Guidance on the application of sanction for Unsatisfactory Professional Conduct

The Legal Profession and Legal Aid (Scotland) Act 2007 (hereinafter "the 2007 Act") promulgated the concept of unsatisfactory professional conduct (UPC). It defined UPC, insofar as applicable to solicitors, as "conduct which is not of the standard which could reasonably be expected of a competent and reputable solicitor [...] but which does not amount to professional misconduct and which does not comprise merely inadequate professional services".

Complaints which are referred to the Law Society for investigation by the Scottish Legal Complaints Commission (SLCC) in terms of Sections 6 and 15 of the 2007 Act, or by the Scottish Solicitors' Discipline Tribunal (SSDT) in terms of Section 42ZA(2) of the Solicitors (Scotland) Act 1980 (hereinafter "the 1980 Act"), require to be investigated by the Society. To comply with the statute, the Society compiles a written Report of the relevant evidence and facts found, and makes a recommendation for disposal by the Professional Conduct Sub-committee, to which the authority to determine complaints of UPC is delegated.

The Professional Conduct Sub Committee has the power to make a range of decisions:

1. to take no further action in relation to a complaint;
2. to make a finding of UPC;
3. to appoint a fiscal to prosecute a complaint of professional misconduct before the SSDT.

Where the Professional Conduct Sub-committee has made a finding of UPC against a solicitor, it must give consideration to the appropriate sanction to be applied in respect of the offending conduct. In terms of Section 42ZA(3) of the 1980 Act, the Sub-committee is required to censure the solicitor; but then has discretion to take further steps by applying any of the range of actions set out at subsection (4), or a combination of them.

Those steps are:

a) to direct the solicitor to undertake such education and training as regards the law or legal practice as is considered appropriate;

b) to pay a fine not exceeding £2,000;

c) to direct the solicitor to pay compensation to the complainer for loss, inconvenience or distress resulting from the offending conduct, up to a ceiling of £5,000.

The leading authority on the principles and purpose of imposition of sanction in professional disciplinary matters is an English one, Bolton -v- The Law Society [1993] EWCA Civ 32. The case concerned an appeal by the professional regulator against the decision of the Divisional Court to quash an order by the Solicitors Disciplinary Tribunal that the solicitor, Mr Bolton, be suspended from practice.

Sir Thomas Bingham MR, set out the view of the court that "[a]ny solicitor who is shown to have discharged his professional duties with anything less than complete integrity, probity and trustworthiness must expect severe sanctions to be imposed upon him by the SDT". He observed that whilst a sanction imposed may include a punitive element inasmuch as "...a penalty may be visited on a solicitor...in order to punish him for what he has done and to deter any other solicitor tempted to behave in the same way", often a sanction is not punitive in intention, and punishment will not be appropriate at all in some circumstances, such as where a criminal penalty has already been imposed and satisfied.

The primary purposes of sanction were stated to be, therefore "...to be sure that the offender does not have the opportunity to repeat the offence" and "...the most fundamental of all: to maintain the reputation of the solicitors' profession as one in which every member, of whatever standing, may be trusted to the ends of the earth...[A] member of the public ...is ordinarily entitled to expect that the solicitor will be a person whose trustworthiness is not, and never has been, seriously in question. Otherwise, the whole profession, and the public as a whole, is injured. A profession's most valuable asset is its collective reputation and the confidence which that inspires".

Sir Thomas noted that because orders of the SDT were not primarily punitive, it followed that considerations which would ordinarily weigh in mitigation of punishment have less effect in a professional disciplinary context than in a criminal one. He observed that "it often happens that a solicitor appearing before the Tribunal can adduce a wealth of glowing tributes from his professional brethren. He can often show that for him and his family the consequences of striking off or suspension would be little short of tragic. Often he will say, convincingly, that he has learned his lesson and will not offend again...All these matters are relevant and should be considered. But none of them touches the essential issue, which is the need to maintain among members of the public a well-founded confidence that any solicitor whom they instruct will be a person of unquestionable integrity, probity and trustworthiness. Thus it can never be an objection to an order for suspension in an appropriate case that the solicitor may be unable to re-establish his practice when the period of suspension is past. If that proves, or appears likely to be, so the consequence for the individual and his family may be deeply unfortunate and unintended. But it does not make suspension the wrong order if it is otherwise right. The reputation of the profession is more important than the fortunes of any individual member. Membership of a profession brings many benefits, but that is part of the price".

