Solicitors Regulation Authority Limited v Daniel Whittingham
[2023] EWHC 2981 (Admin)
Solicitors Regulation Authority Limited v Hon-Ying Amie Tsang
17 May 2024
[2024] EWHC 1150 (KB)
High Court
The government agency that regulates solicitors lost a case against a solicitor. The judge said the agency was slow and its case was weak, so it had to pay the solicitor’s legal fees. The agency appealed, but the court sided with the solicitor.
Key Facts
- •The Solicitors Regulation Authority (SRA) brought misconduct proceedings against solicitor Hon Ying Amie Tsang.
- •The allegation was that Tsang failed to advise clients of high risks in fractional property development schemes.
- •The Solicitors Disciplinary Tribunal (Tribunal) dismissed the allegation and ordered the SRA to pay Tsang's costs (£74,950).
- •The SRA appealed only the costs order, not the dismissal of the allegation.
- •The appeal focused on the correct test for awarding costs against the SRA and whether the Tribunal's decision was justified.
- •The case involved a large number of clients (451) and significant sums of money (£27,748,916).
- •There was a significant delay (approximately 5 years) in the SRA's investigation and proceedings.
Legal Principles
In disciplinary proceedings against solicitors, the general rule that costs follow the event does not apply. A costs order against the SRA requires a good reason beyond the mere dismissal of the allegation.
Baxendale-Walker v Law Society [2007] EWCA Civ 233
When considering costs against a public body, a court must balance the financial prejudice to the successful respondent against the need to avoid chilling the public body's regulatory function.
Competition & Markets Authority v Flynn-Pharma [2022] UKSC 14
Procedural failings by the SRA, including inordinate delay, can constitute a good reason for awarding costs, even if the delay didn't increase the respondent's costs. A fundamental legal flaw in the allegation is also a good reason.
This judgment
Appeals against costs decisions are subject to a high degree of deference to the tribunal's expertise and judgment. The court will only interfere if there was an error of principle or the decision was outside the range of reasonably available decisions.
Assicurazioni Generali SpA v Arab Insurance Group [2002] EWCA Civ 1642 and General Medical Council v Bawa-Garba [2018] EWCA Civ 1879
Outcomes
The SRA's appeal against the costs order was dismissed.
The Tribunal correctly applied the legal test for awarding costs against the SRA. The Tribunal's finding of inordinate delay by the SRA and a fundamental legal flaw in the SRA's allegation constituted good reasons for the costs order. While there was an error in the Tribunal's assessment of harm to the Respondent's practice, this did not undermine the overall justification for the costs order.