Williams v Solicitors Regulation Authority [2017] EWHC 2005 (Admin)

Case No CO/954/2017[2017] EWHC 2005 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
DIVISIONAL COURT
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 02/08/2017
Before
THE PRESIDENT OF THE QUEEN'S BENCH DIVISION(SIR BRIAN LEVESON)THE HONOURABLE MRS JUSTICE CARR
Between
PETER RHYS WILLIAMSAppellantSOLICITORS REGULATION AUTHORITYRespondent
Patrick Lawrence Q.C.and Scott Allen (instructed by Clyde & Co LLP) for AppellantMichael McLaren Q.C.and Marianne Butler (instructed by Capsticks Solicitors LLP) for RespondentHearing Hearing dates: 26 th July 2017
JudgmentMrs Justice Carr :Introduction
[1]This judgment follows the decision allowing this appeal in part – see Peter Rhys Williams v Solicitors Regulation Authority ([2017] EWHC 1478 (Admin)). For ease of reference and consistency, the definitions and abbreviations there set out are adopted here.[2]By that decision the finding of dishonesty based on the £3.9m representation against Mr Williams was quashed for serious procedural irregularity. The finding of want of integrity based on the F Ltd representations was also set aside for procedural irregularity. The appeal otherwise failed. In particular, the appeal against the finding of want of integrity based on the negotiation representations was dismissed.[3]The following issues then arose: i) Whether this Court should determine sanction or remit that issue to the SDT; ii) The appropriate sanction, were this Court to determine sanction; iii) The outstanding appeal against the SDT’s order for costs; iv) The costs of the appeal against the substantive findings of misconduct.[4]The matter came before the Court for a second hearing on 26th July 2017 to resolve these matters. The Court was invited to determine the first issue (remission) on the basis of written submissions in advance of the hearing. It did so, indicating to the parties that the matter would not be remitted, for reasons to be given later, and that this Court would therefore consider fully the question of sanction at the second hearing.[5]At the second hearing the Court gave its decision on sanction in principle orally, namely that the order striking Mr Williams off the Roll of Solicitors would be quashed and substituted with an order that he be suspended from practice for a period of nine months commencing 9th December 2016, with reasons to follow later. The decisions on costs issues were reserved.[6]This judgment now sets out: i) the reasons for non-remission; ii) the reasons for the decision on sanction; iii) the ruling on Mr Williams’ appeal against the SDT’s order for costs below; iv) the ruling on the costs of the appeal against the substantive findings of misconduct.[7]The relevant facts and background are set out in full in the earlier judgment and are not repeated here. A point has been raised in relation to paragraph 5 of the earlier judgment where I stated that it had been established before the Tribunal that Wilsons’ report to the SRA in March 2013 had been designed to put pressure on Mr Williams tactically in the context of Wilsons’ litigation with Mr Williams. For the avoidance of doubt, the Tribunal declined to make any findings as to Wilsons’ motivation in making its report (see paragraph 61 of the earlier judgment). What is stated in paragraph 5 reflects the gist of the cross-examination of Mr Wiltshire of Wilsons before the Tribunal.

Non-remission

[8]Mr Williams urged the Court to remit the question of sanction to the SDT (either to the (original) Tribunal or to a freshly constituted tribunal). It emerged, however, that Mr Duncan, the second solicitor panel member of the Tribunal, has now retired (on 30th April 2017). Realistically, therefore, the only option would be to remit to a freshly constituted tribunal. The SDT has indicated that such a tribunal could hear the matter in July or August 2017.[9]It was said for Mr Williams that remission would mean that the seriousness of the relevant misconduct would be judged in the first instance by his peers, as the disciplinary scheme contemplates. The SDT is a specialist tribunal and it is well-established that the body best qualified to assess what sanction is required in the interests of the profession is the SDT: see Marinovich v GMC [2002] UKPC 36 (at [28]) and Salsbury v Law Society [2009] 1 WLR 1286 (at [29] to [30]). Reference is made to instances where this court has remitted the question of sanction: Kiani v SRA [2015] EWHC 1981 (Admin) (at [102]); SRA v Ali Chan [2015] EWHC 2659 (Admin) (at [66]); and SRA v Wingate [2017] EWHC 505 (at [19] to [22]).[10]It is a matter of judgment in each case as to whether to remit – see for example Singleton v The Law Society [2005] EWHC 2915 (where it was common ground that the appellate court should address sanction, having quashed a finding of dishonesty).[11]There were compelling reasons for this Court to determine sanction: i) The Court is fully informed and able to deal with the question of sanction speedily at the second hearing. The judgment (at paragraphs 104 to 111 in particular) addresses the detail of the negotiation representations; ii) The proven misconduct does not turn on technical or specialist points of practice or procedure. In any event, the Court has the benefit of the Tribunal’s detailed findings on the negotiation representations, which have not been disturbed, including findings as to Mr Williams’ credibility as a witness on the negotiation representations; iii) To remit to a freshly constituted tribunal would involve an unnecessary waste of time and significant extra costs on both sides. Any such hearing would be likely to be longer. A new three member panel would be required to read and digest significant amounts of material and detail afresh. It is to be noted that on this appeal the Court has been provided with over 20 bundles. As Mr Williams accepts, there would need to be new (fuller) submissions for a tribunal coming to the matter for the first time.[12]For these reasons, we decided that the question of sanction should remain with this Court.

