The Solicitors Regulation Authority is fighting a costs order imposed following a failed tribunal prosecution on the ground that cases brought before the Solicitors Disciplinary Tribunal are certified by the SDT.
The regulator was ordered by the SDT to pay costs of £74,950 after allegations against Hon-ying Amie Tsang were dismissed.
Appealing in the High Court, Louis Weston, for the SRA, said: ‘The real issue in this case is whether the SRA lost the protection of [Baxendale-Walker v The Law Society 2007].’ In Baxendale-Walker, the court found no assumption an order for costs in favour of a solicitor who has successfully defeated an allegation of professional misconduct will automatically follow, unless the complaint is ‘improperly brought’ or a ‘shambles from start to finish’.
‘The real question of this appeal is whether the SRA objectively did not have satisfactory reasons to bring the case it brought,’ Weston said. The SDT ‘should have turned to the liability question, [then] to the costs question and decided objectively if the SRA had reasonable grounds’ to bring the case against Tsang.
The court heard that allegations against a firm or individual do not reach the SDT until a certification process has been undertaken. The individual who examines the case is ‘out of the SRA, within the structure of the SDT, independent of the tribunal in the case’.
Weston added: ‘That decision is important because it demonstrates that someone external to the SRA had taken… an independent decision that there is a case to answer. Certification means there is an arguable case.’
For Tsang, Gregory Treverton-Jones KC said: ‘If ever a full costs order against a regulator was justified, it is this case. Six years of investigation by the SRA, we submit the case represented at the SDT by the SRA was legally flawed from top to bottom.
‘If the SRA thought otherwise, it would have appealed [the judgment], it has not. If this was brought as a test case, it would have appealed, it has not. The SDT’s rejection of its case was correct.’
He added: ‘You have heard a promotion of the certification process of the SDT as a complete answer to any claim that Baxendale protection was lost. The elevation of certification of the case to answer has been effectively a free-standing answer to any complaint about the case being improperly brought. That is simply not right. The reason there is this process of certification is to ensure hopeless cases do not come before the tribunal.
‘The SRA cannot complain that it has been ordered to pay Miss Tsang’s costs.’
Treverton-Jones added: ‘If the SDT is powerless to order costs, one wonders when a costs order could ever legitimately be made against the regulator.’
Mr Justice Eyre reserved judgment.
