In a successful appeal against a decision of the Solicitors Disciplinary Tribunal ('SDT'), Laing J criticised the SDT for appearing to make findings of dishonesty where no express allegation of dishonesty had been made. Further, the judge's comments can be set against the ongoing debate over the appropriate test for dishonesty in disciplinary proceedings.
K admitted breaching the Solicitors Accounts Rules 1998. The SRA also alleged that in relation to two transactions, K failed to act with integrity. K was not accused of acting dishonestly, and Counsel for the SRA made clear that dishonesty was not in issue. Notwithstanding that, the SDT found that K had been 'intentionally economical with the truth so as to mislead', and that her behaviour was 'objectively dishonest'. Having found the allegations proved, the SDT ordered that K's name be struck from the roll of solicitors.
K appealed the SDT's decision, and the High Court was required to consider (1) whether the statement of allegations was inadequately pleaded such that the whole proceedings were procedurally flawed, and (2) whether the SDT erred by making findings of dishonesty, such that its decision on sanction could not stand.
Laing J considered Singleton v Law Society  EWHC 2915, and Constantinides v Law Society  EWHC 725 to the effect that a finding of dishonesty is particularly serious for a solicitor, that a failure to particularise allegations may be a significant procedural flaw if it impacts on the solicitor's ability to present their case, and that statements of dishonesty allegations should set out the way in which each aspect of the solicitor's conduct is said to be dishonest. However, in the present case, the court held that K did not have any difficulty understanding or replying to the case against her, and that the failure specifically to allege dishonesty did not amount to a significant procedural flaw.
Notwithstanding this, the court quashed the SDT's decision on the basis that the SDT had concluded that K had acted dishonestly (and sanctioned her accordingly) when dishonesty had not been pleaded. As Laing J stated:
'In my judgment, the SDT was wrong to have engaged in any reasoning which suggested that it was considering whether or not the solicitor had been dishonest. It should not have considered, or applied, or referred to, any part of the Twinsectra test. It also means that it should not have used words which did, or might, suggest to a person reading the judgment of the SDT that the SDT had found that the solicitor had in fact between dishonest. But it did all of these things.'
The case was remitted to the SDT for a fresh decision on sanction, now that it had been properly directed to ignore the issue of dishonesty.
The case is a useful reminder to practitioners that allegations of dishonesty should always be specifically particularised, (see also Singleton v Law Society, and, in a healthcare regulatory context, Fish v GMC  EWHC 1269 and Fabiyi v NMC  EWHC 1441). A failure to do so may well undermine part of a Tribunal's findings (though as in the present case, it only undermined the finding on sanction).
The case is also notable for the discussion of dishonesty and the correct test to be applied in SRA proceedings. Laing J concluded that the appropriate test for the present proceedings was the civil test derived from Twinsectra v Yardley  AC 164 (namely that (i) the defendant's conduct was dishonest by the ordinary standards of honest, reasonable people and (ii) that the defendant realised this). Notwithstanding this, she noted that there 'has been some equivocation about the second element of the test', referring to the decisions in Barlow Clowes  UKPC 37, Abu-Ramah  EWCA Civ 1492, and Starglade Properties  EWCA Civ 1314, and that 'this equivocation indicates a growing tendency in the higher courts… to erode the distinction between the two limbs of the test and to downplay the importance of the second limb of the test'. In spite of noting this 'equivocation', it is not clear from the judgment that Laing J reached a definite conclusion on the extent to which the second limb has been eroded.
The case is also of interest because of the wider debate about the test that disciplinary tribunals should apply when considering dishonesty. Laing J did not refer to recent decisions which have debated with whether the Twinsectra test should prevail in disciplinary proceedings over the criminal Ghosh test (see e.g. Kirschner v GDC, or PSA v HCPC/David), but her nuanced approach to Twinsectra highlights that this is very much a 'live' issue. The case is another example of how the current landscape (where a variety of regulators rely on a variety of tests, interpreted in numerous ways) is causing those acting in these cases to ask searching questions over how ostensibly similar types of proceedings can justifiably apply different evidential tests. It would be of considerable benefit if the Court of Appeal (and if needs be, the Supreme Court) were to draw the recent authorities together and give a definitive statement of how regulators should approach the question of dishonesty.