Sanction

[13]Following the appeal, Mr Williams falls to be sanctioned for: i) Failure to act with integrity (in breach of Rule 1.01 of the Solicitors’ Code of Conduct 2007 and (from October 2011) Principle 2 of the SRA Principles 2011): the negotiation representations; ii) Failure to behave in a way that maintains the trust that the public places in Mr Williams and in the provision of legal service (in breach of Rule 1.06 of the Solicitors’ Code of Conduct 2007 and (from October 2011) Principle 6 of the SRA Principles 2011): the negotiation representations and other matters based on concessions made by Mr Williams as recorded in paragraph 89.95 of the judgment.[14]The SRA maintains that the sanction of striking-off should stand. Mr Williams contended in writing that a lesser (unspecified) sanction should be imposed. When pressed orally as to what he contended would be an appropriate sanction, Mr Lawrence QC for Mr Williams submitted that the imposition of a reprimand and severe fine would be appropriate, alternatively that no penalty imposed should inhibit Mr Williams from returning now to work as a solicitor. In essence, the submission was that he has been “punished enough”.

Powers

[15]S. 47 of the Solicitors Act 1974 provides that the powers of the SDT include: i) the imposition of a reprimand; ii) the imposition of an unlimited financial penalty payable to HM Treasury; iii) the imposition of restrictions upon the way in which a solicitor can practise; iv) suspension from practice indefinitely or for a specified period; v) striking off the Roll.[16]Other orders which the SDT can make include the making of no order, termination of a period of suspension and restoration to the Roll following strike-off.

The SDT’s Guidance Note on Sanctions – December 2016 (“the Guidance”)

[17]The Guidance identifies (at paragraph 7) the following three stages in the sanction process (as stated by Popplewell J in Fuglers and others v Solicitors Regulation Authority [2014] EWHC 179): i) Assessment of the seriousness of the misconduct (by reference to culpability, harm, aggravating and mitigating factors); ii) Identification of the purpose for which sanctions are imposed; iii) Choice of sanction which most appropriately fulfils that purpose, having regard to the seriousness of the misconduct.[18]In determining the appropriate sanction, the SDT will start from the least serious option.[19]It is common ground that striking off may be appropriate even in the absence of a finding of dishonesty: see paragraph 48 of the Guidance where it is stated that such a course may be appropriate where: i) The seriousness of the misconduct is in itself very high; and ii) The departure by the respondent from the required standards of integrity, probity and trustworthiness is very serious.[20]Paragraph 49 goes on:
“In such cases, the Tribunal will have regard to the overall facts of the misconduct, and in particular the effect that allowing the respondent’s name to remain on the Roll will have upon the public’s confidence in the reputation of the legal profession-see in particular Solicitors Regulation Authority v Emeana, Ljewere and Ajanaku [2013] EWHC 2130 (Admin).”
[21]In SRA v Emeana and others (supra) Moses LJ stated:
“[26] The principle identified in Bolton means that in cases where there has been a lapse of standards of integrity, probity and trustworthiness a solicitor should expect to be struck off. Such cases will vary in severity. It is commonplace, in mitigation, either at first instance or on appeal, whether the forum is a criminal court or a disciplinary body, for the defendant to contend that his case is not as serious as others. That may well be true. But the submission is of little assistance. If a solicitor has shown lack of integrity, probity or trustworthiness, he cannot resist striking off by pointing out that there are others who have been struck off, who were guilty of far more serious offences. The very fact that an absence of integrity, probity or trustworthiness may well result in striking off, even though dishonesty is not proved, explains why the range of those who should be struck off will be wide. Their offences will vary in gravity. Striking off is the most serious sanction but it is not reserved for offences of dishonesty.”
[22]Mr Williams’ lawyers have carried out researches which suggest that between 1st January 2016 and 30th June 2017 in 3 of the 21 cases where the respondent was found to have lacked integrity but not to have been dishonest or guilty of a criminal offence, the respondent was struck off. It is submitted for Mr Williams that, unlike the position with a finding of dishonesty, where there is a clear presumption that the solicitor will be struck off, there is no such presumption with a finding of want of integrity.[23]I accept, nor does the SRA suggest to the contrary, that there is no presumption of striking-off as such in cases involving findings of want of integrity. Each case falls to be decided on its own facts and, as Moses LJ stated, offences of acting without integrity will vary in gravity. They can justify striking-off or not.

