COURT OF APPEAL CLARIFIES THE TEST FOR DISHONESTY IN PROFESSIONAL DISCIPLINARY PROCEEDINGS
21 March 2022
The Court of Appeal, in Law Society of Ireland .v. Kathleen Doocey, has recently clarified the constituent elements of dishonesty in the context of professional disciplinary proceedings. This judgment will be of particular interest to statutory regulators and practitioners in the area and it will aid regulators in establishing whether the conduct of a particular registrant can be regarded as dishonest.
Solicitors Disciplinary Tribunal and High Court
Kathleen Doocey (“the solicitor”) was a solicitor in practice in County Mayo. Following a Law Society investigation, the solicitor was the subject of a complaint to the Solicitors Disciplinary Tribunal (“Tribunal”). The solicitor made admissions to 24 allegations of professional misconduct relating to a deficit of €169,000 on her client account, financial irregularities, including engaging in irregular transactions known as teeming and lading, constituting a serious departure from the requirements of the Solicitors Accounts Regulations. The Tribunal recommended that the appropriate sanction to be applied was that the solicitor’s practising certificate would be subject to certain conditions. In accordance with its statutory obligation, the Law Society brought the Tribunal’s report to the High Court and, notwithstanding the recommendation of the Tribunal, the Society, per its statutory entitlement, sought an order striking the respondent’s name from the Roll of Solicitors.
The President of the High Court, Ms Justice Irvine, acceded to the Society’s application and made an order striking the solicitor’s name from the Roll of Solicitors. The President stated that the solicitor’s conduct was a complete abuse of the trust and confidence which clients are entitled to expect from their solicitor and the behaviour was at the uppermost end of the scale of seriousness. The High Court concluded that a strike off was necessary to discourage other solicitors from engaging in behaviour of this nature and to preserve public confidence in the profession.
Court of Appeal
The solicitor appealed the President’s decision to the Court of Appeal. In her appeal, the solicitor argued inter alia that there was no finding of dishonesty by the Tribunal, with the effect that the President erred in finding the solicitor guilty of dishonesty in her imposition of sanction. As there was no express reference to “dishonesty” in the admitted allegations, the Court of Appeal observed that the real issue was whether the admitted findings of misconduct amounted to dishonesty on her part. In considering this issue, the Court was obliged to consider the appropriate test for dishonesty in professional disciplinary proceedings.
The Court of Appeal carefully considered the case law on dishonesty and concluded that the appropriate test for dishonesty was objective in nature, in that the test for dishonesty was to be judged by the standards of ordinary reasonable persons and did not require proof that the solicitor knew or appreciated that their conduct was dishonest. In that regard, the Court relied on two previous decisions of the Court , wherein the Court held that dishonesty in criminal law is to be assessed on an objective basis. The court also noted the UK decisions in Ivey v Genting Casinos and Solicitors Regulatory Authority .v. Wingate in which it was held that the test for determining whether conduct was dishonest was to be judged by the standards of ordinary persons and that, once the court or tribunal is satisfied as to the individual’s knowledge or belief as to the facts, it is not necessary to prove that the individual knew that the conduct was dishonest.
Further, the Court of Appeal stated that dishonesty must not be judged on a standard that leaves it to the individual solicitor’s understanding of dishonesty. The Court held that the rationale of the disciplinary code would be shaken if the amoral solicitor, who simply does not advent to the possibility of dishonesty, can escape severe sanction for their otherwise deliberate actions which are objectively dishonest.
The court concluded that the appropriate test to assess whether behaviour is dishonest is an objective one i.e. whether the conduct is dishonest will be judged by the standards of ordinary reasonable persons. The court noted that there is a subjective element in that there is a requirement that there must be proof that the solicitor intended to do the proposed acts. Once this has been demonstrated, there is no requirement to prove that the solicitor had knowledge or belief that the conduct was dishonest.
On the facts of the appeal, the court rejected the submission of the solicitor in which she claimed that the admitted misconduct was not dishonest but was due to her chaotic and haphazard approach to bookkeeping and due to her inexperience and as a result of the pressure she was under due to a cyber-attack. The Court held that identifying dishonest conduct was not unduly difficult, that it is based on the shared values of the community and that certain language connotes dishonesty. The court noted the decision of inter alia McKechnie J. in Carroll .v. Law Society of Ireland where a complaint of unlawfully depriving a client of money and detaining it without just cause and providing false and misleading information involved elements of dishonesty, even though there was no express reference to same.
The Court noted this case involved deliberate and systematic actions carried out by the solicitor herself, including 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 conduct was not accidental and the Court was satisfied that she had actual knowledge of the factual situation. Considering all of the facts, the Court stated that there could be no other explanation other than that the behaviour of the solicitor amounted objectively to dishonesty.
The court dismissed the solicitor’s appeal and upheld the decision of the President to strike her name from the Roll of Solicitors.
The decision in this case brings clarity to the law on the understanding of dishonesty in professional disciplinary proceedings. In rejecting the solicitor’s arguments on dishonesty, the court confirmed that the test is an objective one i.e. the question of whether the act complained of is dishonest is to be judged by the standards of ordinary reasonable persons. There is a minor subjective element in the test in that it must be proved that the solicitor knew or intended to do the proposed acts. Once this is proved, it is not necessary to demonstrate that the solicitor knew that the conduct was dishonest.
The judgment in this case will offer some welcome clarity to statutory regulators, representative bodies and practitioners in the area in assessing whether the conduct of registrants meets the appropriate standard to be regarded as dishonest behaviour.
For further information please contact Stephen McLoughlin, Partner and Head of the Regulatory Group, James Meighan, Associate or another member of the Regulatory Group at Addleshaw Goddard in Ireland.