Sir Thomas' comments were cited with approval by the Inner House of the Court of Session in Re Petition of McMahon & Others [2002] ScotCS 36, and may accordingly be regarded as applicable equally in the Scottish jurisdiction.

More recently, separately from the purely legal approach set out in Bolton, the focus on the public interest in the context of legal sector regulation has acquired significantly more importance. Protection of the public interest may therefore also be considered reasonably to be one of the most important factors in the application of sanction in cases where a solicitor has been the subject of a finding of UPC.

The principles by which the Council of the Law Society of Scotland applies sanctions for UPC are, accordingly:

1. to protect the public;
2. to maintain the reputation of the profession, and maintain public confidence in the fairness and effectiveness of the regulation of the profession;
3. to uphold the proper standards of conduct in the profession;
4. to correct and deter breaches of those standards;

The application of sanction for UPC ought to be approached in terms of the following process:

• assess the seriousness of the conduct
• keep in mind the purposes for which sanctions are imposed
• choose the sanction which most appropriately fulfils that purpose for the seriousness of the conduct

Sanction should be proportionate to the conduct which underlies the finding of UPC, and should be considered in ascending order of seriousness – such a methodology ensures that the sanction selected is sufficient, but no more than is necessary to achieve the purpose for which it is being imposed. It is good practice for the Professional Conduct Sub-committee, when selecting a sanction, to refer to the next most serious sanction and explain why it is considered not to be appropriate, to satisfy itself, and the relevant parties, that the correct sanction has been chosen.

Imposition of sanctions from the range available should itself be the subject of specific consideration as follows:

Censure

Application of a censure is mandatory in all cases in which a finding of UPC is made by the Professional Conduct Sub-committee.

Education and training

It is a prerequisite for the application of this sanction that the Professional Conduct Sub-committee must consider that the solicitor does not have sufficient competence or knowledge in relation to an aspect of the law or legal practice. It follows that it will ordinarily be applied where the UPC has resulted from a demonstrable deficiency in the solicitor's knowledge or application of the law or legal practice, as a means of:

i. correcting a departure from the standards of conduct in the profession;
ii. protecting the public from any future recurrence; and
iii. thereby maintaining the reputation of the profession

Although it is recognised that historically the imposition of a training or education order has been used infrequently, it remains the case that it has been inserted in the statute for a purpose and should be selected where there is a genuine and meaningful benefit to be derived from it. Before imposing an education or training order, the Professional Conduct Sub-committee should satisfy itself as to the availability of a suitable course of education or training to permit such a course to be identified with the reasonable certainty that it can be undertaken within a finite time period by the solicitor; and that if undertaken successfully, that it is reasonably likely to achieve its purpose.

Selection of this sanction will ordinarily not be appropriate where there is no identifiable deficiency in a solicitor's knowledge or application of the law or legal practice. It should not be used as a means of imposing a form of administrative penalty, in the sense of unnecessarily taking up the solicitor's time by requiring attendance or participation in a course of education or training which objectively will not achieve any of the purposes of its imposition.

Fines

Financial penalties are a flexible method of deterring unsatisfactory professional conduct by those directed to pay them, and also others considering similar conduct. Fines should be a proportionate outcome in the public interest.

Section 42ZA(3) of the 1980 Act empowers the Law Society to impose a fine of up to £2,000 for UPC. The Professional Conduct Sub-committee should consider utilising the full scale of fine available to it; and, per the rationale set out in Bolton above, a solicitor who has been the subject of a finding of unsatisfactory professional conduct should expect a sanction within the available range to be imposed upon him or her. In order that public confidence in the fairness and effectiveness of the regulation of the profession is maintained, and that breaches of the standards of proper conduct in the profession are deterred credibly, the imposition of a fine even at the upper level of the available range should not be viewed as an exceptional sanction.

The Sub-committee requires to bear in mind that Section 42ZA(6) of the 1980 Act provides that a fine shall not be imposed on a solicitor for UPC where, in relation to the subject matter of the complaint, the solicitor has been convicted by any court of an act involving dishonesty and sentenced to a term of imprisonment of not less than two years.

In deciding whether or not to impose a fine (where it is competent to do so), and, if so, the level of that fine, the Professional Conduct Sub-committee should therefore apply a three-part process:

i. determine a basic penalty taking into account the seriousness of the unsatisfactory professional conduct

On the basis that the statutory ceiling must be intended to apply to the most serious cases of UPC (which, it would follow, are matters falling slightly short of being capable of amounting to professional misconduct by virtue either of the nature of the conduct, or of the inability of the material facts to meet the higher standard of proof required for a finding of professional misconduct to be made), the highest basic penalty should be the maximum permitted, notwithstanding that that leaves no room for adjustment to be made for any aggravating factor.

