High Court case brings issue of dishonesty in solicitors’ profession into focus

The case of Law Society of Ireland v Kathleen Doocey^[1], where the Law Society of Ireland (the “Law Society”) brought an application to have Ms Doocey’s name struck off of the Roll of Solicitors, provides a stark reminder of the seriousness of any misconduct allegation against a solicitor. The case also highlights that the Law Society does not necessarily need to follow the recommendation of the Solicitors Disciplinary Tribunal (“SDT”) when making its application to the High Court.

Background

Ms Doocey was admitted as a solicitor on 17 February 2014, and practiced as KM Doocey solicitors In Belmullet, County Mayo. The issues for Ms Doocey arose further to an inspection of her accounts by the Law Society.  In the course of the inspection it became apparent that there was a deficit of €169,000 on her client account as of 31 December 2017, as well as there being a significant number of irregular transactions whereby Ms Doocey moved funds between client and business accounts and between client ledgers in order to conceal the shortfalls.

As explained by Ms Justice Irvine in her judgment, “This process is referred to as ‘teeming and lading’ or in more common parlance ‘borrowing from Peter to pay Paul’”.

SDT

The inspection led to a hearing before the SDT on 23 July 2019. At the hearing, Ms Doocey admitted certain of the allegations of misconduct and further admitted that they constituted misconduct. There were 24 findings of financial irregularities in breach of obligations under the Solicitors Acts and the Solicitors Accounts Regulations.

It was also noted that there had been two previous disciplinary matters relating to Ms Doocey which were also in relation to breaches of the Solicitors Accounts Regulations.

The SDT adjourned their hearing until 9 January 2020 in order for the Law Society’s accountant to review the Respondent’s practice and prepare a report. That was put before the SDT at a reconvened hearing on 9 January 2020.  At that hearing, the SDT was informed of the checks and balances on Ms Doocey’s practice in order to ensure her compliance with the SDT.  The system which had been put in place meant that Ms Doocey did not have any control over the writing of cheques or access to client funds.

Further to this, the SDT took the view that it would not recommend Ms Doocey’s strike off, but rather recommended that her practising certificate be issued subject to certain conditions.  The conditions suggested were that:-

• All cheques issues from Ms Doocey’s practice be signed by a third party solicitor;
• No funds would be lodged directly to the solicitor’s office account;
• Transfers of funds would first be authorised by a person employed in a supervisory capacity; and
• If either the supervising solicitor or accountant indicated their intention to cease their supervisory function, the Law Society would be notified.

The SDT also recommended that Ms Doocey pay €10,000 to the compensation fund and €1,500 as a contribution to the whole of the costs of the Law Society.

The SDT’s recommendation was based upon the following mitigating factors:-

• Ms Doocey admitted the acts of misconduct at the outset and the fact that those amounted to professional misconduct;
• Ms Doocey had made good the deficit in her client account;
• That the conduct had not resulted in any financial loss to her clients and so no claim had been made on the Law Society’s compensation fund; and
• That there had been a cyber-attack on the account of one particular client which had resulted in a loss to the practice of €50,000.

Law Society Application

In spite of the position taken by the SDT, the Law Society did not agree with the recommendation suggested by it.  The Law Society instead urged the Court to impose a harsher sanction on Ms Doocey and to therefore strike her off from the Roll of Solicitors.  This was on the basis that her behaviour in terms of moving money between accounts showed “a complete disregard by the respondent [Ms Doocey] of her obligations under the Solicitors Act and Solicitors Accounts Regulations.”  The Law Society viewed that such a sanction would be appropriate and proportionate in the circumstances.

The Law Society also sought that Ms Doocey pay a sum of €10,000 to the compensation fund and €1,500 as a whole to the costs of the Law Society – as per the SDT’s recommendation on the costs front – along with costs of the application.

The Law Society took its position on the basis that Ms Doocey had admitted the allegations and where the findings showed aspects of dishonesty, then the allegations had to be considered to be at the upper – if not the highest – level of misconduct.  The Law Society referred to her “acts of concealment and deceit combined with her reckless disregard for her responsibilities as a solicitor in relation to clients’ monies in support of its position.”

The Law Society highlighted the need for there to be serious consequences for the solicitor in this case, and pointed to the fact that even she had said she should only be allowed to practice where she did not have independent control of her clients’ or office’s money.

The Law Society pointed to numerous cases which also outline that only persons who have integrity, probity and trustworthiness can be admitted^[2] to the profession.

The Law Society mentioned that even though it considered a Strike Off to be necessary, that it would not necessarily exist in perpetuity and she could seek to apply to have her name restored to the Roll at some stage in the future.

