England and Wales High Court (Administrative Court) Decisions

1. This is the judgment of the Court on Mr Rowe's appeal.

2. On 2 October 2000, at the beginning of the hearing of the Respondent's application to the Solicitors' Disciplinary Tribunal complaining of professional misconduct on the part of the partners of the firm of Ironsides Solicitors, the Tribunal gave consent for the withdrawal of her application against John Rowe, the Appellant, and a former partner of that firm, and ordered her to pay to him as his legal costs the sum of £400 plus VAT. His actual legal costs were considerably more than that sum. He appeals against the order made in respect of his costs. He contends that the decision of the Tribunal to award him only a small portion of his costs was unreasonable and perverse, that the reasons given for it were defective; that the decision was clearly wrong; and that this Court should order the Respondent to pay him all his costs, which this Court should assess.

3. The Respondent contends that the costs order was properly made by the Tribunal in the exercise of its discretion and cannot and should not be interfered with.
The facts

4. In October 1998 Miss Lindsay joined Ironsides as a legal assistant, with a view to her taking the Law Society's Final and qualifying as a solicitor. Mr Rowe was then an equity partner in the firm. In February 1989 she became a trainee solicitor. In June 1989 she applied to the firm for financial assistance. It was refused. At around the same time the firm did give financial assistance to other trainees. They were white; Miss Lindsay is black. In July 1990 she took her Law Society Finals. She failed 4 papers, which meant that she would have to retake the examination. The firm decided not to continue her training contract and to terminate her employment. In previous years other white trainees who had failed their exams had been given money towards their re-sits and told that they could return to the office when they had retaken their Finals. Miss Lindsay left the firm on 31 January 1991.

5. Mr Rowe had worked in the firm's Northampton and Wellingborough offices. Miss Lindsay had worked at their offices in Leicestershire. According to his solicitors' letter of 3 July 2000, he was out of the office through sickness at the time of the firm's refusal in June 1989 to assist her with funding. He had left the firm in the summer of 1990. He was not involved in its management after June 1990 and he was not a partner when the decision was made to dismiss Miss Lindsay.

6. Miss Lindsay instituted proceedings against the firm of Ironsides before an Industrial Tribunal alleging that the firm had unlawfully discriminated against her. The Industrial Tribunal found that the firm had unlawfully discriminated against her in two respects: in refusing in June 1989 to provide her with funding, and in dismissing her. Mr Rowe was not a party to those proceedings and was never served with them.

7. Miss Lindsay then approached the Office for the Supervision of Solicitors. In July 1997 they found that Ironsides had breached Rule 1 of the Solicitors' Practice Rules in that they had compromised the good repute of the profession, but they resolved to take no further action.

8. In November 1998, Miss Lindsay made her application to the Solicitors' Disciplinary Tribunal against Ironsides as a firm. Her complaint was that the firm had unlawfully discriminated against her in making the decision to refuse her funding in June 1989 and in dismissing her. On 30 September 1999 the Tribunal held an interlocutory hearing to identify the proper respondents to her application. The Tribunal decided that all of the equity and salaried partners of the firm during the times material to her application should be named respondents. They of course included Mr Rowe. From that date he was a party to the Tribunal proceedings.

9. On 10 February 2000, Mr Rowe's solicitors wrote to Ms Lindsay asking her to reconsider whether it was appropriate for him to be made a respondent, setting out the facts relevant to his position, and stating that if the allegations against him were ultimately dismissed, they would ask for an order for costs in his favour. Ms Lindsay replied promptly. Her letter of 12 February 2000 stated:

"As you are aware, some of the material decisions taken by the firm date back to 1989. Therefore, I shall not withdraw my application against Mr Rowe who would have ratified those decisions of the management committee."

10. On 30 May 2000, Mr Rowe's solicitors wrote to Ms Lindsay's solicitors, who had been recently instructed, expressing the hope that they would consider the merits of the case against Mr Rowe. In their reply of 16 June 2000, Ms Lindsay's solicitors indicated that she would be prepared to agree to withdraw against him on the basis that each of them would bear their own costs. In their letter of 3 July 2000, Mr Rowe's solicitors stated that he would agree to accept a contribution of £400 to the costs he had incurred of £637 plus VAT. Following further correspondence, Ms Lindsay's solicitor wrote on 24 July 2000, stating:

"... my client will release your client from the proceedings on the basis that there be no order for costs.
If your client is not prepared to agree to same then I am instructed to continue to proceed against your client for the reasons outlined above."

