I should have written to the ombudsman to advise it that I considered [the Ws'] complaint had been dealt with at the time as it related to the employment file and the jubilee claim. I apologise for not so doing. This was remiss and inefficient. It was not intended to be rude or dismissive of the ombudsman. I genuinely did and do consider that at that time, [Mr and Mrs W] were happy to continue as we had done whilst I was at CMG Law; (b) I sincerely apologise for not replying to the formal s.147 notice. This was borne out of the fact I considered the substantive nature of the complaint had been addressed. I should still have formally replied and regret not having done so; (c) I sincerely apologise for not filing the acknowledgment and attending court on 10 May. This was an oversight due to the pressure I have been under which has been most exacting. Moving house also contributed to that oversight; (d) I confirm that I will co-operate with this matter and any other matter that the [ombudsman] is currently seeking to resolve."

Mr Rich's second affidavit

[24]In his second affidavit, sworn on 25 May 2011, Mr Rich said that there was no trace of the defendant's letter of 18 April 2011 ever having been received by the ombudsman before it was presented to the court by the defendant at the hearing on 13 May. Mr Rich referred to a letter which he had sent to the defendant on 18 May 2011, in which he reviewed the evidence before the court and invited the defendant to make appropriate concessions and apologies. Mr Rich observed that the defendant seemed now to have accepted that he had been behaving improperly and to be ready to undertake to the court that he would co-operate with the ombudsman in this and the other extant complaints in which he was involved. Mr Rich said that on 23 May 2011 he had spoken to Mr Willmott, who told him that there was indeed a period, from about 4 to 20 January 2011, when there could be a delay in receiving e-mails at Stirling Law, but that, so far as he was aware, no e-mails were lost. Mr Rich contended that the ombudsman's notice must have arrived but that the defendant either did not bother to read it, or disregarded it, or simply failed to respond. Mr Rich dealt with the defendant's suggestion that Mr and Mrs W had withdrawn their complaint, Mr and Mrs W having by then given their own account of their dealings with the defendant in a letter dated 20 May 2011. After speaking to Mr and Mrs W on the telephone on 22 May 2011, Mr Rich understood that the defendant had not been instructed by them in any fresh matters since September 2010 and that although they had allowed the defendant to try to restore the hearing of their case before the employment tribunal, this was because they felt they had no choice but to do so. Mr Rich had also, he said, spoken to Mr Ryan of BYL Law, whose account differed significantly from the one the defendant seemed to have given to Mr and Mrs W. On 20 May 2011 Mr and Mrs W had sent a letter to the ombudsman, contradicting much of what the defendant had said in his letter of 18 April 2011. They described the difficulties they had had to deal with, and were still having to deal with, in trying to retrieve the files in their employment case. They said that they had never indicated they were going to withdraw their complaint against the defendant and that "the only way this would have been done would have been if our files had been returned, which he never did and still hasn't", and that all they had wanted was "to have our files returned so we could move on with our matters …"

[25]Mr Rich set out in his second affidavit what the ombudsman then considered to be the outstanding matters in the investigation:

"44. I note and am grateful for [the defendant's] assurance that he will now work with the ombudsman to complete the investigation and, if possible, resolve the complaints. There is much to do and it will be both much quicker and much easier with his co-operation. "45. Clearly there are still papers to locate … [the defendant] now appears to have access to at least some of the missing employment tribunal papers which are needed to establish whether the action can be resuscitated in any form, and if not assess the degree of loss caused to [the Ws]. However even on his account the exhibited documents do not comprise the complete set of papers. "46. I have now had an opportunity to consider the papers recovered by the intervention agent in respect of the insurance claim … [T]hey are very scanty. The ombudsman will need to work with [the defendant] to identify what if any further papers there are or were, reconstituting them where necessary and trying to identify whether this claim can be revived. "47. The financial information or documentation called for is also still outstanding."

Mr Rich accepted, however, that the necessary information was likely to be obtained. He concluded his second affidavit by explaining the course which the ombudsman now invited the court to take. He said the court would be drawn to the inevitable conclusion that the defendant had failed without reasonable excuse to comply promptly or properly with the requisition under s.147 of the 2007 Act, and indeed that his default was continuing. The defendant had conceded as much in his affidavit. What had changed, said Mr Rich, was that the defendant had now, at last, realised how serious the situation was and was offering to help in putting it right. Mr Rich invited the court, in considering how the defendant's contempt might best be purged, to take undertakings from him that he would co-operate with the ombudsman in investigating and resolving all complaints against him; and to keep the ombudsman informed of his address, telephone number and e-mail address for correspondence. Mr Rich suggested that the court might wish to suspend any penalty to ensure that the defendant would continue to co-operate in resolving the outstanding issues in the various complaints involving him. Mr Rich said that the ombudsman recognised that there was personal mitigation in this case arising out of the personal difficulties referred to by the defendant, the disruption to his practice that had resulted from his repeatedly moving from one place to another, and the apology he had now belatedly made. Mr Rich emphasised that the ombudsman's aim was not to ensure that defaulters were punished but to gain their co-operation in dealing with complaints. The hearing on 27 May 2011

[26]When, on 27 May 2011, both parties appeared before me again, it seemed that some progress was being made in finding the documents the defendant had so far failed to provide to the ombudsman. The defendant offered the court three undertakings:

"1. To take all reasonable steps to search for and locate but not to take possession of all the outstanding files and documents referred to in the s.147 notice dated 14 January 2011. "2. To take all reasonable steps to co-operate with and to assist the [ombudsman] in further investigating Mr and Mrs W's complaint and any other complaint made about the defendant to the ombudsman. "3. To notify the [ombudsman] forthwith of any change of address, telephone number or e-mail address."

