Behaving badly – clarity at last on negative conduct definitions?

Date published

21/08/2018

Services

Sectors

Locations

Dishonesty, want of integrity, professional misconduct and negligence: these concepts form a vexed spectrum of negative conduct characteristics from solicitors and other professionals. Elisabeth Ross looks at recent developments to help detangle these terms.

Over recent years, the frequently overlapping concepts of dishonesty and lack of integrity have been the subject of particular scrutiny from the judiciary. Often, this has resulted from regulators alleging dishonesty whilst advancing alternative cases of professional misconduct and/or want of integrity.

Judges have not always found it easy to clearly define what each of these concepts means. In March 2018, the Court of Appeal considered the joined appeals of Wingate and Evans v SRA; Malins v SRA [2018]. The court clarified the current legal test for dishonesty, lack of integrity and professional misconduct, and in doing so overturned a previous finding by the High Court in Malins v SRA [2017] that lack of integrity and dishonesty were synonymous.

Distinguishing between these concepts will have highly significant repercussions. Amongst other things, whether an act is considered dishonest will impact the following:

  • the severity of the sanction (a finding of dishonesty will almost invariably result in a solicitor being struck off, whereas a finding of lack of integrity may not)
  • the insurance position of the solicitor in question (the SRA’s minimum terms for professional indemnity insurance allow insurers to exclude liability for an individual who has been dishonest).

Further, any costs (eg defence costs) advanced by insurers may also have to be reimbursed. A finding of want of integrity or professional misconduct will not trigger such adverse consequences.

Dishonesty

The case law on dishonesty has been tangled, with judges in civil and criminal actions differing as to whether the test should include a subjective element.

In Ivey v Genting Casinos (UK) Ltd [2017], the Supreme Court held that ‘dishonesty is itself primarily a jury concept, characterised by recognition rather than by definition’. Accordingly, the test for dishonesty is an objective one, by reference to the standards of ordinary, decent people. There is no requirement that the defendant must appreciate that what he has done is, by those standards, dishonest. There can also be no logical basis for the meaning of dishonesty to differ according to whether it arises in a civil or criminal context.

In Wingate, Lord Justice Jackson reaffirmed that ‘as explained most recently in Ivey, the test for dishonesty is objective. Nevertheless, the defendant’s state of mind as well as their conduct are relevant to determining whether they have acted dishonestly.’

Want of integrity

Integrity was described in Wingate as a more nebulous concept, but the Court of Appeal re-affirmed the definition of integrity from Hoodless and Blackwell v FSA [2003] FSMT 007 as follows: ‘In our view, “integrity” connotes moral soundness, rectitude and steady adherence to an ethical code. A person lacks integrity if unable to appreciate the distinction between what is honest or dishonest by ordinary standards.’

Professional misconduct

Differing tests for misconduct may arise depending on the profession. For solicitors, the case law confirms that professional misconduct may involve inexcusable negligence and is ‘not confined to disgraceful or dishonourable conduct’ (per Justice Denning in Re A Solicitor [1972]). At the more serious end, per Aaron v Law Society [2003], ‘there is clearly a descending scale of culpability in non-deliberate deception from that amounting to professional misconduct to that which does not’.

In Wingate, Lord Justice Jackson noted that: ‘All professional people are human and will from time to time make slips which a court would characterise as negligent … but acts of manifest incompetence engaging the principles of professional conduct are of a different order.’

An area for reform?

The Court of Appeal in Wingate did not consider it necessary to reach a view on whether the case of BSB v Howd [2017] was properly decided.

In the Howd case, the High Court determined that the inappropriate conduct of a barrister towards six women at a Chambers party did not meet the threshold of lack of integrity nor for professional misconduct. Regarding integrity, the court noted that it ‘connotes probity and adherence to ethical standards, not inappropriate and offensive social or sexual behaviour’.

Whether the precedent established in Howd will be overturned remains to be seen. Nevertheless, in the wake of the recent spate of high-profile harassment cases involving law firms, the SRA has issued a warning reminding firms that any potential professional misconduct by a person or firm should be reported to the regulator, including sexual harassment or misconduct, and that non-disclosure agreements should not be used to prevent allegations of sexual harassment being reported to them.

This article was first published on the website of the Civil Litigation Section, the Law Society’s community for civil litigators and mediators.

Read other items in the Professions and Financial Lines Brief - September 2018