The Respondent appealed to the High Court (Administrative Court) against the Tribunal s decision dated 20 March 2017 in respect of costs. The appeal was heard by Mr Darryl Allen QC (sitting as a Deputy High Court Judge) on 17 October 2017. The appeal was dismissed with costs payable by the Respondent to the Applicant. Shah v Solicitors Regulation Authority 17 October 2017 (Unreported) SOLICITORS DISCIPLINARY TRIBUNAL IN THE MATTER OF THE SOLICITORS ACT 1974 Case No. 11450-2015 BETWEEN: SOLICITORS REGULATION AUTHORITY Applicant and ANUP SHAH Respondent Before: Mr. P.S.L. Housego (in the chair) Mrs C Evans Mr D E Marlow Date of Hearing: 6 March 2017 Appearances Edward Levey, barrister of Fountain Court Chambers, Temple, London EC4Y 9DH instructed by Robin Havard, solicitor of Blake Morgan LLP of Blake Morgan LLP, One Central Square,Cardiff,CF10 1FS, for the Applicant Charlotte Hadfield, barrister of 3PB Barristers, 3 Paper Buildings, Temple, London EC4Y 7EU instructed directly by the Respondent. JUDGMENT
2 Allegations 1. The Allegations against the Respondent were as follows: 1.1 The Respondent directly discriminated against an individual on the grounds of religion and/or age and perpetrated unlawful acts of harassment and victimisation in breach of Rule 6.01 of the Solicitors Code of Conduct 2007 ( SCC 2007 ) by: (i) (ii) Sending or causing to be sent email correspondence to the said individual dated 23 December 2009, 11 March 2010 and 30 September 2010 which was discriminatory and/or which amounted to unlawful harassment on the grounds of age and/or religion; Authorising a request to be made of the individual on 19 November 2010 that he must repay the sum of 5,615.00 in respect of previous practising certificate fees which amounted to an act of age victimisation. 1.2 In committing unlawful acts of discrimination, harassment and victimisation the Respondent behaved in a way that was likely to diminish the trust the public places in him and/or the legal profession contrary to Rule 1.06 of the SCC 2007. Documents 2. The Tribunal considered all the documents in the case including; Applicant Application and Rule 5 Statement with exhibit MRH/1 dated 24 November 2015 Schedule of Costs Respondent Respondent s application for strike-out and response to the Rule 5 Statement dated 5 April 2016 Witness Statements of Respondent dated 8 September 2016 and 20 February 2017 Witness Statements of character witnesses (various dates) Respondent s submissions and accompanying documents in respect of costs dated 3 March 2017 Preliminary Matters 3. The Rule 5 Statement contained a total of five Allegations, three of which had been withdrawn at the hearing on 10 November 2016 (Allegations 1.3, 1.4 and 1.5). At that hearing the Respondent had admitted Allegations 1.1 and 1.2 in full.
3 Factual Background 4. The Respondent was born in January 1963 and admitted to the Roll on 15 October 1986. At all material times, the Respondent was a Member and Senior Partner of CVS LLP (the Firm ). At the time of the hearing he remained on the Roll and held an unconditional Practising Certificate. 5. The Allegations concerned the outcome of proceedings before the London Central Employment Tribunal ( the Employment Tribunal ) brought by NVDB against the Firm and the Respondent. The Employment Tribunal found in favour of the NVDB in relation to four acts of discrimination, harassment and victimisation. The Respondent and the Firm were ordered to pay compensation to NVDB for injury to feelings in the sum of 18,509.00 on a joint and several basis. NVDB had been an equity partner in the Firm and had retired in May 2006. Upon his retirement it had been agreed that he would remain in practice at Firm as a consultant for five years. 6. The relationship between NVDB and the Respondent deteriorated over various issues including the agreement that had given rise to the consultancy arrangements. Following the departure of another two partners in November 2008, the Respondent gained control of the Firm. At a meeting on 23 December 2008 NVDB told the Respondent that he intended to reduce his private client work. On 19 January 2009 he presented proposals for his (NVDB s) retirement. 7. On 28 January 2009 the Respondent told NVDB that he would not agree to the termination of the agreement. NVDB therefore informed the Respondent that he would reduce his hours. 8. In December 2009 NVDB, in a meeting with the Firm s Director of Finance, sought once again to leave the Firm. He sent an email on 22 December 2009 confirming that he would not be coming into the office as regularly has he had been. NVDB also sent a Christmas card to a secretary at the Firm in which he wrote CVS is disintegrating! [M] has been made redundant! Dreadful. 9. The Respondent sent an email to NVDB on 23 December 2009 in which he responded to the various issues that had been raised. The email contained the following comments: Why all this hatred? Maybe you need to seek help. I thought Catholic Christians would know better than to spread such hatredness especially during Christmas! 10. He concluded by instructing NVDB to complete all existing client matters. This email was copied to the Director of Finance and another partner at the Firm as well as another former partner who was also now a consultant. The Respondent had accepted before the Employment Tribunal that this email could be seen as humiliating.