I concluded that, at that stage, the right thing to do was to accept those undertakings, which would allow the defendant to co-operate with the ombudsman in the investigation then under way and enable the court to receive further evidence and submissions before reaching a final conclusion on the ombudsman's application: see para 11 of my judgment. The observations I made on that occasion were, as I said at the time, provisional and not intended to be a final judgment on the application before me. With a view to having the case back before me once the parties had had an opportunity to make further progress if they could, I ordered that the proceedings were to be listed again on the first available date after 28 days. I also ordered the defendant to pay the costs of the proceedings thus far, which I summarily assessed in the sum of £11,053. Events after the hearing on 27 May 2011

[27]What happened after the hearing on 27 May 2011 was described in Mr Rich's third affidavit, sworn on 29 September 2011. After that hearing Mr Rich and his colleagues discussed the defendant's case with Mr Farr. Mr Farr sent Mr Rich an e-mail on 16 June 2011, in which he explained what he had been doing:

"The intervention took place on 12 April 2011, at which point we were able to gain access to the former premises of CMG Law in Bolton and uplifted a significant number of client related files and documents from the premises … As matters stand, we hold in the region on 350 boxes of material. "

During the course of the intervention process, however, it has become apparent to us and the SRA that a significant number of complaints and issues have arisen regarding [the defendant's] handling of his practice and client matters generally. This, in turn, has generated a number of requests for files, not least from the ombudsman. The process of locating files has been problematic for several reasons. Firstly, the documents seized from the former premises were in extremely poor order. Many of the papers were loose and in no coherent (or apparent) order. Secondly, the problems have been compounded by the fact that [the defendant] clearly took a significant number of files with him at the time of the closure of CMG Law in or around August 2010. Those files appear to have gone to one or other of BYL solicitors or Stirling Law. We are continuing to engage with both those firms in order to ascertain precisely what files came into their possession and what remains with them. Unfortunately, it appears that [the defendant] did not undertake the transfer process in an orderly and efficient manner and so while some progress is being made in this respect, the position regarding the transferred files remains somewhat unclear …" Mr Farr eventually found the papers relating to at least some of Mr and Mrs W's litigation. According to Mr Rich, they comprised over 1,000 pages. The original documents arrived in the ombudsman's office on 1 August 2011. Ms Sansoy was then able to proceed with her investigation. In the meantime Mr and Mrs W instructed new solicitors. They also asked for the papers. They and the ombudsman arranged for electronic copies of the papers to be sent to them. They were then able to give Mr and Mrs W the advice they needed.

[28]When Ms Sansoy had completed her investigation she prepared two reports in which she made her recommendations. These were sent to Mr and Mrs W and the defendant for comment. The case was then put before the ombudsman for a determination. Ms Sansoy concluded that in the employment law claim the defendant had provided Mr and Mrs W with a poor service, but that that had not affected the outcome of their case. No significant papers were still missing. Ms Sansoy recommended that the sum of £500 paid on account should be refunded and that a payment of £250 for "distress and inconvenience" would be the appropriate remedy. On the mortgage protection insurance claim, Ms Sansoy was unable to find any relevant documents and concluded that the documents had been lost or destroyed. She understood, however, that the underlying claim was still alive. Again she concluded that there had been poor service which had caused Mr and Mrs W "a great deal of stress and upset", but she was unable to discern any financial loss. She recommended a compensation payment of £250 for "distress and inconvenience".

[29]On 28 September 2011 the ombudsman made his provisional determinations on those two complaints. On the first complaint the ombudsman's provisional determination said:

"… I have now read the case papers and reviewed the evidence in the file. I have also considered carefully the comments on the report I have received from the complainant. Having done so, I have decided that the conclusions of the report are not sustainable on the evidence. In my view you provided a reasonable service up until it became clear that the case was doomed due to the problems about the credibility of the complainant's case. When counsel advised that the chances of success were nil I am satisfied that you were acting reasonably in how you approached this. However, what then followed by the unexplained exit by you from the stage was poor service. Leaving [the Ws] in the position you did without a proper explanation was clearly distressing to them. This has been further compounded by your failure to deal with their complaints in a proper manner. "

You were engaged in the matter by the complainant to pursue an employment issue. It is clear from the evidence that the case started and you had a view on the case [on] which you sought counsel's advice. Having received that advice, the complexion of the case changed and the chances of success drastically declined. They, possibly unwisely, persisted with the case and you re-engaged in the matter some time later, but for other reasons the case was dismissed when a judge's patience was stretched by delays that were clearly to be laid at the complainant's door. "I am therefore satisfied that up until the advice from counsel arrived and effectively ended any prospect of success that the service was reasonable and the fee charged was not excessive. In these circumstances I do not believe this fee should be returned as the report suggests. However, for effectively leaving them in the lurch, without proper explanation and your unwillingness to engage with them in the complaints process, my view is that you should pay £250 compensation …" Because his determination differed from the recommendation made to him, the ombudsman allowed the defendant until 12 October 2011 to comment before a formal decision is issued.

[30]On the dispute relating to the mortgage insurance claim, the ombudsman said this in his provisional determination:

"Having considered the matter carefully, in my view there is no evidence to substantiate a formal engagement by the complainant of your services in this matter. It is clear and you can see it in a recent affidavit that there was some informal discussion about the insurance claim between you and the complainant, but that never progressed to any firm instructions to conduct the case. The complainant claims a conditional fee agreement was reached but can offer no evidence to support this. No copy of this agreement has been found in your files. There is no documentary or any other proof to support the complainant's position and in such circumstances I cannot be satisfied on the balance of probability that you were instructed in the matter and therefore it follows I cannot be satisfied there was no [sic] poor service. Therefore my provisional decision is that the matter is not made out and no remedy is called for."

Again, the ombudsman gave the defendant until 12 October 2011 to comment on his provisional determination.

