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Dishonesty, Integrity and Standard of Proof in Disciplinary Tribunals
The SRA has launched a consultation on whether the standard of proof to be applied in solicitors’ disciplinary tribunal (‘SDT’) hearings should be changed from the criminal standard (beyond all reasonable doubt) to the civil test (on the balance of probabilities), bringing it into line with almost all other professions.
In this article, we explore the key issues for disciplinary hearings; whether the proposed changes will have any practical impact; and recent developments in the law on dishonesty and integrity.
Professionals have a trusted place in society. With that comes responsibility. The public and society expect high standards from professional people, and professions require the same high standards from their members.
Most professions apply the civil standard of proof at disciplinary hearings. The Bar Standards Board (‘BSB’) has announced that, from April 2019, at disciplinary proceedings, it will apply the civil standard to allegations of professional misconduct. The SRA has proposed that the SDT adopt the same civil standard to allegations of professional misconduct, which would leave the Royal College of Veterinary Surgeons (RCVS) as the only regulator to apply a different standard of proof (‘so as to be sure’ is the test they use for vets).
Regulatory proceedings are not criminal hearings. They are not brought to punish per se; but to protect the profession, clients and the public. It is argued by those in favour of change that it is not in the public interest for solicitors to be able to avoid a disciplinary sanction when it is more likely than not that they have been guilty of professional misconduct, but the tribunal cannot be sure; and that risks putting the interests of the profession before those of the public, enabling someone who is unfit to practice to remain in the profession.
Integrity - adherence to the ethical standards of your profession - is a key requirement in all professional codes of conduct, including guides for doctors, solicitors, barristers, vets, surveyors and accountants. Some codes, including those for doctors, vets, barristers and accountants also specify that members must act with honesty. The SRA’s ten mandatory principles do not specifically mention honesty (or dishonesty), but require members to act with integrity and to maintain public trust.
Integrity and honesty were examined in SRA v Williams. Dishonesty and lack of integrity were held to be separate and distinct: ‘want of integrity arises when, objectively judged, a solicitor fails to meet the high professional standards to be expected of a solicitor. It does not require the subjective element of conscious wrongdoing’. Honesty was described as a ‘base standard’ of society. Professional standards impose ‘a higher obligation to demonstrate integrity in all their work’. These findings were upheld by the Court of Appeal in two appeals from SDT decisions.
In SRA v Wingate, Lord Jackson gave the lead judgment. He examined questions of integrity and honesty. He described a finding of dishonesty as an aggravating feature of any breach of the Principles in the Solicitors’ Code of Conduct. Integrity was described as a ‘broader concept’ than honesty, applying to the wider ethical standards of a profession. At first instance, it was held that a solicitor who signed a sham contract for a loan of £900,000 must objectively lack integrity. Lord Jackson found that, in making his decision, the judge had looked not just at what Mr Wingate did and said; he also took account of the facts which Mr Wingate knew and his state of mind. Lord Jackson held that the right test was applied (even though it pre-dated the Ivey decision on the definition of dishonesty – see below).
The SDT had withdrawn the allegation that Mr Wingate had acted dishonestly. However, Mr Wingate was required to adhere to the ethical standards of his profession. He had failed to act with integrity, and therefore Mr Wingate’s appeal against being struck off the roll of solicitors failed.
Dishonesty – the test
Dishonesty has been a tricky issue in some disciplinary cases because there was uncertainty whether the criminal test for dishonesty was suitable or relevant in disciplinary proceedings. R v Ghosh provided a two-stage test:
1. Whether the defendant was acting dishonestly by the ordinary standards of reasonable and honest people (an objective test); and
2. Whether the defendant himself must have realised that what he was doing was dishonest by the standards of ordinary reasonable and honest people (a subjective test).
A defendant was only criminally dishonest if both questions were answered ‘yes’.
The problem, identified and examined by Lord Hughes in Ivey, was that the lower the defendant’s own standards, the less likely he was to be held criminally liable for his behaviour. Lord Hughes examined the civil standard of proof, which provides an objective test for dishonesty, as set out in Royal Brunei Airlines and Barlow Clowes:
‘Although a dishonest state of mind is a subjective mental state, the standard by which the law determines whether it is dishonest is objective. If by ordinary standards a defendant’s mental state would be characterised as dishonest, it is irrelevant that the defendant judges by different standards …’
Lord Hughes held that there is no logical or principled reason for there to be different definitions of dishonesty in civil and criminal actions. He held that the correct test of dishonesty was the civil test:
‘when dishonesty is in question the fact-finding tribunal must first ascertain (subjectively) the actual state of the individual’s knowledge or belief as to the facts. The reasonableness or otherwise of his belief is a matter of evidence going to whether he held the belief, but it is not an additional requirement that his belief must be reasonable; the question is whether it is reasonably held. Once his actual state of mind as to knowledge or belief of the facts is established, the question whether his conduct was honest or dishonest is to be determined by the fact-finder by applying the (objective) standards of ordinary decent people. There is no requirement that the defendant must appreciate that what he has done is, by those standards, dishonest.’
