UK: Integrity Restored

The Court of Appeal has given some much needed clarity on the meaning of "integrity" in the context of the SRA Code of Conduct 2011 in its judgment handed down on 7 March 2018 in Wingate and Evans v SRA and SRA v Malins (2018). This has removed the confusion as to whether the concepts of integrity and honesty were synonymous which had been introduced by earlier conflicting High Court decisions.

Background

The Judgment relates to two appeals heard together in the Court of Appeal arising out of disciplinary proceedings against solicitors.

Wingate and Evans v SRA involved two solicitors who had entered into a sham arrangement with litigation funders, pursuant to which their firm had received a loan of £900,000 which was stated to be used for funding specific cases only and to be repaid within 12 months but which, in reality, was used to pay the firm's debts and a substantial facility fee.

The Solicitors Disciplinary Tribunal ("SDT") had found that Mr Wingate and Mr Evans had been guilty of breaches of the SRA Accounts Rules but acquitted them of all other charges, including that of failing to act with integrity and of acting dishonestly. The dishonesty allegation was not pursued further but, on appeal from the SDT, Holman J found that one of the partners, Mr Wingate, had shown a lack of integrity by signing the sham agreement and drawing down moneys pursuant to it. The test was an objective one, unlike the test for dishonesty which (on the law as it was then) required a subjective element. Holman J concluded that it was clear on the case law that there was a distinction between dishonesty and a lack of integrity, with the latter having a broader meaning, but that it was neither necessary nor desirable to try to define integrity. The solicitors appealed.

In SRA v Malins, however, Mostyn J took a different view. Mr Malins had arranged ATE cover for his client in a construction litigation dispute but failed to serve the required notice to enable the client to recover the ATE premium from the defendant. On discovering his error, he created a backdated notice of funding and covering letter which were deployed in negotiations with the defendant's solicitors with a view to persuading them that the ATE premium was recoverable.

The SDT found that Mr Malins had acted without integrity in relation to the creation of the documents but that he had also acted dishonestly in deploying them in negotiations with the defendant's solicitors (no charge of dishonesty having been made against him in relation to their creation). In overturning that decision, Mr Mostyn J concluded that honesty and integrity were identical and had to be proved to the same standard. He directed a retrial by the SDT but on the deployment count alone. In this case the SRA appealed.

Subsequent High Court decisions had appeared to cast doubt on the correctness of Malins1, but the position remained uncertain. The distinction between the concepts of honesty and integrity was further blurred by the Supreme Court's decision in Ivey v Genting Casinos (UK) Ltd which did away with the subjective element of the test for dishonesty in criminal and regulatory proceedings, so that both dishonesty and lack of integrity are now to be determined by reference to objective standards.

The Court of Appeal Decision

As widely predicted, the Court of Appeal upheld the decision in Wingate and Evans and concluded that Malins was wrongly decided: honesty and integrity are not the same.

In his final judgment before retiring, Jackson LJ explained that honesty is a basic moral quality which is expected of all members of society. It involves being truthful about important matters and respecting the property rights of others. Integrity, on the other hand, is a broader concept and, although hard to define, is very much distinct and linked closely to the ethical standards expected of professional people:

"In professional codes of conduct, the term "integrity" is a useful shorthand to express the higher standards which society expects from professional persons and which the professions expect from their own members... the underlying rationale is that the professions have a privileged and trusted role in society. In return they are expected to live up to their own professional standards".

Jackson LJ cautioned that neither the courts nor professional tribunals must set unrealistically high standards; the duty of integrity does not require professionals to be paragons of virtue. However, in connecting integrity with the manner in which a particular profession professes to serve the public, he emphasised that in each case it is a concept which the relevant professional disciplinary tribunal, with its specialist knowledge of the profession concerned and its particular ethical standards, is best placed to identify. The tribunal's decisions must, therefore, be respected unless it has erred in law.

Applying that test to the solicitors' profession, the Court of Appeal found that both Mr Wingate and Mr Malins had acted without integrity. As a solicitor, Mr Wingate should have appreciated the importance of a written contract and was not entitled to excuse himself on the basis of an assurance from someone he believed to be respectable that the contract did not matter. He had failed to act in accordance with the ethical standards of the solicitors' profession. Likewise, Mr Malins had acted without integrity both in creating and in deploying the backdated documents.

Comment

This decision of the Court of Appeal reaffirms that the concepts of honesty and integrity are separate and distinct. Integrity is broader than honesty and is a concept which requires adherence to the ethical code appropriate to the profession in question and how it serves the public. The relevant tribunal, with specialist knowledge of its profession, is best placed to decide what integrity involves and whether that standard has been met.

Had the Court of Appeal followed the decision of Mostyn J in Malins, this would have created great difficulty for the SRA and other professional regulators which commonly frame charges on the basis of a lack of integrity in serious cases of unethical conduct which may fall short of dishonesty.

Jackson LJ acknowledged that an all-purpose formulation of integrity was not possible. Equally he disliked the "you can always recognise it when you see it" approach so he cited favourably several examples where lack of integrity had been found in previous cases:

  • entering a sham partnership to allow another solicitor to flout the rules on practice as a sole principal;
  • misleading the court by allowing a witness statement to be served recklessly as to its factual accuracy;
  • engaging in aggressive and risky SDLT avoidance schemes;
  • involvement in conveyancing transactions bearing the hallmarks of fraud;
  • false representations to a mortgage lender.

That list can be supplemented with examples from recent SDT decisions:

  • forging a client's signature on documents;
  • falsely certifying that a client's signatures had been witnessed;
  • involvement in dubious investment schemes;
  • failing to question payments through client account/allowing it to be used as a banking facility;
  • making misleading statements on professional indemnity renewals.

In marked distinction to the Bar Standards Board (which recently held that inappropriate or offensive social behaviour could not amount to a lack of integrity under its code) there is no doubt that the SDT is willing to find want of integrity based on misconduct any time and anywhere, and whether it takes place professionally or in a social context. This is clear from findings of lack of integrity made by the SDT in cases involving antisemetic posts on social media, inappropriate conduct at Christmas parties and criminal convictions for various offences unconnected to professional practice.

There is, therefore, no prospect of the relaxation of the test for dishonesty in Ivey –v- Genting leading to a reduction in the SRA's appetite for bringing forward cases based on lack of integrity or in the SDT upholding those charges in an almost limitless range of circumstances. The SDT expects high standards of solicitors and the SRA will press charges where it believes that ethical boundaries have been breached within professional practice or in the context of serious falls from grace in outside business interests or private life. Solicitors who do not wish to test those boundaries should remain scrupulous, in word and deed, at all times.

Footnotes

1 Williams v SRA [2017] EWHC 1478 (Admin)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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