However, at the lowest level, a basic penalty should be set at a level which would allow it, in the presence of suitable mitigating circumstances, to be reduced (in some cases even to nil).

A broad categorisation covering the available scale is suggested below:

Seriousness of UPC / Basic penalty

Minor / £50 - £200
Clear / £201 - £800
Significant / £801 - £1200
Serious / £1201 - £2,000

ii. adjust for aggravating or mitigating factors

Once the Professional Conduct Sub-committee has determined the appropriate level of the basic financial penalty, it should apply its mind to the question of whether there are any aggravating or mitigatory circumstances which would require that to be adjusted.

It is not considered to be necessarily helpful for an exhaustive list of aggravating or mitigatory factors to be compiled, but the Professional Conduct Sub-committee should be careful to distinguish between factors which go to conduct and factors which go to sanction[1]. At this stage of the determination process, the seriousness of the solicitor's conduct has already been established with reference to any aggravating or mitigatory circumstances in arriving at a finding of UPC. Accordingly, it is only factors which objectively would justify a higher or lower financial penalty which should be taken into account in determining whether an adjustment to the basic penalty is appropriate.

In that regard, factors which may justify an adjustment upwards of the basic penalty may include:

• premeditation
• a failure to accept culpability/lack of insight into the offence
• a failure to co-operate with the Law Society's investigation of the matter
• the existence of previous findings of UPC or professional misconduct against the solicitor (for further discussion see "Consideration of Previous Findings" infra)

and factors which may justify an adjustment downwards may include:

• early acceptance of culpability/demonstrative insight into the offence
• provision of an apology to any party affected
• action taken to remedy any harm caused by the UPC
• a clean disciplinary record
• personal or professional circumstances, including any medical considerations
• positive personal or professional references

Adjustment upwards or downwards in respect of aggravating or mitigatory circumstances should not be restricted to the indicative band for basic penalty for the seriousness of the UPC, and may cross into what would otherwise be on its face a more serious or less serious category.

[1] For further discussion see paras 1.17-19 of Paterson and Ritchie, Law, Practice and Conduct for Solicitors 2nd edn W Green 2014

iii. eliminate financial gain resulting directly from the conduct

Regardless of the level of seriousness of the solicitor's UPC, he or she should not be able to profit from the impropriety. In circumstances where a compensation order is not appropriate for the purpose of eliminating any financial gain which is the direct result of a solicitor's unsatisfactory professional conduct, the full scale of fine available to the Professional Conduct Sub-committee should be used to do so. It follows that, for example, minimal or minor UPC may nonetheless attract the maximum fine on the statutory scale.

The means of a solicitor to pay a fine which has been imposed is a relevant consideration for the Professional Conduct Sub-committee, and confirmation from the solicitor of his or her ability to pay a fine, should one be imposed, is sought expressly during the investigation of each complaint. In the absence of any comment from a solicitor in that regard, the Professional Conduct Sub-committee is entitled to proceed on the basis that the solicitor is able to pay a fine.

Where a solicitor has made representations to the effect that the imposition of a fine would cause undue financial hardship, the Professional Conduct Sub-committee should take this into account in its assessment of the appropriate level of penalty. The Sub-committee should however keep in mind the purposes of the imposition of a penalty, and the dicta in Bolton to the effect that whilst hardship caused to a solicitor by the imposition of a particular sanction may be unfortunate and unintended, it does not necessarily make the penalty wrong if it is otherwise right.

Compensation

The Professional Conduct Sub-committee may make awards of compensation up to the statutory ceiling of £5,000 in respect of loss, inconvenience or distress resulting from a solicitor's unsatisfactory professional conduct, and should consider in every case whether it would be appropriate to do so – the consideration of an award does not require a specific claim to be made by the complainer.

As with fines, the Sub-committee should be prepared to utilise the full scale of compensatory award open to it.