[31]Whilst maintaining that "it is clear beyond doubt that the defendant did fail to comply with the requisition served on him in January [2011], and that he made default without a reasonable excuse", Mr Rich acknowledged in his third affidavit that "in so far as the defendant's conduct is to be treated as a contempt of court it has now been purged". The defendant had apologised for it in his affidavit. And enough of the missing information and documents had now emerged to allow the ombudsman to complete the investigation of this complaint. Mr Rich also accepted that after the SRA's intervention on 12 April 2011 none of the relevant papers remained in the defendant's possession. Mr Rich went on to say:

"27. However, the papers now recovered were in his possession, and readily available to him, from the time [Mrs W] started asking about them in or before September 2010. They were still readily available to him from the beginning of the ombudsman's inquiries in November 2010 until after the commencement of this action in April 2011. Most importantly they were readily available to him at the address of his former practice when the requisition was served on him in January 2011 and remained so until after the issue of these proceedings. "28. It is of course speculation, but if he had searched for the insurance papers before all his papers were taken over and moved on the intervention it is possible they would have been found and preserved. "29. As the court knows from the statements … and evidence in this case the ombudsman exercised considerable forbearance before issuing first the formal requisition and later this case. Both steps were taken, I suggest, as a matter of last resort. "30. Quite apart from ignoring correspondence from his clients, the defendant had also ignored some eight letters, phone calls, or e-mails from the ombudsman and further correspondence from the SRA before these proceedings were issued. This must have caused considerable distress to [Mr and Mrs W], as well as wasting considerable public resources at the ombudsman, the SRA and the court. "31. Whatever personal or professional pressures the defendant was under I submit this was a sustained failure to co-operate and the defendant is, I submit, entirely the author of his own misfortune, and needlessly so. "32. His failures should also be seen in the context of regularly ignoring his professional duties as disclosed by his two previous convictions before the Solicitors Disciplinary Tribunal, both of which included proven counts of failing properly to respond to regulators. It is further reflected in his initial cavalier attitude to these present proceedings. "33. In assessing what if any penalty to impose the court may also wish to know that the SRA have instituted disciplinary proceedings against the defendant before the Solicitors Disciplinary Tribunal in respect of a number of allegations. The defendant's conduct in this case forms part, but only part, of the matters alleged against him. Those proceeding have not yet concluded. I understand that the tribunal may wish to know the order made by the court. "34. It is also right that I should report that the defendant has not yet paid anything towards the costs awarded against him. However given that, as I understand it, he is now out of work and in financial difficulty I am not entirely surprised by this. "35. The court may be concerned as to how, if the ombudsman ultimately directs a financial remedy, it will be paid. The answer is that the defendant's professional indemnity insurers (or the Law Society's Assigned Risks Pool who are responsible for acting as insurers of last resort for solicitors who have failed to obtain their own cover) are required to meet most awards of compensation by the ombudsman under the mandatory terms of the policy. It is difficult to be more precise at this point as some heads of an ombudsman's award are covered by the mandatory terms of such policies and some are not. "36. The Solicitors Compensation Fund will normally be responsible for repaying any money that should have been in a solicitor's client account but was not, such as money paid on account that has disappeared."

Mr Rich confirmed that there were no live investigations into the defendant's professional affairs which required him to do anything at that stage. Some cases were in the hands of the Solicitors Compensation Fund. In others the papers were being dealt with by an intervention agent. In others still the case is closed because the complainant wanted to pursue proceedings against the defendant for professional negligence.

[32]Mr Rich repeated his request on behalf of the ombudsman for some general guidance on the court's likely approach to defaulters such as the defendant and the range of penalties likely to be imposed. Such guidance, said Mr Rich, would "help ensure that due warning could be given to the legal professions, both facilitating the work of the ombudsman and reducing the number future cases that had to be brought before the court".

The hearing on 7 October 2011

[33]The matter came back before me, finally, on 7 October 2011. On that occasion I considered the whole of the evidence before the court, including Mr Rich's third affidavit, and heard the submissions of Mr Havers and the defendant, to which I shall refer below.

The statutory framework

[34]The regulation of all branches of the legal profession was overhauled by the 2007 Act. The reforms involved the establishment of a new independent complaints handling body, the Office for Legal Complaints. The 2007 Act provides for a scheme, referred to as "the ombudsman scheme", the function of which is to deal with consumer complaints concerning all those who carry out legal activities and are members of bodies and organisations regulated by the Legal Services Board, provided that the "in-house" complaints procedures of the body or organisation in question have first been exhausted. The ombudsman scheme created by the Office for Legal Complaints encompasses the role of the ombudsman. The ombudsman does not investigate allegations of professional misconduct, which continue to be dealt with by the relevant approved regulator, but he does investigate complaints about the provision of legal services. Under the ombudsman scheme, redress may be provided to a complainant by way of payment up to a maximum of £30,000 in compensation but no disciplinary action may be taken against a respondent.

[35]The 2007 Act makes specific provision to enable an ombudsman to obtain documents or information in the course of his investigation of a complaint. s.147 of the 2007 Act provides:

"(1) An ombudsman may, by notice, require a party to a complaint under the ombudsman scheme- (a) to produce documents, or documents of a description, specified in the notice, or (b) to provide information, or information of a description, specified in the notice. "(2) A notice under ss.(1) may require the information or documents to be provided or produced- (a) before the end of such reasonable period as may be specified in the notice, and (b) in the case of information, in such manner or form as may be so specified. "(3) This s.applies only to information and documents the provision or production of which the ombudsman considers necessary for the determination of the complaint." "(5) If a person who is required under this s.to produce a document fails to do so, an ombudsman may require that person to state, to the best of that person's knowledge and belief, where the document is."

[36]If, by a s.147 notice, an ombudsman has required "an authorised person" to produce documents or to provide information specified in the notice and the "authorised person" has failed to comply with that requirement, s.148(2) requires the ombudsman to give each relevant "authorising body" a report which states that he is of the opinion that the authorised person has failed to comply with the s.147 notice which gives details of the failure. An "authorised person" is defined by s.148(6) as meaning "an authorised person in relation to any activity which is a reserved legal activity". This includes solicitors. s.160 defines "relevant authorising body" as including "(a) an approved regulator by which the person is authorised to carry on an activity which is a reserved legal activity …" The SRA is a relevant authorising body.

[37]s.148(3) of the 2007 Act provides that:

"a report under ss.(2) may require the relevant authorising body to report to the ombudsman the action which has been or is to be taken by it in response to the report under that ss.and the reasons for that action being taken."

