ANALYSIS:Recent court judgments on the behaviour of solicitors would appear to send out conflicting messages, writes CAROL COULTER
LAST MONTH the Supreme Court upheld a High Court judgment refusing to strike off two solicitors who had engaged in large-scale tax evasion, resulting in 50 charges of professional misconduct before the Solicitors Disciplinary Tribunal, to which they pleaded guilty.
Earlier that month, two other solicitors were struck off, one for alleged forgery of a signature and 18 counts of misconduct including avoiding stamp duty, and the other, whom High Court President Mr Justice Richard Johnson heard was suffering from a mental condition and who had been disciplined eight times for misconduct.
The Supreme Court case began with a random investigation by the Law Society of the solicitors, Henry Colley and Colm Carroll, operating as Roger Greene Sons. It was carried out by Mary Devereux, a chartered accountant employed by the regulatory department of the Law Society. She discovered a host of irregularities in their accounts, including mixing personal and client accounts, operating undisclosed bank accounts and committing “wholly irregular practices” in relation to the legal requirements on solicitors’ bookkeeping.
All this was done, not with the intent of defrauding clients, but, as the Supreme Court judgment states, it was “a deliberate and elaborate scheme of tax evasion”.
The scale of this tax-evasion scheme is not detailed in the Supreme Court judgment, but it was very large indeed. One of the secret accounts was an Ulster Bank deposit account to which at least €32 million was lodged over three years.
Much of the money lodged to this account came from the taxpayer in the first place, as health boards represented a large proportion of the firm’s clients.
After they were suspended by the High Court for misconduct, the two solicitors sued the HSE for a further €3.2 million which they claimed represented underpayment for work done over a two-year period.
The Supreme Court describes how the Law Society was obstructed in its investigation of the affairs of the firm until eventually, following a number of applications to the High Court, they caved in and “effectively pleaded guilty, settled their affairs with the Revenue Commissioners and gave full, though somewhat slow, co-operation with Ms Devereux”.
They came before the Solicitors Disciplinary Tribunal charged with misconduct. This tribunal operates under the supervision of the High Court, and has a panel of 20 solicitors and 10 lay people. Each hearing is by two solicitors and a lay person, and on this occasion the solicitor members of the tribunal were Frank Daly, a former president of the Law Society, and Ian Scott, a partner in Arthur Cox and Co.
A range of penalties can be recommended by the tribunal to the president of the High Court, from fines combined with conditions on practising, to the ultimate sanction – being struck off the roll of solicitors.
The president of the High Court can either apply them or impose other sanctions.
Both solicitors were represented at the tribunal by counsel, who essentially pleaded mitigation, and urged the tribunal not to recommend that they be struck off. Instead, it recommended they each be suspended for 12 months; only be permitted to practise under the supervision of another solicitor for a further three years; and pay €50,000 to the Law Society Compensation Fund, along with its costs.
The Law Society was dissatisfied with the recommendation of the disciplinary tribunal, and brought a motion to the High Court seeking the striking off of the names of Carroll and Colley.
The president of the High Court normally presides over Solicitors’ Acts cases, but if unable to do so, can assign another High Court judge in his place. On this occasion the case was heard, not by the president, Mr Justice Johnson, but by Mr Justice McKechnie. He gave an ex tempore judgment in which, according to the Supreme Court, he referred to the solicitors’ “multiple and extremely serious” breaches of the regulations, their “deceit” towards the Law Society, and at least 50 “orchestrated, intentional and conscious acts of misconduct”.
However, he upheld the recommendation of the disciplinary tribunal and declined to strike them off. The factors he took into account included their ultimate full admissions of the allegations; their eventual co-operation with the investigation; their admission of their intent to evade tax and their eventual payment of all money owed to the Revenue Commissioners; the seniority and experience of the two solicitor members of the disciplinary tribunal; the fact that no client or barrister was out of pocket; and the fact that one of them was now retired, and they were unlikely to reoffend.
The Law Society, for the first time in its history, appealed a decision of the High Court on a matter regarding solicitors to the Supreme Court.
In its rejection of the appeal, the Supreme Court said: “The key question is whether as a matter of law it was open to the judge of the High Court to arrive at the decision made by him or her.”
It is not for the Supreme Court to substitute its view of the evidence for that of the judge who heard it, unless he or she made a mistake in law.
Ultimately, therefore, the issue was a matter of judgment for the High Court and, before that, the Solicitors Disciplinary Tribunal, and they both decided that the issue of large-scale, planned and carefully executed tax evasion, which is a criminal offence, does not merit striking solicitors off the roll of solicitors when the money owed has been reimbursed.
The question many young solicitors – and, indeed the public at large – must be asking is: what do you have to do to be struck off the roll of solicitors?
Carol Coulter is Legal Affairs Editor of The Irish Times