Dishonesty – legally speaking
Malins v SRA [07.03.18]
The much anticipated judgment of the Court of Appeal in the dishonesty case of Malins v SRA was handed down in March 2018.
The High Court previously held that the line between integrity and honesty was non-existent, a view which elicited confusion and questions among the legal community and beyond. The Court of Appeal decision has provided clarity by distinguishing the two terms.
In 2014 a solicitor, Mr Malins, discovered that he had failed to file and serve a notice which would allow his client to recover their ATE premium. Under the Legal Aid, Sentencing and Punishment of Offenders Act 2012, recoverability of ATE premiums was no longer allowed unless a Notice of Funding had been served on the opposition and filed at Court by 1 April 2013. Seemingly to try and make amends, Mr Malins created backdated documents which purported to show that he had filed the notice in time and sent them to the claimant’s solicitor.
The matter was referred to the Solicitors Disciplinary Tribunal (SDT) where Mr Malins was found guilty of lacking integrity for creating the backdated documents and of dishonesty for sending the documents to the claimant’s solicitor.
High Court decision
Mr Justice Mostyn overturned the SDT’s decision, controversially ruling that dishonesty and a lack of integrity should be treated as synonymous, and that it was “illogical” and “contradictory” for the two concepts to be treated as separate, and this flawed reasoning meant that the case should be re-examined.
The SRA appealed the judgment.
Court of Appeal decision
The Court of Appeal overturned Mostyn J’s decision. In particular, Jackson LJ held:
- Mostyn J erred in holding that integrity had the same meaning as honesty
- The SRA's case was not illogical or contradictory.
In distinguishing honesty and integrity, Jackson LJ cited the recent Supreme Court case of Ivey v Genting Casinos  which set down an objective test for dishonesty in respect of civil liability and effectively removed the subjective element of the test adopted from the criminal case of R v Ghosh .
Applying the Ivey test, it is first necessary to ascertain a defendant’s actual state of mind and/or their belief of the facts under which their actions were performed. Following this, an objective test is applied to assess whether the defendant’s actions were dishonest by the standards of ordinary, decent people.
With regard to integrity, Jackson LJ considered it is “a useful shorthand to express the higher standards which society expects from professional persons and which the professions expect from their own members”. At the same time, the duty of integrity “does not require professional people to be paragons of virtue”.
To that end, it follows that integrity is linked to how a person serves the public and the standards of their own profession.
In Malins, it was determined that Mr Malins’ creation of backdated documents showed a lack of integrity. Once the documents had been created, Mr Malins had multiple opportunities to think again and ask himself whether he really did want to send the backdated documents to the claimant’s solicitors, an action which was liable to mislead and amount to dishonesty. These were distinct displays demonstrating a lack of both integrity and dishonesty.
As expected, the Court of Appeal’s decision confirms that the concepts of dishonesty and lack of integrity are indeed separate. Jackson LJ refrained from defining either dishonesty or integrity, but rather distinguished them – dishonesty is an objective concept adjudged by everyday societal norms, whereas integrity is considered in accordance with and by reference to professional practice and standards.
It is clear that a person’s integrity is intrinsically linked to their professional codes of conduct, which is implicit in the higher standards society expects from professionals. In the context of solicitors’ regulation, as Jackson LJ submits:
“Integrity connotes adherence to the ethical standards of one's own profession. That involves more than mere honesty…Such a professional person is expected to be even more scrupulous about accuracy than a member of the general public in daily discourse.”
Although Malins relates to a solicitors tribunal case, the decision makes it clear that each profession’s specific rules (such as the FCA’s Conduct rules) are to be applied when looking at whether someone has acted with a lack of integrity.
From an insurance coverage perspective, the Court of Appeal’s judgment in Malins serves to clarify some of the uncertainty arising from the High Court’s decision and supplements this developing area of law, following on from the removal of the subjective aspect of the test for dishonesty in Ivey.
Read other items in the Professions and Financial Lines Brief - June 2018