[38]Provision for the enforcement of a requirement to produce documents or provide information under s.147 is made in s.149 :

"(1) This s.applies where an ombudsman is of the opinion that a person (‘the defaulter’) has failed to comply with a requirement imposed under s.147(1). "(2) The ombudsman may certify the defaulter's failure to comply with the requirement to the court. "(3) Where an ombudsman certifies a failure to the court under ss.(2), the court may inquire into the case. "(4) If the court is satisfied that the defaulter has failed without reasonable excuse to comply with the requirement, it may deal with- (a) the defaulter, and (b) … as if that person were in contempt." "(6) The ombudsman (‘the enforcing ombudsman’) may not certify the defaulter's failure to the court until a report by that or another ombudsman has been made as required by s.148(2) and the enforcing ombudsman is satisfied- (a) that each relevant authorising body to whom such a report was made has been given a reasonable opportunity to take action in respect of the defaulter's failure, and (b) that the defaulter has continued to fail to provide the information or produce the documents to which the requirement under s.147 related. "(7) In this s.‘court’ means the High Court."

[39]s.14(1) of the Contempt of Court Act 1981 provides:

"In any case where a court has power to commit a person to prison for contempt of court and (apart from this provision) no limitation applies to the period of committal, the committal shall (without prejudice to the power of the court to order his earlier discharge) be for a fixed term, and that term shall not on any occasion exceed two years in the case of committal by a superior court, or one month in the case of committal by an inferior court."

The issues for the court

[40]Mr Havers identified six issues for the court, the first three being of a general kind and the rest specific to this application. These six issues are:(1) procedure,

(2) venue,

(3) general approach,

(4) whether the court should inquire into the case of the defendant,

(5) whether the court should deal with the defendant, and

(6) how the court should deal with the defendant. Discussion Issue (1): procedure

Discussion

[41]No procedure for an ombudsman to certify a defaulter's failure to comply with a s.147 notice and to invoke the discretionary powers conferred on the court by s.149(3)(4) is to be found in s.149 , or in any other provision of the 2007 Act. Nor do the CPR prescribe the course to adopt. RSC Ord 52, r 4(1) 3 provides:

"Where an application for an order of committal may be made to a court other than a Divisional Court, the application must be made by claim form or application notice and be supported by an affidavit."

[42]Unless a committal application is made in existing proceedings, it must be begun by the issuing of a Part 8 claim form: see paragraph 2.1 of Practice Direction RSC 52 and CCR 29 -Committal Applications, supplementing CPR Sch 1 , RSC Ord 52 and CPR Sch 2 , CCR Ord 29 .

[43]In the absence of any procedural rules specific to the s.149 process, and after discussing procedure with the Administrative Court Office, the ombudsman elected to issue a Part 8 claim form in the Administrative Court. Mr Havers submitted that this seemed to be the most appropriate means of certifying to the court under s.149(2) and asking the court to inquire into a case under s.149(3) . He invited me to approve the ombudsman's decision to proceed in this way. He said that it would help future litigants to have the court's observations on the appropriate procedure.

[44]In my view the Part 8 procedure is, in principle, appropriate for proceedings under s.149 . It must be remembered, however, that this procedure was intended and designed for cases which are not likely to be contentious on the facts: see the note under the heading "Types of claim in which Part 8 procedure may or must be followed" in Civil Procedure 2011 , vol 1, p 358, para 8.1.1. No doubt there will be cases in which the parties cannot agree the facts on which the outcome of a s.149(4) process will turn. Then, if the case went on as a Part 8 claim, the court would be faced with the task of resolving factual disputes on affidavit evidence, and, usually, without hearing witnesses tested by cross-examination. But the Part 8 procedure itself is flexible. Rule 8.1(3) allows the court to order a claim to continue as if the Part 8 procedure had not been used, for example where the claimant had issued a Part 8 claim assuming wrongly that there would be no substantial dispute of fact. In a case such as that the court can order the proceedings to continue as a Part 7 claim, in the appropriate track, and give the directions required. That has not been necessary in this case. The relevant facts, once they emerged, were not controversial. And where dispute did arise it was peripheral to the issues the court has had to determine.

[45]The second question raised by Mr Havers concerned the issuing of the claim in the Administrative Court rather than the Divisional Court-again, it seems, after discussion with the Administrative Court Office. This, Mr Havers submitted, reflects the terms of RSC Ord 52, r 1(4) , which provides:

"Where by virtue of any enactment the High Court has power to punish or take steps for the punishment of any person charged with having done anything in relation to a court, tribunal or person which would, if it had been done in relation to the High Court, have been a contempt of that court, an order of committal may be made- (a) on an application under s.88 of the Charities Act 1993 , by a single judge of the Chancery Division; and (b) in any other case, by a single judge of the Queen's Bench Division."

Bringing a s.149 defaulter before a judge sitting in the Administrative Court, for him to "inquire into the case" under ss.(3) and "deal with" the defaulter under ss.(4) , is, I believe, within the scope of this rule. Although the power in s.149(4) is a power to deal with a defaulter "as if [he or she] were in contempt" rather than for an actual contempt or for conduct "which would … have been a contempt" of the High Court, I do not think this distinction carries any significance for the choice of forum in which to proceed. Again, therefore, I am able to endorse the procedure the ombudsman has chosen.

[46]Mr Havers rightly pointed out that if the procedure followed in this instance is, as the ombudsman suggests, the appropriate one, then paragraph 2.5 of Practice Direction RSC 52 and CCR 29 -Committal Applications, supplementing CPR Sch 1 , RSC Ord 52 and CPR Sch 2 , CCR Ord 29 , will apply. The requirements in paragraph 2.5 include:

"(1) the claim form together with copies of all written evidence in support must, unless the court otherwise directs, be served personally on the respondent; (2) the claim form must set out in full the grounds on which the committal application is made and must identify, separately and numerically, each alleged act of contempt including, if known, the date of each alleged act … (5) the claim form must contain a prominent notice stating the possible consequences of the court making a committal order and of the respondent not attending the hearing."

Those requirements were complied with in this case.

[47]The defendant did not make any submissions on this issue.

Issue (2): venue

[48]Practice Direction 54D supplementing CPR Pt 54 now provides that, to facilitate access to justice by enabling cases to be administered and determined in the most appropriate location, the claim form in proceedings in the Administrative Court may be issued either in London or in one of the regional offices of the Administrative Court in Birmingham, Cardiff, Leeds and Manchester unless the claim falls within the excepted classes of claim set out in paragraph 3.1 of the practice direction: see paragraphs 1.2 and 2.1 of the practice direction.