Seriousness

[24]As to culpability, the negotiation representations consisted of 4 separate (mis)representations made by Mr Williams to Northern Rock in two letters (dated 22nd June and 1st November 2011) and 1 telephone conversation (on 16th August 2011), as set out in paragraph 104 of the earlier judgment. The Tribunal found that Mr Williams had made the representation in the letter dated 22nd June 2011 “with the sole purpose of seeking make the deal more attractive to Northern Rock”. It was false and misleading. In relation to the representation in the letter of 1st November 2011 the Tribunal determined that Mr Williams had represented that “the Client was genuinely worried about a reduction in the offer price when in actuality, the Respondent knew that the Client himself wanted to reduce the price”. It was false and misleading.[25]At paragraphs 108 to 110 of the earlier judgment I stated that these findings were “evidently sustainable”. In particular, it was unrealistic to submit that the statements represented merely “loose language”, as had been submitted. They involved “deliberate words used as part of a theme pursued by Mr Williams, on more than one occasion, over a period of months, and designed to create (and actually creating) a false impression”. This was not “a grey area”. Nor were the findings undermined by Mr Williams’ disclosure at the outset to Northern Rock that the proposed purchaser was a “family friend”, or the fact that Mr Williams knew that Northern Rock had registered this information.[26]The Tribunal found that Mr Williams had made the negotiation (mis)representations “consciously and deliberately”. This demonstrated a manifest lack of integrity. They were made “to give the false impression that the Client was in negotiation with the purchaser; that was simply not the case”. It found Mr Williams’ evidence in this area to be “self-serving and unconvincing”.[27]I would reject the submission that the negotiation representations are “at the low end of the spectrum of matters justifying a finding of want of integrity”. Mr Williams’ previous decision not to act in 2010, the imposition of conditions on his retainer in 2011, the fact that he had told Northern Rock earlier that the purchaser was a connected party and that he was dealing with a structure that, whilst lawful, was artificial to a degree are matters which do not bear directly on the question of seriousness. I bear in mind that Mr Williams was not intending to procure any personal or improper gain and that he was not in a strict position of trust viz-a-viz Northern Rock.[28]But, as reflected in the findings in paragraphs 108 and 109 of the earlier judgment, there is a high degree of culpability in circumstances where: i) Mr Williams consciously and deliberately made misrepresentations to a third party bank; ii) Mr Williams intended the third party bank to be rely on them. Two of the misrepresentations were made on Wilsons’ headed notepaper. The misrepresentations were so as to avoid potentially losing the deal through unwarranted delays and/or complications; iii) The misrepresentations were part of a theme pursued by Mr Williams to create (and actually creating) a false impression; iv) The misrepresentations were made on three separate occasions over a period of five months; v) Mr Williams was directly responsible for the misrepresentations. They were his words; he was under no pressure to use them; vi) Mr Williams was a highly experienced practitioner fully aware of his professional obligations.[29]As for harm, Northern Rock did not suffer any loss as a matter of fact. The Tribunal found that Mr Williams had not taken unfair advantage of Northern Rock. However, Mr Williams clearly created a false impression to Northern Rock, with at least the risk that Northern Rock would be disadvantaged. To use the words of the Guidance, there was harm that “might reasonably have been foreseen to be caused” by the misconduct. As evidenced by, for example, Mr Williams’ attendance note recording advice to the Client on 13th March 2012, Mr Williams was always of the view that if Northern Rock made a connection between the purchaser and the Client, the “deal could be lost”. The fact that he had earlier disclosed that the purchaser was a family friend does not undermine the gravity of this finding. There was no inconsistency - as Mr Williams clearly recognised when making the representations that he did – in the purchaser being a family friend and at the same time having genuine arms’ length negotiations with the Client. Nor did the fact that Northern Rock would be relying on its own valuations render the (mis)representations harmless. Mr Williams made the representations for a reason – in order to seek to influence Northern Rock and to avoid the transaction falling through. There is also significant harm to the reputation of the legal profession when someone in Mr Williams’ position departs significantly from the standards of integrity to be expected of him.[30]As for aggravating factors beyond the matters identified as giving rise to a finding of high culpability, in addition to the conduct not being limited to a single episode or of being of very brief duration, the striking feature is Mr Williams’ lack of insight. Mr Lawrence took the Court to Mr Williams’ answer to the Rule 5 statement where, in respect of the letters of 22nd June and 1st November 2011 (and some other correspondence), the following was stated:
