The SRA & SDT: What’s the cost of a mismatch, and who should pay?

More credible with cap on or off?

There’s been so many surprising (election) and horrific events of late it’s not wrong that some very significant events for the legal profession may have escaped our full attention.

In the midst of the post-election drama, we learned that following a 7-week long SDT hearing, 19 misconduct charges brought against three individuals at Leigh Day were dismissed. The SRA’s costs incurred in this failed action are alleged to be millions. Leigh Day’s own costs were reported in the Gazette to be £7 million. It is not known yet whether solicitors and law firms will be picking up the bill, as this is subject to a separate determination on costs.

The regulatory theme for the SRA Conference in London this morning is “Trust and the market: Building Confidence”, and there are many great discussions on how the SRA is building trust in the legal profession, how they are reducing rules and the fixation with technical compliance, etc.

But the Law Society have crashed the self-praise by tweeting the pertinent question; “discussion on public trust in regulators-in light of recent events do the public notice until something goes wrong?”

I.e. the public judge our regulator by results that gain wide coverage in the national media. And the result of what could be the legal professions most expensive disciplinary hearing ever is not just the cost; it’s affected both public and professional confidence in our regulator.  So what and who is to blame for this outcome?

What happens when different standards of proof are applied?

The failure on all counts by the SRA to prove misconduct may be down to the lower civil standard of proof (on the balance of probabilities) applied by the SRA when deciding to bring an action. What’s the problem with this? When making its decision, the SDT applies a higher criminal standard of proof – beyond reasonable doubt.

The prosecutor applies a different standard of proof to the decision maker – so who needs to change?

To lawyers this seems illogical. Would we ever advise a client to pursue legal action on the back of a merits assessment which uses a lower standard of proof to the decision maker? Not ever. In fact if we did this, we would be negligent and liable for our client’s losses and costs in the action.

The SRA: We’re right

Illogical it may be, but apparently it’s right. The civil standard is applied at disciplinary hearings across most professions other than veterinary surgeons and the Bar.

SRA Chief Executive Paul Philip says the onus is on the SDT to change the standard of proof which it applies, not visa versa:

It is clearly wrong that the SDT applies a different standard to that of the SRA. This is a civil jurisdiction and the civil standard should apply. We will continue to push for this change to be made.

The SRA’s view is supported by the judiciary. In SRA v SDT (Queens Bench Division), 8 and 9 November 2016  Mr Justice Leggatt (at para 49) supported the SRA’s use of the balance of probabilities in assessing the standard of proof, and expressed dissatisfaction (obiter dicta) with the line of High Court authorities relied upon by the SDT to apply the criminal standard:

the present situation in which the Tribunal, when acting as a primary fact-finder applies a different standard of proof from that which the SRA applies when carrying out that role is unsatisfactory and illogical.  I also see considerable force in the point that the climate and approach to professional regulation and discipline have changed”

So who’s paying?
Who should pay for costs of failed litigation if it’s caused by a difference in assessing proof?

Using a lower standard of proof to the decision maker does result in one very difficult issue; who should pay for the costs of a failed action which is brought on the basis of a lower standard of proof to that applied by the decision maker? And why should they pay?

Should the profession be content to ultimately bear the costs of failed actions because in principle the SRA are right, regardless of the SDT’s own legally correct assessment? If so, what’s the outcome and net benefit to the profession and the public? This bottom line issue isn’t addressed by Justice Leggatt in his obiter dicta comments.

What about the Defendant?

Is applying a lower standard of proof to the decision-maker fair and reasonable on the defendants, bearing in mind the enormous effect upon their time, costs, and the personal and business upheaval? They would most likely say its not. Any prosecution should be pursued following a merits assessment that reflects that of the decision maker. What is the point of pursuing the action if no outcome or action will be obtained?

Does using the criminal standard of proof not protect the public?
Why does the criminal standard not protect the public?

The SRA put this as follows:

The use of the criminal standard for professional conduct hearings is disproportionate,and risks putting the interests of individual members of the profession ahead of the interests of the public, with the risk of associated poor consumer outcomes and a loss of confidence in the profession”

Most professional disciplinary bodies may use the civil standard, but does the criminal standard fail to protect the public and erode confidence in solicitors?

By the same logic, the criminal standard of proof isn’t sufficient to protect the public from criminals, who may often present a far greater risk to the public from re-offending.

Principle first, costs second?

The SRA accept that change is not imminent:

We cannot require the SDT to move to a civil standard of proof, as it would require legislative change or a change to the SDT’s policy or rules

In the interests of avoiding hearings which have no disciplinary outcome, it’s logical that the SRA should use a merits assessment which reflects that of the decision maker. This ensures actions are more likely to result in a disciplinary outcome, and it bolsters both the public and profession’s confidence in the effectiveness of the SRA.

If anyone disagrees with me I’d like to know; what is the point of pursuing a disciplinary action which doesn’t meet the SDT’s standard of proof? What outcome is gained, in whose interests is it, and why are the costs incurred justified?

Please use the comments box below to share your views.

Judge picture attribution: By photo taken by flickr user maveric2003 (flickr) [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

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Martyn

Ben

I set up Law Practice Manager because I enjoy sharing fresh and original opinions and posts on law management issues.
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