4 11. A request was subsequently made of NVDB to provide a witness statement on behalf of the Firm in redundancy proceedings brought by M. NVDB declined to do so. On 11 March the Respondent replied to NVDB and he concluded his email by stating You are a very bitter old man. 12. The situation continued to deteriorate and a letter before action dated 6 August 2010 was sent to NVDB alleging that he was in breach of the agreement. In his reply he stated: since early 2010 you have victimised me in an attempt to belittle me and humiliate me in the eyes of other personnel by (for example) removing my VPN line [a reference to remote access], instructing reception staff not to patch calls through to me when I am not in the office, and having me work in the server room, two floors away from all the other personnel in the [Firm]. You have further victimised me by attempting to stop me attending to CVS work at home. 13. The Respondent replied by email dated 30 September 2010. In his evidence to the Employment Tribunal, the Respondent accepted that some of his comments within this email were offensive. The comments included the following: it will be ok for me to go around saying that you are a fraud or that you are a bitter old man who has lost his marbles or that you are out to destroy the [Firm] or that you are probably going senile as long as it has no financial impact on you? You call yourself a Christian and instead of spreading goodwill during Christmas, you write comments which were clearly designed to spread bad will and damage morale in the [Firm]. I guess you don t have the brains to think things through. You just look at things from your own selfish perspective. The fact of the matter is that you were long past your sell by date and we should have got rid of you years ago. The only reason I kept you on was loyalty but I should have realised you were just a parasite. 14. In his evidence the Respondent had stated that he was in effect calling NVDB a hypocrite because he acted in a way that was inconsistent with his religious beliefs. 15. On 13 October 2010 the Firm wrote to NVDB and the other former partner requesting a payment of 438.00 from each of them representing the fee payable for the renewal of their practising certificates. It was pointed out that the consultancy agreements did not require the Respondent to make these payments and that previous payments had been made in error. On 19 November 2010 the Firm asked NVDB to repay the sum of 5,615.00 in respect of previous practising certificates. These were eventually deducted from NVDB s consultancy fees. No such request was ever made of the other former partner.
5 16. The Employment Tribunal made the following findings: 16.1 In the September 2010 email the Firm directly discriminated against NVDB on grounds of age and religion. 16.2 Alternatively the September 2010 email was unlawful harassment by the Firm of NVDB on grounds of religion and age. 16.3 The December 2009 email was unlawful harassment by the Firm of NVDB on grounds of religion. 16.4 The March 2010 email was unlawful harassment of NVDB by the Firm on grounds of age. 16.5 The November 2010 email requesting that NVDB repay the sum of 5,615 was age victimisation of NVDB. 17. The Respondent was held to be jointly and severally liable with the Firm. Witnesses 18. None Findings of Fact and Law 19. The Applicant was required to prove the Allegations beyond reasonable doubt. The Tribunal had due regard to the Respondent s rights to a fair trial and to respect for their private and family life under Articles 6 and 8 of the European Convention for the Protection of Human Rights and Fundamental Freedoms. 20. Allegation 1 - The Allegations against the Respondent were as follows: 1.1 The Respondent directly discriminated against an individual on the grounds of religion and/or age and perpetrated unlawful acts of harassment and victimisation in breach of Rule 6.01 of the Solicitors Code of Conduct 2007 ( SCC 2007 ) by: (iii) Sending or causing to be sent email correspondence to the said individual dated 23 December 2009, 11 March 2010 and 30 September 2010 which was discriminatory and/or which amounted to unlawful harassment on the grounds of age and/or religion; (iv) Authorising a request to be made of the individual on 19 November 2010 that he must repay the sum of 5,615.00 in respect of previous practising certificate fees which amounted to an act of age victimisation.