Finally, the Law Society considered the mitigating factors and indicated that it felt those points, particularly in relation to the cyber-attack, only took Ms Doocey so far.  They noted that the misconduct did not take place during a time of personal difficulty either.  The Law Society finally pointed out that Ms Doocey had not made any income tax or VAT returns as yet either.

On the other hand, Ms Doocey argued that the Court should follow the recommendation of the SDT and were proportionate and appropriate.  She argued that the conditions proposed by the SDT were still a significant sanction as they also places a restraint on her ability to practice, and that these met the objectives of public protection and to ensure financial mismanagement would not occur.

Her view was that the suggestion that she was dishonest was unfair in that she argued that the issues which arose were as a result of “a chaotic and incompetent approach on her part towards the finances of her client and her practice”.   She argued that she provided a good service to her clients and that no one had suffered a loss as a result of the situation.

Ms Doocey also pointed to the fact that she was inexperienced and unsupported due to being in an isolated practice, whilst appreciating that her actions did fall short of the standard to be expected.

Her view was that the Law Society had not outlined why the conditions suggested by the SDT would not adequately protect the public or serve to mark its disapproval of its conduct.  She felt a strike off would also not deal with the mitigating factors which she had put forward.

High Court Judgment

The High Court application was brought by the Society pursuant to section 7(3)(c) of the Solicitors (Amendment) Act 1960 (as substituted by section 17 of the Solicitors (Amendment) Act 1994 and as amended by section 9 of the Solicitors (Amendment) Act 2002. Therein at section 8 of the Solicitors Act 1960 (as amended) the Court may, on receipt of a report prepared by the applicant containing recommendations on sanction, give any decision or make any order that it thinks fit.

Ms Justice Irvine noted that the Court has to carry out an examination of the issues and thereafter make its own decision. In doing so, the Court must take all of the facts underlying the findings of fact into consideration and consider all of the factors involved, including mitigation, should there be any.

Irvine J. also pointed out that in cases of proven dishonesty, then strike off will be a primary consideration.  In this case, the judge considered that the misconduct was at the upper end of the scale.  She did not accept that Ms Doocey’s behaviour was merely chaotic, and instead found it to be “systemic, extensive and deliberate teeming and lading…”, and that this was designed to disguise the fact that she had borrowed from the client account.
Ms Justice Irvine was also particularly unimpressed at the suggestion that she was inexperienced and had a lack of training, where she would have had examination on such issues during her professional training.  Of note is also the fact that the judge was not persuaded by the notion that her clients had suffered no financial loss as a result of her actions.  She felt that this showed a lack of understanding in relation to her obligations towards her client which she noted “is a persuasive factor is assessing her fitness to practice and bears heavily on my assessment.”  Nor was Irvine J. moved by the notion that Ms Doocey had served her clients well when this was taking place.  She was also critical that no explanation had been provided as to where the monies had gone initially.

Essentially Ms Justice Irvine was not persuaded by any of Ms Doocey’s points. The fact she had not made income or VAT returns compounded the issue, as did the fact Ms Doocey had already been warned over issues relating to the Solicitors Accounts Regulations.
Therefore Irvine J made the order to Strike Off Ms Doocey and agreed the orders in relation to costs as made by the Law Society. This was done to protect the public and to highlight the Court’s disapproval of Ms Doocey’s actions. She considered her actions to be dishonest in that she dishonestly handled clients’ money.

Conclusion

The first point arising from this case is that it should be borne in mind that the recommendations of the SDT need not be the recommendation which the Law Society asks the High Court to follow when making an application.  Whilst it is still relatively unusual that the Law Society receommend a higher sanction, those subject to such regulatory proceedings should be aware that the sanction could be more onerous than that which the SDT makes.

Secondly, and more importantly, this case highlights that should there be any element of dishonesty in a solicitor’s behaviour, the Law Society – and the High Court – will consider this behaviour likely requires a strike off from the roll.  There will be little that can be said by way of mitigation when there has been dishonest behaviour which will reduce the sanction from a strike off.

It is once again highlighted in Irvine J’s judgment that professional regulation, as well as appropriate and proportionate sanctions, are required for the following:-

• To maintain the reputation of the profession;
• To mark the disapproval of certain conduct – particularly in respect of conduct which shows a failure to comply with the standards of honest and integrity required of the profession;
• To discourage others in the profession who may be tempted to emulate certain misconduct;
• To protect the public – and specifically to protect the public from solicitors or practices who put their funds at risk.

This case acts as an important reminder to all in the profession of the need to act with honesty and integrity in all dealings.

^[1] [2020] IEHC 581
^[2] Law Society v Enright [2016] IEHC 151; Law Society v Herlihy [2017] IEHC 22; Law Society of Ireland v Coleman [2020] IEHC 381; Law Society of Ireland v Carroll [2016] 1 IR 676

For further information on this topic, please contact Laura Graham at lgraham@reddycharlton.ie