“135.7 In respect of those instances in which he now accepts that his language was apt to create an inaccurate impression, Mr Williams admits that, in drafting documents which were open to misinterpretation, he breached Principle 6 of the Code of Conduct: the public are entitled to expect solicitors to write documents which are clear and do not create an inaccurate impression. It is denied however that Mr Williams intended to mislead any person in any material way, or to induce any person to act to their detriment.”
[31]Mr Lawrence submitted orally that this was an admission “of great moment” for Mr Williams. At the conclusion of the answer, it was stated:
“55. Mr Williams apologises sincerely for the mistakes which were made and which he has acknowledged within this Answer. He accepts that some sanction in respect of his conduct may be appropriate. He does not however believe that he acted at any stage dishonestly or without integrity….”
[32]These statements do not come close to showing insight into the finding of want of integrity that has now been made against him. Indeed, Mr Williams expressly denied believing that he had lacked integrity when making the negotiation representations. Before the SDT, the negotiation representations were presented repeatedly as being merely the product of “loose wording”. The Tribunal has found otherwise. Even now, Mr Williams does not appear to accept the Tribunal’s finding of want of integrity. Thus, before this court, the references to negotiations were described as “not well expressed” and as “unwise references”, far removed from justifying any finding of want of integrity. Even if it were relevant that Mr Williams was facing a very wide-ranging set of allegations before the Tribunal, the appeal on sanction has focussed on the finding of want of integrity. Despite the findings at paragraphs 108 and 109 in the earlier judgment, it has been submitted that the negotiation representations fall “at the low end of the spectrum of matters justifying a want of integrity”. Lack of insight is therefore a relevant factor on the present facts for the purpose of assessing the appropriate sanction.[33]As for mitigating factors, the misconduct was not the result of any deception. There was no loss to make good. Although there was no self reporting, Mr Williams did make some concessions, as indicated above, and he did co-operate in the investigation. Whilst it is clear that by around the spring of 2012 Mr Williams’ position within Wilsons was extremely difficult and a bitter partnership dispute had emerged, it is not clear that as at June 2011, for example, when Mr Williams made the first of the negotiation representations, that was the position.But it is clear that Mr Williams was at all material times a very busy solicitor, working very long hours, with many clients and many active files.[34]Standing back, and taking all relevant factors into account, in my judgment this was serious misconduct, but not misconduct at the highest level.

Purpose of sanction

[35]In Bolton v Law Society [1994] 1 WLR 1286 (“Bolton”) Sir Thomas Bingham MR identified the twin functions of punishment and deterrence:
“Any solicitor who is shown to have discharged his professional duties with anything less than complete integrity, probity and trustworthiness must expect severe sanctions to be imposed upon him by the Solicitors Disciplinary Tribunal…. ... a penalty may be visited on a solicitor ... in order to punish him for what he has done and to deter any other solicitor tempted to behave in the same way …. … to be sure that the offender does not have the opportunity to repeat the offence; and … the most fundamental of all: to maintain the reputation of the solicitors' profession as one in which every member, of whatever standing, may be trusted to the ends of the earth … a member of the public … is ordinarily entitled to expect that the solicitor will be a person whose trustworthiness is not, and never has been, seriously in question. Otherwise, the whole profession, and the public as a whole, is injured. A profession's most valuable asset is its collective reputation and the confidence which that inspires.”

