Solicitor and partner Mr Anis Waiz of Mohindra Maini LLP continues his critical review of current case law. This is a case of crucial importance to all lawyers and a valuable lesson in client care and dealing properly and in good fashion with the regulator.
Least we forget as officers of the court we are here to act in our client’s best interest. Our code of conduct recognises a number of fundamental principles namely to uphold the rule of law and the proper administration of justice and act with integrity.
The reader is referred to the Judgment for the key background facts. Essentially this was a complaint by clients that a solicitor had failed to update the client and ultimately failed to deal with a number of matters properly.
The ombudsman required the solicitor to respond to various correspondences between the parties without success. In January 2011, the Ombudsman issued a notice (requiring information and documents to be produced) under section 147 of the Legal Services Act 2007 ("the 2007 Act)" giving the solicitor 10 days to comply.
The notice required files and other documents relating to the clients case. The reader is referred again to the judgment for the key facts.
There was no response from the solicitor. The ombudsman considered the solicitor was in breach of his duties under the Solicitors Code of Conduct 2007 and under the 2007 Act.
The key principles were the issues in law, the courts approach and the emerging jurisdiction
An application was made by a CPR Part 8 claim form, lodged in the Administrative Court in April 2011. The court was told that the application by the ombudsman was the first of its kind to be pursued by them .It was supported by evidence which set out the issues in the case.
In essence the ombudsman alleged a default by the solicitor in complying with the notice and thus the court should under section 149 (4) the 2007 Act treat him as if he were in contempt of court.
The application came before the court in May 2010. The solicitor did not attend and was not represented. The court decided not to proceed in the absence of the solicitor but to issue a warrant, so that he would be brought before the court and given the opportunity to respond in person to the application.
In May the solicitor came before the court. He explained the background to his practice which again the reader is referred to in the judgment. The solicitor served evidence in response dealing with his conduct.
The solicitor offered a number of undertakings 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 section 147 notice and to take all reasonable steps to co-operate with and to assist the ombudsman in further investigating the clients complaint and any other complaint made about the solicitor. At that stage the court accepted the undertakings.
The matter came back before the court for it to consider all of the evidence.
Issues in law
Key to the ombudsman application was the powers and provisions under the 2007 Act. As noted the 2007 Act makes specific provision to enable an ombudsman to obtain documents or information in the course of his investigation of a complaint. The following are the key provisions:
1 Section 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.
(c) If a person who is required under this section 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
2 In default of production the ombudsman can report the matter to an authorised body (defined in the 2007 Act sec 148 (6)) which in the case is the Solicitors Regulation authority.
3 Provision for the enforcement to produce documents or provide information under section 147 is made in section 149 which provides
“(1) this section applies where an ombudsman is of the opinion that a person (‘the defaulter’) has failed to comply with a requirement imposed under section 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 sub-section (2), the court may enquire 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
4 Section 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 2 years in the case of committal by a superior court, or 1 month in the case of committal by an inferior court.”
Issues for the court
The court had to consider a number of issues upon this novel application:
Procedure. At the outset the court noted there was no procedure for an ombudsman to certify a defaulter’s failure to comply with a section 147 notice to invoke the discretionary powers conferred on the court by sub-sections 149(3) and (4) nor was this found in section 149, or in any other provision of the 2007 Act. The current court rules (CPR) did not prescribe the course to adopt. There was some guidance in the previous High Court Rules. (RSC Order 52, rule 4(1)) 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.
Counsel for the ombudsman submitted the issue of a Part 8 claim form in the Administrative Court was the most appropriate means of certifying to the court under section 149(2) and asking the court to enquire into a case under section 149(3). The court was invited to approve the Ombudsman’s decision to proceed in this way.
The court noted the Part 8 procedure was appropriate for proceedings under section 149. However it also noted there may be cases in which the parties cannot agree the facts on which the outcome of a section 149(4) process will turn.
The part 8 procedure was flexible and the court can order the claim to continue as a part 7 claim.
The reader is referred to the judgment on the issue of the appropriate court and venue.
The courts approach under the 2007 Act
The court was asked to consider the appropriate sanction for failure without reasonable excuse to comply with a requirement under section 147. The court applied the general principles for committal for contempt see for example the guidance on sentencing for contempt Hale v Tanner  1WLR 2377 and Lomas v Parle  EWCA Civ 1804.
In this case the court noted
1 As a general principle, which must apply to every case under section 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.
2 the use of the court’s powers under sub-section (3) to enquire into a case and of the power under sub-section (4) to deal with a defaulter as if he were a contemnor will generally involve both a punitive and a coercive purpose.
3 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 That does not diminish the role of the court in punishing the person guilty of such contempt if punishment is called for, see Lloyds TSB Commercial Finance Ltd v Melia and others  EWHC 1114 (QB).
4 the extent to which the power to commit as if for contempt under section 149(4) will serve a coercive purpose will always depend on the particular facts.
5 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.
6 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.
7 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 section 149.
After hearing the evidence, including mitigation, Mr Justice Lindblom was able to conclude that this was not a case in which imprisonment was called for, but that a financial penalty was justified. A fine of £5000 and costs.
This is a salutary lesson for all lawyers and one which clearly sends out a warning by the ombudsman. Engage with a regulator and ignore them at your peril. It is very telling that Mr Justice Lindblom noted the solicitor consciously persisted in his default for about two and a half months, apparently ignoring the Ombudsman’s process entirely.
There can be no excuse for such behaviour from officers of the court. The guiding principles to uphold the rule of law and the proper administration of justice and act with integrity must ring aloud in our professional lives. The stakes are higher than ever.