Loss

To attract an award of compensation, losses suffered by the complainer should be attributable directly to the solicitor's unsatisfactory professional conduct, and should be fully vouched by the complainer. It is recognised that properly vouched losses may exceed the statutory ceiling on the amount of compensation which can be awarded by the Sub-committee, and in such cases the maximum award will ordinarily be appropriate, regardless of whether any element of the award is attributable otherwise to inconvenience or distress, and irrespective of whether the complainer may have any alternative remedy for recovery of the losses. If the PCSC considers that a compensatory award for loss would be appropriate but vouching has not been exhibited, the PCSC should satisfy itself that vouching has been requested; and, if it has not, it should request it from the complainer.

Inconvenience

In the ordinary course, the mere fact of having required to make a complaint to the SLCC and participate in an investigation by the Law Society which results in a finding of UPC will have occasioned at least some inconvenience upon the complainer, in respect of which consideration should be given to making at least a nominal award of compensation (accepting that the Sub-committee will retain a discretion not to do so).

The separate question of whether any extraneous inconvenience has been suffered by the complainer as a direct result of the solicitor's conduct will rely on the specific circumstances of each case. The seriousness of the solicitor's conduct may or may not correlate with the inconvenience suffered by the complainer – for example, a minimal or minor conduct offence may cause severe inconvenience to the complainer, and a serious conduct infraction may cause the complainer virtually no inconvenience. The Sub-committee should therefore assess the inconvenience, and consequently the level of any award of compensation, with reference to the effect of the UPC on the complainer, rather than to the seriousness of the conduct offence.

Distress

The Sub-committee's assessment of distress should be undertaken along the same lines as that for the inconvenience occasioned upon the complainer as a direct result of the solicitor's unsatisfactory professional conduct. Accordingly, the level of distress caused to the complainer may range from nil to exceptional, and will depend largely on the specific circumstances of each case. As with assessing inconvenience, a complainer's distress and any compensation award in respect of it should be assessed with reference to the effect of the UPC on the complainer, rather than to the seriousness of the conduct offence.

A suggested indicative scale, addressing both inconvenience and distress, is set out below:

Level of Inconvenience or Distress / Range of Compensation

Inconvenience of having required to complain / £25 - £100
Minor / Additionally £101 - £500
Clear / Additionally £501 - £1,000
Significant / Additionally £1,000 - £2,500
Exceptional / Additionally £2,500 - £5,000

Section 46 (1) of the 2007 Act defines "complainer" as "the person who makes the complaint and, where the complaint is made by the person on behalf of another person, includes that other person". Section 42ZA(4) provides that compensatory awards in respect of UPC may be made to "the complainer".

Accordingly, where there are multiple complainers jointly making a single complaint to whom an award of compensation is being contemplated, the aggregate compensation to those multiple complainers may not exceed the statutory ceiling.

Section 42ZA(5) of the 1980 Act provides that the Council of the Law Society (in this context acting through the Professional Conduct Sub-committee) may, in considering a complaint, take account of any previous determination by the Society, the SSDT or the Court upholding a complaint against the solicitor of unsatisfactory professional conduct or professional misconduct, under exclusion of findings which are subject to appeal, or which have been quashed on appeal. It follows that there is explicit statutory authority permitting the Sub-committee to take into account a solicitor's disciplinary record in considering the appropriate sanction to impose in respect of UPC.

In order to comply with the ECHR Article 6 right to a fair trial, any previous determinations should be placed before the Sub-committee only after the Sub-committee has determined to uphold a complaint as UPC – in other words, the prior determinations may legitimately be considered in the application of sanction, but not in the assessment of culpability.

In terms of Section 46(1) of the 2007 Act, "practitioner" (upon whom the sanctions set out in Section 42ZA of the 1980 Act may be imposed) includes a solicitor, whether or not the solicitor had a practising certificate in force at that time and notwithstanding that subsequent to that time the name of the solicitor has been removed from or struck off the roll or the solicitor has ceased to practise or has been suspended from practice. It follows that the Professional Conduct Sub-committee can apply sanctions for UPC, where appropriate, to a solicitor regardless of whether the solicitor remains enrolled as such at the date of the Sub-committee's determination, provided that the solicitor was enrolled at the date of the UPC for which the Sub-committee seeks to impose a sanction.

Appeal to the SSDT against the sanction imposed is competent by both the complainer (under Section 42ZA(10) in respect of a decision not to award compensation, or under Section 42ZA(11) in respect of the amount of any compensation awarded) and the solicitor (under Section 42ZA(9)(b) in respect of any of the range of sanctions applied to him or her) in any case. The Sub-committee should keep in mind that it is therefore essential that its reasons for imposing a sanction, and for the nature and level of that sanction, are fully ventilated and recorded.