6 1.2 In committing unlawful acts of discrimination, harassment and victimisation the Respondent behaved in a way that was likely to diminish the trust the public places in him and/or the legal profession contrary to Rule 1.06 of the SCC 2007. 20.1 The Tribunal carefully considered the evidence and submissions including the Witness Statements of the Respondent and the Judgment of the Employment Tribunal. The Tribunal noted that Allegation 1.1 made reference to discrimination on the grounds of religion and/or age and sought clarification as to the basis of the admission. The Respondent confirmed that he admitted discrimination on the grounds of both religion and age. 20.2 The Tribunal was satisfied that the admissions to Allegations 1.1 and 1.2 were properly made. On the basis of the evidence and the admissions, the Tribunal found both Allegations proved in full beyond reasonable doubt. Previous Disciplinary Matters 21. None. Mitigation 22. The Respondent had set out the background to his working relationship with NVDB in his Witness Statements. They had got on very well until 2002, when the nature of the Firm started to change due to the Respondent introducing lucrative commercial property work. In 2008 the recession had caused great uncertainty amongst everyone at the Firm. The Respondent acknowledged that NVDB helped broker an arrangement with the departing partners in late 2008 and that without his assistance the Firm may have had to close. Therefore when soon thereafter NVDB announced his own intention to leave, this had come as a shock to the Respondent. 23. It was submitted that the email of 23 December 2009 was mitigated by an element of provocation on the part of NVDB and that it reflected an unusual example of discrimination, namely suggesting that he was a hypocrite for writing such a message in a Christmas card. While not denigrating the seriousness, it was submitted that this was at the lower end of the scale. 24. The references to NVDB being a bitter old man were plainly discriminatory but were not motivated by discriminatory feelings. The Respondent did not believe that people were less deserving of respect due to age or religion. The exchanges were between two men who had known each other for 30 years and was different to a situation where a Managing Partner had used such language to a fee-earner. The Respondent would never have made those comments to a subordinate. 25. The language had been intemperate and had crossed the line. There was bad feeling on both sides, although the Respondent fully accepted that NVDB had not strayed into that area himself. The Respondent presided over a very diverse Firm and had no previous matters against him in 30 years of practice. The Tribunal were referred to the character evidence submitted by the Respondent. It was submitted that this conduct, which took place many years ago, was exceptional and it had not been, nor would it
7 Sanction be, repeated. The Respondent apologised unreservedly and it was submitted that this apology was genuine. 26. The Tribunal referred to its Guidance Note on Sanctions December 2016 when considering sanction. The Tribunal assessed the seriousness of the misconduct with reference to the Respondent s culpability, the harm caused and any aggravating or mitigating factors. 27. The Respondent s motivation had been anger. He had not intended to discriminate or victimise NVDB, although this had been the outcome. The misconduct had arisen from a dispute between two people who had been friends but whose relationship had become rancorous. The intemperate language had, in the case of the Respondent, just crossed the line into discrimination. It was neither planned nor spontaneous but it was reactive to the situation in which he found himself. The Respondent had direct control of, and responsibility for, the circumstances as he was the author of the relevant emails. He was an experienced solicitor operating at partner and management level, however the Tribunal also noted that NVDB was similarly experienced and this was not a case of the Respondent sending such emails to a subordinate. The Tribunal concluded that the Respondent s culpability was low. 28. The harm caused to NVDB had been assessed by the Employment Tribunal who had awarded 18,509 by way of compensation. 29. In assessing harm to the profession, the Tribunal observed that there was always harm caused when a solicitor was found to have committed unlawful acts of discrimination, harassment and victimisation. There would usually be great harm to the profession but in the particular circumstances of the context of the relationship between the Respondent and NVDB, the harm was limited. 30. The misconduct was aggravated by the fact that it was repeated and took place over a period of time, albeit in the context of one dispute. The misconduct was mitigated by the insight demonstrated by the Respondent in his Witness Statement of 20 February 2017. The Tribunal accepted that his apology was genuine. He had no previous matters before the Tribunal. 31. The Tribunal found the finding of discriminatory acts and victimisation were too serious to be dealt with by way No Order. The potential for harm to the reputation of the profession by such conduct was not negligible and there clearly had been identifiable harm caused to NVDB as recognised by the Employment Tribunal. In those circumstances a Reprimand could not be justified. 32. The Tribunal found that the seriousness of the misconduct was sufficiently serious as to justify a financial penalty. The Tribunal considered the level of the Fine. The Tribunal took into account the low level of culpability and the limited degree of harm referred to above and the character references contained within the papers. The Tribunal found that that the misconduct fell at the upper end of Level 1 in the indicative fine bands. The appropriate and proportionate sanction was a Fine in the sum of 2,000.