Choice of sanction

[36]At the stage of determining what is a fair and proportionate sanction, matters of purely personal mitigation may be relevant. Some caution in this regard needs to be exercised (see paragraph 53 of the Guide). As was stated in Bolton:
“Because orders made by the Tribunal are not primarily punitive, it follows that considerations which would ordinarily weigh in mitigation of punishment have less effect on the exercise of this jurisdiction than on the ordinary run of sentences imposed in criminal cases. It often happens that a solicitor appearing before the tribunal can adduce a wealth of glowing tributes from his professional brethren. He can often show that for him and his family the consequences of striking-off or suspension would be little short of tragic. Often he will say, convincingly, that he has learned his lesson and will not offend again…..All these matters are relevant and should be considered. But none of them touches the essential issue, which is the need to maintain among members of the public a well-founded confidence that any solicitor whom they instruct will be a person of unquestionable integrity, probity and trustworthiness….The reputation of the profession is more important than the fortunes of any individual member. Membership of a profession brings many benefits, but that is a part of the price….”
[37]Mr Williams is 61 years old and has had a hitherto distinguished and successful career of over 35 years. A file of high quality character evidence was before the Tribunal which this Court has also considered; the references include references from Queen’s Counsel, the resident factor at Balmoral and General Sir Peter Wall. The partnership to which Mr Williams had moved from Wilsons, Michelmores, has stood by Mr Williams. It is also right to remember that there was excessive delay in the SRA’s progress of Wilsons’ complaint of March 2013. It took until October 2014 for the SRA to write substantively to Mr Williams. The Rule 5 statement was not served until August 2015. No allegation of dishonesty was made until December 2015. Mr Williams has suffered serious financial hardship upon being struck off, together with significant adverse publicity, and would face financial ruin if he were to remain struck off.[38]Bearing all these matters in mind, we concluded that the seriousness of the misconduct is such that neither a restriction order, reprimand nor a fine was a sufficient sanction or in all the circumstances appropriate. Although there is a need to protect both the public and the reputation of the legal profession from future harm by Mr Williams by removing his ability to practise, neither the protection of the public nor the protection of the reputation of the legal profession justified striking off the Roll. Mr Williams’ professional performance, including a lack of sufficient insight on his part, demonstrates the need to underline the gravity of his conduct. Nine months is a term that will both punish and deter whilst being proportionate to the seriousness of the misconduct. Public confidence demands no lesser sanction.[39]It was in those circumstances that the Court decided that Mr Williams should be suspended from practice for a period of nine months commencing 9th December 2016.

Appeal against the SDT’s order for costs below

[40]This part of the appeal has in a sense been overtaken by events, since the Tribunal’s finding of dishonesty has been quashed, and the appropriate costs order below falls to be assessed in a different context.

The order below

[41]The Tribunal ordered Mr Williams to pay 70% of the SRA’s total costs (of £279,000) in the sum of £195,000. It held (at paragraph 108 of the judgment) that costs should be reduced to reflect the SRA’s lack of success on certain issues:
“...the prosecution had been properly brought and that the costs claimed were proportionate. The Tribunal had found 3 of 5 allegations and dishonesty proven. The 2 allegations found not proved had been dealt with very shortly during the hearing. Further, it was appropriate to reduce the costs to reflect the fact that not all of the allegations had been proved, and that the issues in relation to market value had been communicated to the Applicant at an early stage...”

