A recent case presented the Court of Appeal with an opportunity to consider the current state of the law concerning dishonesty on the part of solicitors.
The court’s decision in Law Society v Doocey has yet again highlighted the serious consequences that await those who behave in a manner that brings the profession into disrepute, while also offering a helpful clarification as to the nature of the test to be applied in determining whether a person has been guilty of dishonesty in the disciplinary context.
Shortly after her admission to the Roll in 2014, Ms Doocey established a practice as a sole practitioner in rural Ireland. She was initially very successful. In May 2018, however, a significant number of issues of concern were identified during a solicitors’ accounts investigation, in particular that a deficit of approximately €169,000 had arisen on her client account.
A complaint was made to the Solicitors Disciplinary Tribunal and, ultimately, the solicitor admitted 24 separate allegations of misconduct.
In addition to acknowledging that she had allowed a deficit to arise on her client account, she accepted that she had diverted monies between client accounts to conceal the deficit that had accrued; that she had created a false statement of account for the purposes of concealing her actions; that she had failed to record transactions for the purposes of concealment; and that she improperly transferred monies from her client account into her office account.
Overwhelmed
In mitigation of sanction, the solicitor explained that she had become overwhelmed as her practice had grown, the pressures on her time being such that she had not kept on top of her accounting obligations.
The deficit that had developed was caused, she said, by naivety, inexperience, and a haphazard approach to bookkeeping, rather than any malign or dishonest motivation.
She was resolute in maintaining that she had not benefitted personally from the shortfall in the account and pointed to the fact that, by the time of the hearing, the deficit had been made good using monies sourced from her family and, thus, there was no question of any client having suffered a financial loss.
The tribunal decided against recommending strike-off, suggesting instead that a strict set of conditions be attached to the solicitor’s practising certificate, effectively requiring third-party oversight of all of the practice’s financial dealings.
The President of the High Court declined to follow the tribunal’s recommendation, concluding that nothing short of strike-off would be appropriate, having regard to the dishonesty inherent in the solicitor’s admitted misconduct.
In her view, notwithstanding the mitigation that had been put forward on the solicitor’s behalf, strike-off was necessary – not only to maintain the reputation of the profession, but also to mark the court’s disapproval of the solicitor’s conduct; to discourage others in the profession from engaging in similar conduct; and to adequately protect the public:
“Whilst the sanction of a strike-off is a harsh one, it is the sanction deployed frequently in cases of dishonesty of this nature, and the severity of the sanction cannot be mitigated, or even contextualised, in my view, by the respondent’s relative inexperience or the fact that she was practising unsupported in a rural area. It is a cardinal and basic rule that solicitors must never touch clients’ monies. Not only did the respondent repeatedly breach that rule, but she dishonestly sought to cover her tracks until she was caught by her own professional body who unravelled the falsitude of her actions.”
Court of Appeal
The solicitor appealed to the Court of Appeal, arguing, among other things, that the president had fallen into error, first, in characterising her conduct as being dishonest and, second, in imposing a sanction that was disproportionate in the light of the mitigating factors that existed.
In their judgments, both Donnelly J and Collins J referenced the well-established rationale underpinning the strict approach taken by the courts when sanctioning solicitors who have been guilty of dishonesty.
For his part, Collins J referred to the following passage from the 2001 decision of Keane CJ in Re Burke, a case involving an application for restoration to the Roll made by a solicitor who had previously been struck off:
“A member of either branch of the legal profession enjoys rights and privileges in representing and advising members of the public denied to others. The public are, accordingly, entitled to repose a high degree of trust in both barristers and solicitors in the conduct of their respective professions.
“Unlike barristers, solicitors are regularly entrusted with the custody of monies belonging to their clients and, if public confidence in the solicitors’ profession is to be maintained, any abuse of that trust inevitably must have serious consequences for the solicitor concerned.
“Viewed in that context, the range of cases in which a solicitor, who has been struck off because of dishonesty, can properly be restored to the register pursuant to subsection (4) is, of necessity, significantly limited.”
Both judges quoted from the 2016 judgment of McKechnie J in Carroll v Law Society and, in particular, his statement to the effect that, because honesty was the “common strand” permeating all levels of the profession, “where proven dishonesty is involved, with or without the oft-associated features of misrepresentation, concealment and deceit, such misconduct will almost always feature at the highest level of the scale which I have referred to: therefore, in such circumstances, the sanction of dismissal will be a front-line consideration”.
The solicitor’s contention that her conduct in this particular case was not dishonest was given short shrift by the court. In support of her position, it had been suggested that she had not engaged in any conscious dishonesty and, rather, had acted foolishly and naively.
The court made it clear, however, that dishonesty in the disciplinary context was to be assessed objectively; in other words, that the subjective belief of a given solicitor as to the appropriateness or otherwise of their conduct was immaterial.
As Donnelly J explained: “I am satisfied that there is also no basis for the argument that dishonesty in the context of disciplinary proceedings in this jurisdiction must be judged on a standard that leaves it to the individual solicitor’s understanding of dishonesty.
“The rationale of the disciplinary code would be shaken if the amoral solicitor, who simply does not advert to the possibility of dishonesty, can escape severe sanction for their otherwise deliberate actions which are objectively dishonest.”
Thus, a solicitor’s actions in a given set of circumstances are to be subjected to a value judgement based upon the standards of right-thinking members of society, not his or her own subjective belief or understanding of what is right and wrong.
Once the solicitor’s admitted misconduct was assessed on that basis, a finding of dishonesty was inevitable. After all, she had, on numerous occasions, knowingly used money belonging to one client to plug a hole in another client’s account. What’s more, she had later created false records to conceal what she had done.
Donnelly J summarised her finding on this issue in the following terms:
“At issue here was systematic teeming and lading, wrongfully crediting money and misdescribing it in the client-account books, on occasion concealing shortfalls in clients’ account books and, on one occasion, taking money from one client account and lodging it to the office account, and failing to record this receipt and payment in the client books of account, thereby concealing the misappropriation …
“This is a system of behaviour that is, by community standards, fundamentally dishonest. This standard would apply to any person who was entrusted to deal with monies belonging to another person.
“It is a standard of behaviour that is a fortiori fundamentally dishonest when applied to a solicitor for whom standards of probity, honesty and trustworthiness are basic human attributes necessary for a person to be a fit and proper person to practise as one.”
The court was equally unimpressed by the argument that the sanction was disproportionate. While acknowledging that no client had suffered any actual loss as a result of the solicitor’s actions, Donnelly J was satisfied that the president had been fully entitled to take the view that it was a cardinal and basic rule that solicitors must never touch clients’ monies; that the fact that the shortfall was later made good did not mitigate against what Donnelly J described as the “extensive and deliberate manipulation of accounts and the mismanagement of client funds”; and that, accordingly, strike-off was the appropriate sanction to impose.
Regulatory framework
With the enactment of the Legal Services Regulation Act 2015, the regulatory framework within which the legal profession operates has changed dramatically. In the case of solicitors, a bifurcated system has been created for dealing with complaints, whereby the Law Society has retained its role in regulating compliance with the Solicitors Accounts Regulations, with the Legal Services Regulatory Authority assuming responsibility for all other classes of complaint.
Whichever process is applicable, the High Court retains a role when it comes to the imposition of the more severe types of sanction. The decision in Doocey offers a salutary reminder to the profession that those who are found to have behaved dishonestly should not expect leniency from the courts.
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