8 Costs Applicant s Submissions 33. The Applicant applied for costs in the sum of 32,121.98, as set out in the schedule. The Applicant submitted that costs should follow the event and the Tribunal had found two serious Allegations of misconduct proved. The Allegations that were admitted in November 2016 had been hotly contested to the extent that the Respondent had applied to have them struck out in their entirety. In those circumstances the SRA could not have dealt with the matter internally. The work involved in preparing the case had not been significantly increased by the existence of the Allegations that had subsequently been withdrawn. They had related to discrete aspects of the case and the substantive Allegations were those that the Respondent had admitted in November 2016. If there was to be any reduction on the basis that the three Allegations had not been pursued, it should be very small. 34. The parties had jointly invited the Tribunal to deal with sanction at the hearing in November 2016 but that Division had not felt able to deal with it then. This had led to a further increase in costs. Respondent s Submissions 35. The Respondent invited the Tribunal to make no order for costs. The written submissions set out the Respondent s position in detail with regards to difficulties arising at the start of proceedings relating to service of the documents. It was submitted that the Applicant s solicitors had made a number of errors which typified the Applicant s overall conduct of the proceedings, which was said to be regrettable and had resulted in un-necessary costs being incurred. 36. The Respondent had given the clearest possible indication at the investigation stage that he would accept the Allegations that he had now admitted. The additional Allegations should never have been brought. They had not been raised during the investigation stage and he had not therefore had an opportunity to address them before the referral to the Tribunal. The Respondent could not, in those circumstances, be blamed for taking the course he did in defending the Allegations. It was conceded that although the Respondent had accepted the findings of the Employment Tribunal, he had denied, in his letter to the SRA of 22 May 2015, that they amounted to a breach of Rule 1.06 of SCC 2007. 37. In addition to the matters specifically addressed above, the costs claimed in the schedule were high and the Tribunal was invited to reduce them accordingly. 38. The Applicant, in response, strongly denied any wrongdoing on the part of the Applicant s solicitors and submitted that it was the Respondent who had been uncooperative and it was this that had led to the difficulties concerning service. The Respondent had denied the Allegations and had invited the SRA to take no further action at the investigation stage. It had always been open to him to admit Allegations 1.1 and 1.2 and deny 1.3-1.5 but he had not done so.
9 Tribunal s Decision 39. The Employment Tribunal had spent 8 days exploring this matter before arriving at its conclusions, and had distilled its findings into a lengthy judgment. The Respondent had never disputed the factual findings of the Employment Tribunal, and that was relevant to the Tribunal s decision as to costs. 40. The starting point was that the Tribunal awards costs to the Applicant where a Respondent admits allegations or allegations are found proved. 41. In this case, the SRA investigated and framed additional Allegations, including dishonesty, instead of using the Employment Tribunal s decision as the factual matrix upon which to frame its Allegations. 42. In addition, the first that the Respondent knew of the allegation of dishonesty, and the basis on which it was put, was when he received the Rule 5 statement so that he had no opportunity to make submissions on the allegation of the dishonesty before the Allegations were laid. 43. Framing allegations on the basis of the Employment Tribunal judgment would have been likely to have led to a hearing largely limited to submissions upon those allegations. 44. This led to this matter being fought to a level of intensity far above that which would have been the case if the matter had been restricted to submissions based on facts which were never in dispute. This in large measure caused the increase in costs. The Applicant then dropped that Allegation, faced with an application to strike out. 45. This had greatly increased the costs of both sides. The cost of Applicant s representation at the hearings had been 9,486 including VAT, in addition to the costs incurred elsewhere. This was greatly excessive. The SRA has in-house advocates who present cases at much more modest expense where there is no dispute of fact. 46. The Tribunal also considered proportionality, and it noted the fact that the profession pays the cost if the Respondent does not. However the Tribunal should award costs only if it is fair for a Respondent to pay those costs. 47. The Tribunal accepted that the Applicant had correctly pointed out that there was no admission by the Respondent that the Employment Tribunal findings of fact diminished the trust of the public in the profession, or to the Allegation that so stated, which might have reduced costs. 48. When considering proportionality the Tribunal noted that the level of sanction was that which the SRA could have imposed, when the cost to the Respondent would have been some 600, and that the Respondent had always admitted the factual basis on which the Allegations were made. 49. The difficulties of service seem to have been a misunderstanding and did not impact greatly on the Tribunal s decision on costs.
10 50. Both sides had invited the SDT summarily to assess costs. This was not an exact science. The Tribunal did its best to do justice to the Respondent and to the profession and assessed the costs at 16,000. 51. The Respondent had made no submissions concerning his ability to pay costs and the Tribunal therefore ordered that he pay the Applicant s costs in that sum in the usual way. Statement of Full Order 52. The Tribunal Ordered that the Respondent, ANUP SHAH, solicitor, do pay a fine of 2,000.00, such penalty to be forfeit to Her Majesty the Queen, and it further Ordered that he do pay the costs of and incidental to this application and enquiry fixed in the sum of 16,000.00. Dated this 20 th day of March 2017 On behalf of the Tribunal P.S.L. Housego Chairman