Costs order below perverse

[42]On behalf of Mr Williams, Mr Lawrence submits that the Tribunal’s decision, and the underlying reasoning, were perverse and would have been unsustainable even if the substantive appeal had failed: i) There was no rational basis upon which the Tribunal could have found that the prosecution as a whole was “properly brought”: a) the case based on devising the fraudulent scheme was that the scheme could only proceed by partaking in a transaction that might be set aside as a transaction at an undervalue and by making misrepresentations to third parties. It was inevitably dismissed. There was no prospective transaction at an undervalue and the proposed transaction did not necessitate misrepresentation to third parties; b) there was no basis whatsoever for bringing a case that Mr Williams lied about the value of the property, or the fact that it was in negative equity. It was “deeply inappropriate” to do so in the absence of credible expert evidence that the property’s value was well in excess of £2.2 or £2.3million; c) the allegation that the offer by the special purpose vehicle to purchase the property was a sham was contrary to well-established principles of company law; d) the allegation of misleading the Court was unsupported by a transcript, but more importantly, the alleged misrepresentations as to market value were again unfounded and the alleged misrepresentation based on an implication that the offer was from an independent third party was hopeless; ii) To describe the case as one in which “3 of 5” allegations had been proven did not reflect the substance of what had occurred; iii) To state that the “2 allegations” which had failed “had been dealt with very shortly during the hearing” was very strange when almost the entirety of the hearing had been concerned with the wider case which had been dismissed. Further, virtually all of the hearing before the Tribunal dealt with matters upon which the SRA’s case failed. The cross-examination of Mr Williams in respect of the ‘negotiation representations’ took up no more than half an hour of the eight and a half days that were spent dealing with the case at trial. It was the other allegations which failed which took up almost the entirety of the trial.[43]Mr Lawrence also criticised the Tribunal’s decision to proceed to hear submissions and decide the question of costs before the parties were aware of the full reasons for its decisions, although this was not pressed as a substantive ground of appeal. Mr McLaren QC for the SRA informed the Court that it is common practice for the SDT to decide the issue of costs in this way. It is said that it avoids the need for further hearings and unnecessary costs. There is nothing offensive in principle about that procedure, given that the parties know the gist and key points of the SDT’s substantive decision.[44]It is not for the Court on an appeal such as this to interfere with what is said to be a common practice in the SDT, and nothing ultimately in this appeal turns on the point. I would however make the obvious indication that what is right and fair will depend on all the circumstances of each case. The larger the costs, and the longer and more complex the hearing, the stronger will be the case for the parties’ submissions on costs to be received after the distribution by the Tribunal of its full reasons (if appropriate, in writing only).

The SRA’s response

[45]The SRA submits that there was nothing incorrect in the Tribunal’s approach to costs. No error of law has been identified; there was no failure to take into account relevant evidence; there was no failure to provide proper reasons.[46]As to the suggestion that the order was perverse and unsustainable on the basis of the Tribunal’s findings, the Tribunal did find 3 of 5 allegations and dishonesty proven and the 2 allegations not proven had been dealt with very shortly. Mr Williams’ position that those parts of the SRA’s case not concerned with the value of the property were only trivial is wrong. They were not trivial as a matter of professional misconduct; they also required the parties to grapple with the entirety of the documents and Mr Williams’ related evidence.[47]As to the suggestion that the case as to the value of the property was improperly advanced, the Tribunal had well in mind Mr Williams’ submission that a large part of the case against him should not have been pleaded. The Tribunal was entitled to conclude that the case had been properly brought (and certainly cannot be said to have been plainly wrong in so concluding). There were clear factors requiring Mr Williams to explain what were in places very curious documents. There were inconsistencies between the documents and Mr Williams’ written evidence that justified requiring him to answer the allegations and be cross-examined on the documents. Mr Williams’ oral evidence was his “best evidence”, as was expressly submitted on his behalf.[48]The SRA submits that the costs order below should not be disturbed following the outcome of the substantive appeal. A mechanistic approach to costs would be inappropriate. The surviving adverse findings are on any view serious. Negligible costs of the hearing before the Tribunal were occupied by the matters giving rise to the finding of dishonesty or the finding of want of integrity relating to the F Ltd representation, that being the gravamen of the complaint on appeal. Where those allegations on which the SRA failed had nevertheless been properly brought, the starting point should be that the costs should be borne by Mr Williams and not by the SRA. The SRA submits that no reduction beyond the already significant reduction of 30% to the SRA’s (manifestly reasonable) costs should be made.