[49]Understandably, the ombudsman wants to be free to issue proceedings in one of the regional offices of the Administrative Court because it will often be much more convenient to do so. In his second affidavit Mr Rich said that in this case there would have been significant savings in costs if it had been clear that such proceedings could have been issued in the Administrative Court in Manchester or Birmingham. Mr Havers therefore invited the court to say that the ombudsman may do this. I accept that he may.

[50]The excepted classes of claim in paragraph 3.1 of the practice direction include (as class (6)) "proceedings relating to the discipline of solicitors". Mr Havers submitted that proceedings in which an ombudsman certifies to the court, under s.149(2) of the 2007 Act, a defaulter's failure to comply with a requirement under s.147 , and calls upon the court to inquire into the case under s.149(3) , do not fall within this class. On the contrary, said Mr Havers, such proceedings are concerned merely with the failure of a person, who happens to be a solicitor, to comply with a requirement under s.147 . The class of case excepted under the practice direction is, he said, concerned with disciplinary proceedings, as such, against solicitors, for example under s.54 of the Solicitors Act 1974 . Those submissions are, I believe, correct.

[51]The defendant made no submissions on this issue.

Issue (3): general approach

[52]Since this is the first occasion on which the ombudsman has certified to the court under s.149(2) , Mr Havers asked me to stress in my judgment that a failure without reasonable excuse to comply with a requirement under s.147 is likely to attract the sanction of the court, and to provide some indication of the likely tariff. Behind that submission lies this passage in Mr Rich's second affidavit:

"54. The ombudsman … asks the court to make clear to the legal profession that, however merciful it is prepared to be in the special circumstances of this case, the court will not tolerate a lawyer, or indeed anyone else, obstructing Parliament's will, expressed in Part 6 of the Legal Services Act 2007 , for there to be a prompt and effective means of securing fair resolution of complaints about legal services. "55. As this is the first case under Part 6 of the Legal Services Act 2007 the ombudsman also invites the court to make clear, in its judgment in this case, the importance of the profession co-operating with the ombudsman to maintain public confidence in the profession. "56. The ombudsman also invites the court to give the profession due warning that severe sanctions will normally follow a failure to comply promptly with a proper requisition by the ombudsman to produce documents or provide information. "57. It is hoped that if the court is minded to give such clarification and warning that this will make cases such as the present less likely in future as the court's judgment can be brought to the profession's attention both generally and, more specifically in any case where it is appropriate to give due warning to a practitioner who appears reluctant to comply."

[53]In the observations I made at the hearing on 27 May 2011 I said (in para 12) that each case of this type will necessarily turn on its own facts. I also said that it would not be appropriate to indicate in general terms a likely tariff, but that in proceedings such as these the court would strive to do what it can to make sure that the ombudsman's process is carried out efficiently. It was for this reason that I decided on that occasion to adjourn the proceedings on the undertakings given by the defendant.

[54]However, I see no reason to think that the general principles applying to committal for contempt should not apply to the court's power to commit under s.149 of the 2007 Act. The range of penalties for contempt of court includes immediate imprisonment, as well as the imposition of a fine. Subject to any statute imposing a lesser maximum, the maximum term of imprisonment which can be imposed on a single occasion for a contempt of court is two years: see Villiers v Villiers

[1994] 1 WLR 493

. The Court of Appeal has from time to time given guidance on sentencing for contempt in various contexts, for example in Hale v Tanner (Practice Note)

[2000] 1 WLR 2377

and in Lomas v Parle (Practice Note)

[2004] 1 WLR 1642

. As a general principle, which in my judgment must apply to every case under s.149 of the 2007 Act where the court is contemplating the imprisonment of a defaulter for quasi-contempt, the sentence must bear a reasonable relationship to the maximum sentence of two years. The court has power to suspend an order of committal for such a period and on such terms as it may specify: see Morris v Crown Office

[1970] 2 QB 114

, 124, 125, per Lord Denning MR and RSC Ord 52, r 7 . In Harris v Harris

[2002] Fam 253

, the Court of Appeal held that this is the only power to suspend in such cases, so that the court has to choose between a warrant for immediate execution and a warrant to be suspended. That choice must be exercised at the sentencing hearing; it does not arise again. A judge hearing an application to purge may not suspend a sentence already imposed. In Arlidge, Eady & Smith on Contempt , 3rd ed (2005), para 14-46, it is observed that the decision whether to suspend will generally depend upon whether the court's objective is primarily coercion or punishment, and that suspension is unlikely to be an appropriate course to take if the original order has been complied with by the time of the committal hearing: see Loseby v Newman

[1995] 2 FLR 754

. Arlidge, Eady & Smith , para 14-47, also note that a suspended term of imprisonment must itself be for a fixed term, that, in accordance with good sentencing practice, the length of the committal period should be decided without reference to whether or not it is to be suspended, and that the period for which the order is suspended should normally also be fixed. The period of suspension should not be disproportionate to the sentence itself or to the gravity of the conduct which attracts it: see Loseby v Newman

[1995] 2 FLR 754

, 757 C-D, per Balcombe LJ. Arlidge, Eady & Smith, para 14-101 say that although it has long been established that the court may impose a fine for criminal contempt, either with or without a sentence of imprisonment, it was at one time not the practice of the civil courts to impose fines for contempt because the aim of punishing contempt was regarded, at least in part, as coercive. They go on to say:

"It is now recognised that a contemnor may be fined for a breach of a court order, at least where committed in contumacious circumstances. As with any other fine, the means of the contemnor will need to be taken into account. Where there is a reluctance to provide the necessary information, it may be appropriate for the court to make a realistic estimate … There is no limit upon the amount of a fine which a superior court can impose."

Arlidge, Eady & Smith, para 14-102, doubt the existence of any power to suspend a fine pending compliance with an order.