Strictly speaking, the findings are obiter because dishonesty was not an issue in Ivey. However, the other four Supreme Court Judges agreed and the reformulated test is being applied in criminal proceedings. It will apply to all disciplinary hearings.
Will the proposed change to the standard of proof make any difference?
One of the cases cited by proponents of the change involves the SRA’s failed prosecution of Leigh Day and three of its solicitors. Following a seven week hearing of about 200 allegations, involving four QCs and approximately £10M in costs, the allegations were dismissed. Some believe that a civil standard will avoid the time and expense of such behemoths. We are not so sure.
The Leigh Day decision is interesting because the tribunal’s three members (one lay and two solicitors) could not agree on the credibility and honesty of the witnesses. The majority found that the respondents did not compromise their independence, act in a way to diminish public trust in the profession or lack integrity. They applied the criminal standard of proof, but in many instances found that the SRA had failed to provide any evidence to prove the allegations. It is therefore far from certain that the civil balance of probabilities test would have made any difference to the outcome. The dissenting member (a solicitor) found that even applying the beyond reasonable doubt test, the solicitors acted dishonestly, without integrity, without independence and diminished the public’s trust in the profession.
Fears have been raised by opponents that more professionals face losing their livelihoods as a result of the proposed changes. The recent SDT decision in Beach is instructive. The SDT made various findings of misconduct for failing to adequately advise clients to take independent advice when drafting wills in which the solicitor received a gift. However, applying the Wingate test for integrity, they did not find that the conduct lacked integrity. They found that ‘an honest mistake on what was not a straightforward issue was regrettable but did not indicate that the Respondent had failed to adhere to the ethical standards of the profession’. Allegations of dishonesty were made but, applying the test in Ivey, were rejected because the Respondent had made honest mistakes. The Tribunal did not consider that ordinary, decent people would regard his conduct as dishonest.
The SDT held that honest mistakes were made by a man of integrity. There had been no intention to breach professional obligations, and the Respondent had been open and co-operative with the regulator. Using the criminal test and in the absence of any issues of dishonesty or lacking integrity, a fine was imposed. We respectfully agree with the findings and sanctions imposed by the SDT – whether one applied the criminal or civil standard of proof.
Professionals are not required to be paragons of virtue. Mistakes happen and simple negligence is not necessarily professional misconduct. However, manifest incompetence or recklessness will undermine public confidence in the profession, even if the professional acted with integrity.
Every case is different. Each tribunal must make decisions based upon the unique facts and evidence before it. The key to the outcome of disciplinary cases remains the precise wording of the charges brought and the supporting evidence. A professional disciplinary body has specialist knowledge of the relevant profession and of the ethical standards expected (though recent proposals from the SRA for a lay majority on an SDT hearing are proving controversial). It ought to be well placed to identify breaches. If there are findings of professional misconduct against a member, the tribunal will continue to look at other relevant issues, such as previous disciplinary offences and mitigation. They will assess the seriousness of the misconduct, the harm caused, and any aggravating or mitigating factors before applying sanctions.
No evidence has been produced to prove that the civil standard of proof would make any difference to the outcome of SDT or BSB cases. The SRA’s success-rate is high compared with other regulators who use a lower standard despite (or maybe as a result of) a majority of solicitors sitting on the SDT hearings.
In many cases, the switch from a criminal to a civil standard of proof will probably make no difference. However, balance of probabilities is a lower threshold than beyond reasonable doubt, and should (at least in theory) make it easier to prove an allegation. The changes are also designed, along with the proposal for a lay majority, to counter arguments that regulators, such as the SRA, are more interested in protecting the interests of the professional over those of the public.
We expect the change to be made by the SRA, but do not expect a significant increase in the number of cases brought before the SDT, a noticeable change in outcomes nor significant toughening of the sentencing regime. However, time will tell. Watch this space.
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- R v Ghosh  QB 1053
- Ivey v Genting Casinos  UKSC 67
- Royal Brunei Airlines v Tan  2 AC 378
- Barlow Clowes International Ltd v Eurotrust International  1 WLR 1476
- Wingate v SRA  EWCA Civ 366
- Williams v SRA  EWHC 1478
- SRA v Leigh Day and others Case No./ 11502-2016
- SRA v Beach Case No. 11761-2017