Discussion

[49]The Tribunal has a very broad discretion under rule 18 of the Solicitors (Disciplinary Proceedings) Rules 2007 to make such order as to costs as it thinks fit, including(a) disallowing costs incurred unnecessarily; or(b) ordering that costs be paid by any party judged to be responsible for wasted or unnecessary costs, whether arising through non compliance with time limits or otherwise. It may make an order as to costs against a respondent even where no allegation of misconduct is proved against a respondent (see rule 18(4)(b)). An example of this is SRA v Libby (Case No. 11433-2015) where the SDT found (at [56]):
“The Tribunal found that the prosecution had been very properly brought and had some sympathy with the Applicant’s submission that the Respondent had brought the case on himself. Although the Allegations had not been proved to the required standard that was not to say that the Respondent’s conduct was entirely blameless. The costs claimed were proportionate and it was right that the Respondent pay the entirety of the investigation costs.”
The SDT then held that the costs of the proceedings themselves should be reduced to reflect that fact that none of the allegations had been proved and to take account of the respondent’s means. The respondent was ordered to pay 50% of the SRA’s costs of the proceedings.[50]In Baxendale-Walker v The Law Society [2008] 1 WLR 426 (at [39]) it was confirmed that an order will not ordinarily be made against a regulator without good reason – for example if the complaint has been improperly brought, or is to be regarded as “a shambles from start to finish”:
“…Unless the complaint is improperly brought, or, for example, proceeds….as a “shambles from start to finish”, when the Law Society is discharging its responsibilities as a regulator of the profession, an order for costs should not ordinarily be made against it on the basis that costs follow the event. The “event” is simply one factor for consideration. It is not a starting point. There is no assumption that an order for costs in favour of a solicitor who has successfully defeated an allegation of professional misconduct will automatically follow. One crucial feature which should inform the tribunal’s costs decision is that the proceedings were brought by the Law Society in exercise of its regulatory responsibility, in the public interest and in the maintenance of proper professional standards. For the Law Society to be exposed to the risk of an adverse costs order simply because properly brought proceedings were unsuccessful might have a chilling effect on the exercise of its regulatory obligations, to the public disadvantage.”
[51]In Broomhead v Solicitors Regulation Authority [2014] EWHC 2772 Nicol J held (at [42]) that, where a solicitor had successfully defended himself against certain charges, it did not follow that the solicitor should pay the SRA’s costs. The SRA should “shoulder its own costs” where it had not made out its case.[52]Mr Williams submits that in all the circumstances described above, and applying the Broomhead principle, there is no justification for making Mr Williams pay more than a very small proportion of the SRA’s costs. That liability should be offset against the costs that the SRA should pay in respect of its failed allegations that should never have been brought.[53]An appellate court should be slow to interfere with the exercise of the discretion. In SRA v Anderson [2013] EWHC 4021 (at [60]) Treacy LJ stated :
“On an appeal this court should only interfere if there is an error of law, or a failure to take account of relevant evidence, or a failure to provide proper reasons.”
However, as already indicated, the position now is that the single finding of dishonesty against Mr Williams has fallen away (albeit that significant findings against him remain). The landscape is different.[54]Beyond that, it could be said in a broad sense that the proceedings were “properly brought”, in the sense that it was in the public interest to explore the serious issues in relation to Mr Williams’ conduct, including the inconsistencies in areas of his written evidence and the documents. Moreover, and in any sense, the proceedings in fact succeeded in very material part.[55]But in a narrow sense, at least, there is force in the submission that at least some of the allegations against Mr Williams should not have been made. I have mind in particular the allegation that Mr Williams lied to the Court when he stated that an offer had been made on the property. The suggestion was that – to Mr Williams’ knowledge and understanding – he was thereby representing that the offer was from an independent third party, when in fact it was not. This was a serious allegation of misleading the Court. The basis of the alleged implication is difficult to identify. It was not pursued with any vigour before the Tribunal. Mr Williams was not cross-examined on it. The Tribunal dismissed it. It was at least a highly questionable allegation. Equally, the allegation that Mr Williams lied about the open market value of the property being at £2.2million, in circumstances where there were multiple independent valuations showing the open market value of the property to be just that, where the SRA was not in possession of an independent valuation to the contrary, and where the property ultimately sold for £2.4 million, was at least highly questionable.[56]In these combined circumstances, it is appropriate for this Court to set aside the costs order below and exercise its discretion afresh.[57]Bearing in mind the regulatory context and the policy underlying the principle in Baxendale-Walker, a fair and just costs order is that Mr Williams should pay the sum of £60,000 towards the SRA’s costs before the Tribunal. This reflects the fact that, on the one hand, the SRA was discharging its responsibilities as a regulator of the profession and succeeded in proving a serious charge of want of integrity which has led to Mr Williams’ suspension from the profession and, on the other hand, that aspects of the prosecution were unsatisfactory and the central overarching allegations against Mr Williams failed.

