Challenging judicial criticism

At what point should
the court impute fraudulent actions
on the part of a client to their solicitor? What rights does a solicitor have if the court makes findings against them in a case to which they have not been made party?

In MRH Solicitors Ltd v County Court sitting at Manchester [2015] EWHC 1795 (Admin), the claimant solicitors challenged by way of judicial review express findings of fraud made against them in the course of a judgment by Mr Recorder Osborne.

‘Elbows deep’

The facts of the case were somewhat unusual in that the solicitors were not a party to the underlying claim, a personal injury claim which was alleged to be fraudulent by the defendant. It was repeatedly made clear that the defendant did not allege that the solicitors were complicit in the fraud, yet the recorder gave an ex tempore judgment suggesting that the solicitors were ‘elbows deep in a fraudulent claim’ and the ‘utterly unarguable schedule’ denoted ‘more than incompetence but actual dishonesty’.

The court decided the
findings were unfair to the solicitors, who had not been afforded any opportunity to defend themselves, particularly in light of the express disclaimer on the part of the defendant that the solicitors’ complicity was not alleged.

The disclaimer assisted MRH’s case on fairness as it could not be said they had been aware of the potential criticism and they could not have been expected to appreciate a need to respond.

What might have happened if those representing the defendant had not issued such a disclaimer, or if it had otherwise been clear that there was some suggestion of complicity, is
far less clear. The court was
of the view that, in those circumstances, the solicitors would have to consider if they could continue to act and whether they should seek to be joined as a party.

There are two sides to every story. In the words of Mr Justice Megarry from John v Rees [1970] Ch 345, 402, quoted in MRH: ‘The path of the law is strewn with examples of open and shut cases which, somehow, were not; of unanswerable charges which, in the event, were answered; of inexplicable conduct, which was fully explained…’

It clearly offends against the principal of natural justice for the court to make findings against a person who has been afforded no opportunity whatsoever to defend themselves. Had the court left the position there, there would be little remarkable about this particular case. However, the court was mindful to consider the correct approach for solicitors facing such adverse findings.

Correct approach

The court considered the options open to the solicitors and concluded that the most appropriate course of action it could conceive was for solicitors (or indeed any third party aggrieved by findings in a judgment to which it was not a party) to apply to be joined to the proceedings for the purposes of asking the judge to revise the offending findings. Should the judge refuse, the affected party would then have a potentially appealable decision and would not have to rely on the limited availability of judicial review – which is not available as against decisions of the High Court.

Careful to avoid setting
any hard and fast rules, the
court emphasised that the circumstances in which such a procedure might be used would be fact dependent and likely very rare. The court was clearly reluctant to be prescriptive as to remedies in what is, after all, a matter of natural justice, but solicitors involved in litigation should read and consider the judgment and take stock of the process suggested. The court made it very clear that its judgement was not a carte blanche for third parties criticised in a judgment to take action. The jurisdiction is clearly intended to be extraordinary.

It may be that solicitors who are the subject of adverse findings elect not to apply to be joined to proceedings for any number of reasons. Certainly indemnity insurers are likely to have quite a bit to say if solicitors end up joined to proceedings on their own application.

Solicitors accused of dishonesty by a court, whether by way of a definitive finding or in more oblique terms, are likely to be investigated by the Solicitors Regulation Authority. The possible repercussions of allowing judicial criticism to stand unchallenged are far reaching and potentially
career ending. SJ

Susanna Heley is a solicitor at RadcliffesLeBrasseur

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