NI: High Court: Judicial review refused for solicitor who challenged referral to Disciplinary Tribunal for financial irregularities
The High Court in Belfast has refused to grant leave in judicial review proceedings taken by a solicitor who was referred to the independent Solicitors’ Disciplinary Tribunal (SDT) for numerous breaches of the Solicitors Accounting Regulations 2014.
About this case:
Citation: NIQB 29
Judge:Mr Justice Adrian Colton
It was claimed by Mr Paul Kearney, of Kearney Law Group, that the referral decision was irrational and disproportionate, having regard to the surrounding circumstances in the case.
However, Mr Justice Adrian Colton determined that the Law Society of Northern Ireland was entitled to refer the matter to the Disciplinary Tribunal, due to the seriousness of the alleged conduct and the need to uphold professional standards in the legal profession.
Mr Kearney was the principal of the Kearney Law Group, a legal practice which was established in 2019. In September 2020, an accounts inspection by the Law Society identified numerous irregularities regarding the practice’s accounts. An inspection report was prepared and sent to the Law Society’s professional conduct committee (PCC).
The report outlined numerous breaches of the Solicitors Accounting Regulations 2014, the most serious of which was the transfer of £40,000 from the client account to the office account on 12 May 2020 in respect of a “bounce back loan”. This money was not deposited back to the client account before 19 May 2020.
In a letter to the PCC, Mr Kearney accepted the gravity of the situation and explained that incompetent bookkeepers and technical difficulties were the cause of the irregularities. He claimed to have immediately rectified the situation by contracting chartered accountants when it was notified to him.
In an initial decision, the PCC determined that the matter should be referred to the Disciplinary Tribunal. Mr Kearney subsequently submitted further material for the PCC’s consideration. This included a letter from the chartered accountants stating that all irregularities had been rectified and the accounts were in order.
Mr Kearney also submitted 11 points to the PCC, including inter alia that no client was owed any monies, that he had put further safeguards in place to ensure the offending did not happen again and that he immediately diverted all staff and financial resources to resolving the issue.
The PCC considered these further submissions and concluded that it was proper for the matter to be sent to the Disciplinary Tribunal. As such, Mr Kearney issued judicial review proceedings seeking to quash the decision on the basis that it was irrational and/or disproportionate. Mr Kearney’s challenge was grounded on guidelines published by the PCC and on his “belief and understanding” that other, more serious cases were not referred to the Tribunal.
Mr Justice Colton noted that there was some ambiguity in the case law regarding the appropriate test to apply. Specifically, it was not clear whether a test for proportionality or Wednesbury unreasonableness was applicable (British Civilian Internees v Secretary of State for Defence  EWCA Civ 473; Kennedy v Charity Commission  UKSC 20).
However, the court determined that, whichever test was applied, the PCC was entitled to conclude that the seriousness of the solicitor’s conduct was such to justify a referral to the Disciplinary Tribunal. The court noted that the PCC performed a vital public function in regulating the solicitor’s profession. Given that the role of the Law Society was to investigate potential breaches and refer appropriate cases to the Disciplinary Tribunal, the court had to give due deference to the PCC’s decision.
It could not be disputed that there was sufficient evidence to bring disciplinary proceedings, the court said. Therefore, the only issue in the case was whether “within the objectives of the Law Society such proceedings should be brought or some alternative action taken”.
The court held that the decision to refer the matter to the Disciplinary Tribunal was a preliminary decision which did not make a determination of Mr Kearney’s rights. He would have full opportunity to make any points he wished in his defence at the Tribunal hearing, the court said.
While the court accepted that some of the guideline factors published by the Law Society might have persuaded the PCC to come to a different conclusion, it was held that the PCC was entitled to consider one particular factor as sufficient to refer the matter to the Disciplinary Tribunal. In this case, that factor was the seriousness of the irregularities, which outweighed other factors such as the likelihood of repetition, the remedying of the breach and the risk to the public.
Mr Kearney also sought discovery of documents regarding comparable cases to assist in his assertion that more serious offending has not been referred to the Tribunal. It was noted that this application was “not really pursued” by counsel at the hearing, but the court rejected the application in any event. It was said that there was simply no evidential basis for such an application at the leave stage of the proceedings.
The court refused to grant leave to pursue the judicial review proceedings, stating that the decision of the PCC was not irrational, unreasonable or disproportionate. It was entirely lawful even if a different committee may have come to a different decision. The proceedings had no reasonable prospect of success.