The costs of the appeal against the substantive findings of misconduct

[58]Mr Williams seeks his costs of the appeal in relation to the substantive findings of the Tribunal on misconduct which involved a 2½ day hearing last month.[59]Mr Williams says that he has succeeded in this appeal. The main focus of the appeal was the finding of dishonesty, which was challenged on a number of grounds. The SRA had a choice. It could have conceded the appeal on that point. Alternatively, it could have accepted that there were serious procedural irregularities, and left the matter to the appeal court. Instead, it sought unsuccessfully to sustain the dishonesty finding. Mr Williams points also to the appeal on the F Ltd representations. Following a concession during the appeal, Mr Williams succeeded on that issue as well.[60]Whilst Mr Williams’ challenge to the finding of a want of integrity failed, Mr Williams submits that most of the points that were taken in that respect would have been advanced in any event. There should therefore be no, alternatively only a very modest, discount from the “usual order” that the SRA should pay Mr Williams’ cost of the appeal.[61]Mr Williams recognises that his challenge to the Tribunal’s approach to the drafting of the judgment has failed, but that did not add significantly to the costs incurred by the SRA. Not much time was taken up in oral argument, and the SRA did not make extensive submissions on the point. Again, if any discount is made on this ground, it should be of a very modest nature.[62]The SRA submits on the other hand that there should be no order as to costs. The findings of want of integrity have been maintained, with the result that a severe sanction is inevitable. Mr Williams’ costs are likely to be have vastly higher than those incurred by the SRA (which stand at around £72,000). It would be unfair and oppressive for the SRA, a responsible regulator, to shoulder such excessive costs. The costs of challenge through detailed assessment would be totally disproportionate.[63]It is common ground that the principle in Baxendale-Walkerv Law Society (supra) does not apply on appeal. In general, the unsuccessful party on appeal should pay the costs of the successful party: see Kiani v SRA [2015] EWHC 1981 (Admin)and Bass v Ward [2013] 5 Costs LO 651.[64]I do not accept the overarching submission for Mr Williams that he is “in substance, the overall winner”. Here, each party has succeeded in important part: Mr Williams has succeeded in overturning the finding of dishonesty against him based on the £3.9m representation, which appeal the SRA resisted, and the F Ltd representation. The SRA has succeeded in upholding the finding of want of integrity, on which appeal Mr Williams failed. He has been made the subject of severe sanction as a result, in the form of a nine month suspension order.[65]A significant amount of time was spent on each of the challenges to the findings on the £3.9m representation and the negotiation representations. Each required an examination of the background to Mr Williams’ retainer by the Client and his conduct of it. Each required a detailed examination of the rule 5 statement and the authorities relating to the pleading and advancing of serious allegations of fraud and want of integrity. Each required a detailed examination of the Tribunal’s judgment as a whole. This without more points towards an order that there should be no order as to costs. The parties’ respective successes balance each other out.[66]To the extent that it could be said that Mr Williams has had the greater victory – in overturning the most serious finding of dishonesty against him, it should be pointed out that Mr Williams failed in his outright attack on the Tribunal’s judgment as a whole, including by reference to the allegation of judicial plagiarism. This allegation was not a makeweight in terms of time and money, as Mr Williams now suggests. It created significant additional expense, including additional correspondence with the Court, and at least one additional skeleton argument and further authorities. It led to the potential adjournment of the hearing as a whole.[67]In all the circumstances, the fair and just outcome is that there should be no order as to costs in relation to the appeal against the Tribunal’s substantive findings of misconduct.

Conclusion

[68]For these reasons, in my judgment, the proper outcome should be: i) an order suspending Mr Williams from practice for a 9 month period commencing 9th December 2016 will be substituted for the order striking Mr Williams off the Roll of Solicitors; ii) the order that Mr Williams should pay £195,000 towards the SRA’s costs of the proceedings below will be set aside. Instead, Mr Williams should pay the sum of £60,000 towards the SRA’s costs of the proceedings below; iii) no order as to the costs of the appeal against the Tribunal’s substantive findings of misconduct.

Sir Brian Leveson P:

[69]I agree. I trust that when his suspension is concluded, Mr Williams will be able to restore for himself the reputation that he previously held.