[55]Mr Havers asked me to say in my judgment that a failure without reasonable excuse to comply with a requirement under s.147 of the 2007 Act is likely to attract the sanction of the court. In the observations I made at the hearing on 27 May 2011 I indicated that I saw force in that proposition. At the hearing on 9 October 2011 Mr Havers asked me to endorse it firmly. And I do endorse it. Mr Havers also encouraged me to say that the powers available to the court include imprisonment for up to two years and that the court would not hesitate to impose such a penalty where it is considered to be necessary and appropriate to do so. This I also accept. The spectrum of penalties for defaulters under s.149 of the 2007 Act is neither specified nor circumscribed by the 2007 Act itself; it is, potentially, as wide as is the range of sanctions traditionally imposed for contempt. Undoubtedly there will be cases, though they are likely to be more extreme in their facts than this, in which the court will see no option but to impose a sentence of immediate imprisonment for a failure to comply with a requirement imposed under s.147 of the 2007 Act. There will be cases in which, by the time the court comes to deal with the quasi-contemnor, he has already begun to purge his contempt, or has already succeeded in doing so, and the court is able to conclude that a custodial sentence would be inappropriate or counter-productive. There will be cases in which it will be right to suspend execution of the order for committal. There will be cases too in which the court is not persuaded that a sentence of imprisonment is justified but is persuaded that it would be expedient to impose a fine. The scale of the fine will necessarily vary according to the circumstances. There may even be cases in which it is inexpedient to impose any penalty at all or where the making of an order for costs, either on the standard or on an indemnity basis, is a realistic and adequate sanction on its own: see Arlidge, Eady & Smith , paras 14-134, 14-135, and, for example, LTE Scientific Ltd v Thomas

[2005] EWHC 7 (QB)

at [105], Richards J. The court will always be sensitive to the facts of the case in hand.

[56]In setting out the following guidance I do not intend to lay down any general rules to be complied with, but to identify at least some of the considerations which seem likely to inform the court's use of its powers under s.149 . This can only be done in the broadest of terms. But with that caveat I offer these five observations.

[57]The first point that I think ought to be made is that the use of the court's power under ss.(3) to inquire into a case and of the power under ss.(4) to deal with a defaulter as if he were a contemnor will generally involve both a punitive and a coercive purpose. But the court must not lose sight of the principle that, when it has before it an application to commit, its immediate concern will be to secure compliance with the order which has been flouted or ignored, but this does not diminish the role of the court in punishing the person guilty of such contempt if punishment is called for: see for example Lloyds TSB Commercial Finance Ltd v Melia

[2009] EWHC 1114 (QB)

. In most cases under s.149 the main object of the exercise, whether under ss.(3) or under ss.(4) or both, will be coercive: to oblige the defaulter to face the nature of his default, its consequences for others, and its potential consequences for him. But the court must also bear in mind the need to ensure that those who have defaulted on the requirements of a s.147 notice are dealt with as if they had been in contempt of court.

[58]Secondly, the extent to which the power to commit as if for contempt under s.149(4) will serve a coercive purpose will always depend on the particular facts. Circumstances will vary widely. In some cases it will be inappropriate or unnecessary to give the defaulter the chance to put right his default. For example, some or all of the documents sought by the ombudsman may have been destroyed or irretrievably lost, or the information requested may no longer be in the defaulter's power to impart. The blame to be laid at the defaulter's door may only be slight; it may, however, be great. He may have a perfectly good excuse for his conduct. He may even prove not to be in default at all. Others, who may be subject to the same or a related s.147 process, may bear some part of the blame for the failure to comply with the ombudsman's request. The underlying complaint may have gone away or may have been resolved. It may have been determined without the documents or information sought by the ombudsman proving important or even necessary to its outcome. ss.(4) does not require the court to deal with the person in default; it merely empowers it to do so. In some circumstances-though these may be rare-the court may conclude that it is not necessary for the defaulter to be dealt with at all.

[59]Thirdly, it should be remembered that the statutory scheme is fashioned to enable the court to deal with a default: a failure to act or to do something adequately or as well as the person responsible for doing it could. The mischief which the legislation is meant to defeat is harm done by omission, not harm done by a positive act. Keeping the statutory purpose in mind will be essential if the court is to make a sound decision under ss.(4) . While there will be some cases in which the default has been so irremediably bad that the court will have no option but to impose the sanction of immediate imprisonment, there will be many in which such a course will be not only disproportionate and unjust but also counter-productive. A defaulter may be the only person capable of remedying his default, for he alone may be able to produce the documents or provide the information the ombudsman has demanded. If this is so, putting him in custody straight away may only prolong his default. But, as I have said, there will be cases in which nothing short of immediate imprisonment will do. In such cases, just as a contemnor may promptly purge his contempt, the defaulter may soon see the good sense of doing what needs to be done to gain his release. Suspending execution of the order of committal may have a similar effect. So too in some cases may the imposition of a fine or the making of an order for costs. Where, by the time of the hearing, the defaulter has already begun to put right his default, or has even managed to do so entirely, the court may take the view that immediate custody is unnecessary or that a financial penalty alone will suffice: see Arlidge, Eady & Smith , para 14-101. In some cases, perhaps a small minority, it may be inappropriate, or inexpedient, to punish the defaulter at all. But the service of a s.147 notice being itself an instrument of last resort, a proven default which comes before the court under s.149 will always be a serious matter. Deterrence is therefore a legitimate-and may well be an important-aspect of the court's exercise of its power under ss.(4) .

[60]Fourthly, therefore, it is clear that the court will need to assemble an adequate picture of the facts before dealing with the defaulter. Where somebody's liberty is potentially at stake it is imperative that the court is able to act on an accurate understanding of what has occurred. The provision for inquiry under ss.(3) enables the court to perform its statutory role in two stages, proceeding to its sanction, if any, for the quasi-contempt once the defaulter has had a fair opportunity to put forward his side of the story, preferably in evidence on oath. What is an adequate picture of the facts in any particular case will be for the court to judge. There may or may not be argument about the facts. Sometimes, as in this case, the facts may be slow to emerge and it will be wise to allow a reasonable time for this to happen. If so, the court will need to set a timetable for its inquiry proceedings, taking care to ensure that the process as whole goes on no longer than it must. A defaulter who has to be dealt with under ss.(4) should be dealt with as soon as the court's inquiry under ss.(3) is complete.