11. In early September 2000, Ms Lindsay offered to dispose of the application against Mr Rowe by paying £150 towards his costs. In their response, Mr Rowe's solicitors argued that he could not be found guilty of professional misconduct on the basis of purely vicarious liability for the acts of his partners. Ms Lindsay's letter of 26 September indicated that she did not accept this: she referred to a case in which a solicitor had not been personally culpable, but had been fined and had to pay the costs. In their letter of 27 September 2000, Mr Rowe's solicitors stated that his costs to date were £985, and that their estimate of future costs if the case went forward was over £10,000. Nonetheless, they offered to settle the case if Ms Lindsay agreed to make a contribution of £400 plus VAT towards his costs. Ms Lindsay replied immediately by fax on 28 September 2000, making it clear, for the first time, that the only issue between her and Mr Rowe was costs, and that she was not seeking a finding of misconduct against him, and maintaining her offer of £150, which would be open until the start of the hearing.
The Tribunal's decision

12. The hearing before the Tribunal took place on 2 October 2000, the Monday after the Thursday of 28 September. The question of withdrawal against Mr Rowe was dealt with first. Ms Lindsay's counsel and Mr Rowe's solicitor set out the facts summarised above and went through the correspondence. Ms Lindsay's counsel submitted that there be no order for costs; Mr Rowe's solicitor asked for his costs. Mr Rowe's solicitor, Mr Fairbairn, did not mention any figure or deal with the amount of his costs, other than to refer to his letter of 27 September.

13. The Chairman of the Tribunal, Mr Yeaman, granted leave for the application against Mr Rowe to be withdrawn and, as stated above, ordered costs of £400 plus VAT to be paid by Ms Lindsay. Mr Fairbairn protested that he had not addressed the Tribunal on the quantum of costs; he stated that his client's costs were over £2000, because a lot of work had been done before the receipt of Ms Lindsay's fax of 28 September 2000. He stated that the sum of £400 barely covered the cost of coming to the Tribunal hearing that day. The Chairman stated:

"Mr Fairburn (sic), we understood that. Nevertheless, our order was for £400 plus VAT."

It is apparent, therefore, that the Tribunal was aware that it was awarding Mr Rowe only a small part of the costs he had incurred.

14. The Tribunal's written Findings against the Respondents to Ms Lindsay's application included the following paragraph:

"The Tribunal made an Order for costs in favour of Mr Rowe. The quantum of costs had been discussed between Miss Lindsay and those instructed by Mr Rowe , who had indicated that £400 would dispose of the matter. Despite the fact that Mr Rowe had been represented at the hearing when the Tribunal consented to the withdrawal of the allegations against him, the Tribunal considered it right to fix the costs at that level. Miss Lindsay had already indicated her willingness to withdraw. It is one of the burdens of being a solicitor that one must deal with question's as to one's professional conduct from time to time. The Tribunal did not think it right to require Miss Lindsay to pay any greater figure."

Discussion

15. Mr Temmink, on behalf of Ms Lindsay, rightly accepted that in this passage the Tribunal gave its reasons for the order for cost that it had made. Mr Atkins, for Mr Rowe, submitted that the reasons given for their decision were factually incorrect or bad in law. We agree with his criticisms of the reasons given by the Tribunal. So far as the first reason given by the Tribunal is concerned, Mr Rowe's early indication that £400 would dispose of the matter was not a reason to award him that sum when his offer had not been accepted and additional costs had subsequently been incurred by him. Ms Lindsay had not unconditionally indicated her willingness to withdraw until 28 September, a few days before the hearing, by when significant costs had been incurred. Mr Atkins on instructions confirmed that until receipt of that fax Mr Fairbairn had been preparing for a substantive hearing: hence the amount of costs set out in the schedule of Mr Rowe's costs placed before us. Ms Lindsay's willingness to withdraw at that late date was no justification for a reduced order for costs.

16. So far as the second reason given by the Tribunal is concerned, the fact that a solicitor may have to deal with questions as to his professional conduct from time to time is no reason to deprive him of his costs if he is successful in proceedings before the Solicitors Disciplinary Tribunal. A similar comment might be made in relation to civil actions for professional negligence, but could not justify depriving a successful professional man of any part of his costs in such proceedings.

17. Mr Temmink pointed out that the power of the Tribunal to award costs is contained in Rule 22 of the Solicitors (Disciplinary Proceedings) Rules 1994:

"Upon the hearing or determination of any Application the Tribunal may in the case of an application against a solicitor, former solicitor, or registered foreign lawyer without finding any allegation of unbefitting conduct proved against the respondent or in the case of an application in respect of a solicitor's clerk, without making any Order under section 43(2) of the Act nevertheless order any party to pay the costs if having regard to his conduct or to all the circumstances, or both, the Tribunal shall think fit."

He reminded us that the Tribunal is not a civil court, and submitted that the practice relating to civil costs is not applicable to proceedings before it. He also submitted that the decision of the Tribunal was justified by the fact that, as he stated in his skeleton argument, there had been misconduct on the part of Mr Rowe "in circumstances where he was bound by the actions of his colleagues". In this connection he relied on the findings of the Industrial Tribunal and the Office for the Supervision of Solicitors, and the Tribunal's decision to join Mr Rowe as a respondent, which had not been challenged. He submitted that in any event the costs order was one that the Tribunal was entitled to make in the exercise of its discretion.