[61]Fifthly, the court will need to be alert to the existence and progress of any related disciplinary proceedings. In principle, however, there should normally be no reason for the court to await the outcome of a parallel disciplinary process before exercising its powers under s.149 . This case illustrates the point. In my judgment, there will be few, if any, cases in which the court should delay a s.149 process until the outcome of disciplinary proceedings is known.

[62]The defendant made no submissions on this issue.

Issue (4): whether the court should inquire into the case of the defendant

[63]s.149(3) of the 2007 Act provides that where an ombudsman certifies a failure to the court under ss.(2) , the court "may" inquire into the case, not that it "must". Mr Havers submits that, having regard to the history of the case and the defendant's persistent failure to comply with the s.147 notice, this is undoubtedly a case into which the court ought to inquire. At the hearing on 27 May 2011 I noted (in para 6 of my judgment) that the defendant did not appear to dispute that this was a case into which the court should inquire. I also said that it seemed to me clear that this was a case into which, in principle, the court should inquire. The defendant did not seek to dissuade me from that view. I have inquired into his case, as this judgment explains.

Issue (5): whether the court should deal with the defendant

[64]s.149(4) of the 2007 Act provides that if the court is satisfied that the defaulter has failed without reasonable excuse to comply with a s.147 notice, it may deal with him as if he were in contempt.

[65]At the hearing on 7 October 2011, Mr Havers maintained his submission that the court ought to deal with the defendant as if he were in contempt of court. Not only had the defendant failed to comply with the ombudsman's s.147 notice, he has also been unable to put forward any reasonable excuse for that failure. He effectively acknowledged this in his affidavit, where he accepted that he "should still have formally replied", despite the fact that he "considered the substantive nature of the complaint had been addressed". Mr Havers said that the defendant had to concede as much; the terms of the s.147 notice made it inevitable. Even if the defendant did think that Mr and Mr W's complaint had been addressed-which, plainly, was not what they themselves thought, and also seems hard to reconcile with the facts set out in Mr Rich's second affidavit-this could not be a reasonable excuse for his failing to comply with the notice. Therefore, submitted Mr Havers, the court should now "deal with" the defendant in the way provided for in s.149(4) -as if he were in contempt of court.

[66]I expressed a provisional view on this issue at the hearing on 27 May 2011 (in paras 7 and 8 of my judgment). I noted (in para 8) that the defendant did not suggest that the court should refrain from dealing with him under its power in s.149(4) of the 2007 Act. Nor did the defendant contend otherwise at the hearing on 7 October 2011. He was right not to do so. This is clearly a case in which the court's jurisdiction under s.149(4) is engaged and ought to be exercised.

Issue (6): how the court should deal with the defendant

[67]Mr Havers submitted that the position here is similar to that which arises where there has been disobedience to an order of the court requiring an act to be done within a specified time. When this happens the relevant order may be enforced by an order of committal under CPR Sch 1 , RSC Ord 52 : see RSC Ord 45, r 5(1)(a) and Civil Procedure 2011 , at pp 2286-2287, vol 1, para sc 52.1.12. Thus Mr Havers drew an analogy with civil contempt. The analogy seems apt. The relevant jurisprudence, seen for example in Steiner Products Ltd v Willy Steiner Ltd

[1996] 1 WLR 986

, supports the principle that casual or unintentional disobedience to an order of the court will not usually justify an order of committal, and that such disobedience must be contumacious. However, s.149(4) of the 2007 Act sets out a somewhat different test, which is whether the defaulter had a "reasonable excuse" for failing to comply with the s.147 notice.

[68]When these proceedings began Mr Havers submitted that there were four factors which would justify making an order of committal in this case. In the first place, the defendant is a solicitor and thus an officer of the court. Secondly, his failure to comply with the s.147 notice arose against the background of his repeated failures to respond to inquiries from the ombudsman's investigator, Ms Sansoy, and his failure to respond to his own regulator, the SRA. Thirdly, his refusal to comply with the s.147 notice caused severe prejudice to his former clients, Mr and Mrs W, because, as he must have known, the absence of the relevant documents and information was impeding the ombudsman's investigation of their complaint. And fourthly, his failure to comply with the notice had followed the history of his two appearances before the Solicitors Disciplinary Tribunal, both of which had resulted in his being fined.

[69]In his skeleton argument for the hearing on 7 October 2011 Mr Havers acknowledged that the course I took at the hearing on 27 May 2011 had proved effective, and that the court was therefore now in a position to determine the ombudsman's application. He relied still on the four considerations to which I have referred. He recognised, however, as he had at the hearing on 27 May, that the defendant had seen how serious the situation had become, that he was by then offering to help the ombudsman, and that he had also apologised. Since the hearing on 27 May the information sought by the ombudsman had been provided and enough of the missing documents had been found to enable the ombudsman to complete his investigation of the complaint. Mr Havers also accepted that after the SRA's intervention on 12 April 2011, none of the papers remained in the defendant's possession. As Mr Rich has explained in his third affidavit, the solicitors now instructed by Mr and Mrs W had received the relevant papers, or copies of them, and had been able to provide Mr and Mrs W with the advice they needed. Therefore, said Mr Havers, the ombudsman accepted that if the defendant's conduct is to be treated as a contempt of court, that contempt-or quasi-contempt-had now been purged. This had been accepted by Mr Rich in his third affidavit.

[70]Mr Havers submitted that the defendant had been in default for a period of almost three months, from 24 January 2011, the date by which he had to comply with the s.147 notice, to 12 April 2011, the date on which Mr Farr was able to get hold of the relevant documents from the premises formerly occupied by CMG Law in Bolton. Throughout that period, said Mr Havers, the defendant had access to the documents the ombudsman had requested. This I accept.

[71]As Mr Havers submitted, not only did the defendant fail to comply with the s.147 notice or put forward any reasonable excuse for that failure, but it is clear too that the papers which have now been recovered from him were in his possession and readily available to him when Mr and Mrs W started asking about them in September 2010. They were available to him when the ombudsman's investigation began in November 2010. They were available to him at the offices of the firm for which he was working when the s.147 notice was served on him in January 2011. And they remained available to him until after these proceedings had been begun in April 2011. Had he looked for the relevant insurance documents before all his papers were requisitioned by Mr Farr, it is at least possible that they would have been found and kept. And, as Mr Rich pointed out in his third affidavit, the defendant had ignored several letters, telephone calls and e-mails from the ombudsman, and he had ignored correspondence from the SRA before these proceedings were issued. This had resulted in a waste of time, energy and cost both for the ombudsman and for the SRA, the need for proceedings to be launched, and, not least, distress to Mr and Mrs W. Mr Havers submitted that the defendant's quasi-contempt was only purged on 1 August 2011, when the ombudsman eventually received the original documents. The SRA was proceeding against the defendant, requiring him to answer several allegations made against him before the Solicitors Disciplinary Tribunal. His conduct in this case formed only part of those allegations. The disciplinary proceedings were still running, and the tribunal was likely to take into account whatever order is made by the court on this application. Mr Havers also told me that the defendant has yet to pay anything towards the costs ordered against him at the hearing on 27 May 2011. It is with all those considerations in mind that I was invited to deal with the defendant.

[72]At the hearing on 7 October 2011 I asked Mr Havers whether the ombudsman was agnostic about the appropriate sanction, if any, for the court to impose in this case. Not surprisingly, Mr Havers' answer was that whilst the ombudsman could and should confirm the court's understanding of the sentencing options available to it and provide examples of how the court's sentencing powers had been used in other cases, it would not be appropriate for the ombudsman to suggest, let alone recommend, the imposition of any particular penalty in this case or in any other case like it. In this sense the ombudsman's position is no different from that of the Attorney General when he brings proceedings for contempt of court under RSC Ord 52 , or that of the Director of Public Prosecutions and the Crown Prosecution Service in criminal prosecutions. Quite properly, therefore, Mr Havers went no further than to remind the court that the penalties it may impose in this case are imprisonment for up to two years and a fine. Mr Havers referred to the examples of penalties imposed for civil contempt since 1981 set out in Arlidge, Eady & Smith, Appendix 3. Helpful as this was, none of those cases seem to me to illuminate the approach the court should take when dealing with a defaulter under s.149 of the 2007 Act. In all of them the circumstances and the legal context were very different.

[73]This being the first case of its kind, the defendant has not had the fate of others in his position as a deterrent. In the end, the ombudsman's s.149 application had a salutary effect on him. He was able to point to several mitigating factors for his default, and these were not disputed by the ombudsman. Once he engaged with the ombudsman's investigation he did what he reasonably could to co-operate in it. He apologised for his default; he did not try to minimise or excuse it. His apology was sincere. It was first offered at the hearing on 27 May and was repeated at the hearing on 7 October. I am satisfied too that at no stage was the defendant trying to harm the Ws' interests. The documents the ombudsman was seeking came to light. The investigation went ahead. In the end it was concluded that Mr and Mrs W had suffered no significant loss. The fact remains, however, that the defendant consciously persisted in his default for about 2½ months, apparently ignoring the ombudsman's process entirely. For Mr and Mrs W the delay in their documents being found must have been frustrating, to say the least. The defendant's default was the more serious in the light of his unfortunate disciplinary history, in which a pattern of ignoring correspondence and requests for information is plain.

[74]At the hearing on 7 October, though he candidly acknowledged that he had been in default throughout the period between 24 January and 12 April, the defendant urged me to accept that his default was not compounded by any subsequent failure to purge his quasi-contempt. He urged me to conclude that between 12 April and the hearing on 27 May, and indeed since that hearing, he had done all he reasonably could to help both the ombudsman and Mr Farr. I accept that he did. It seems to me by that, through nobody's fault, the concurrent SRA process made progress in the ombudsman's investigation more difficult. The defendant said that after the SRA had intervened in CMG Law on 12 April, sometime before the hearing on 27 May, he went to Mr Farr's office and told him about each of the files he had. Mr Farr had not yet been able to start work on them. The defendant also said that after the hearing on 27 May he immediately sent an e-mail to Mr Farr offering to go and help him with the files and pointing out that he had given undertakings to the court, but he had received no reply. He could have said he found the papers Mr Farr needed "within hours". He did not accept that the documents were in poor order, as Mr Farr had said in his e-mail to Mr Rich of 16 June 2011. Nor did he understand why it had not been until 1 August that the ombudsman received the original documents. All of this was relevant mitigation, and I took it into account.

[75]The defendant urged me not to deal with him by imposing a custodial sentence but to consider instead a financial penalty. I invited him to tell me about his means: see Arlidge, Eady & Smith , para 14-101. He said his financial situation could fairly be described as "dire" but was improving. He had started in a new job as a legal analyst two weeks ago, on a fixed basic salary of about £2,000 a month net, and with the prospect of a bonus. He hoped eventually to be able to work as a solicitor again. When working as a solicitor he had been able to make about £150,000 a year after tax. He did not resist my making a further order for costs in favour of the ombudsman, summarily assessed at the figure I was given (£4,497). He insisted that the ombudsman's costs would all be paid, and said he could pay them within two months. He did not try to dissuade me from imposing a fine as well as ordering him to pay costs, or from requiring the costs to be paid by a date one month earlier than the deadline set for the fine: see Arlidge, Eady & Smith, paras 14-135, 14-136.

[76]On all the evidence and submissions I received, including the defendant's mitigation, I was able to conclude that this was not a case in which imprisonment was called for, but that a financial penalty was clearly justified. In fixing the level of the fine at £5,000 I had in mind that the defendant was also facing a substantial award of costs against him. In view of what he told me about his means I was satisfied that he will be able to pay both the fine and the ombudsman's costs by the deadlines in the order I made.

Conclusion

[77]The ombudsman's application therefore succeeded. Having inquired into the defendant's case, I dealt with him at the hearing on 7 October 2011 in the way I have described, explaining to him briefly my reasons for doing so. Those reasons are set out and amplified in this judgment.