Beckwith misconduct finding overturned by the High Court
The High Court provides clarity on the scope of regulator’s reach into private life.
Ryan Beckwith, former partner of Freshfields Bruckhaus Deringer, succeeded in his appeal against the Solicitors Disciplinary Tribunal's findings that he had breached SRA Principles 2 and 6 after a "sexual encounter" with a junior colleague in 2016 outside working hours.
The Tribunal had concluded that Beckwith's actions were a breach of Principle 2 of the 2011 Principles, the obligation to act with integrity, and also a breach of Principle 6, the requirement to behave in a way that maintains the trust the public places in solicitors and in the provision of legal services.
Beckwith's appeal was brought under section 49 of the Solicitors Act 1974; he did not dispute the Tribunal's findings of fact, but argued that the Tribunal should not have concluded that his conduct amounted to a breach of Principle 2 or Principle 6; and challenged the Tribunal's decision on costs.
The High Court allowed Beckwith’s appeal and:
reversed the Tribunal's conclusion that he had failed to act with integrity (Principle 2) and undermined public trust (Principle 6)
quashed the order that he pay a fine of £35,000, and
set aside the £200,000 costs order (approximately 60% of the total costs claimed by the SRA which had been £343,957.08) made by the Tribunal in favour of the SRA.
The decision could have broader implications for other regulated sectors, such as the financial services sector, where the FCA has made clear that non-financial misconduct, as well as financial misconduct, are relevant to its assessment of fitness and propriety of regulated people.
It is important to remember that at the Tribunal "There was no allegation that that "encounter" took place without consent." This was because the SRA did not consider that consent was an issue that needed to be determined; the SDT concluded that it could still consider whether Beckwith's conduct was in breach of the Principles as alleged. In summarising the Tribunal's approach, the High Court said: "The Tribunal was therefore required to approach the matter on the basis that the sexual activity that occurred was consensual". Beckwith had argued at the Tribunal that consent was a central issue but for the purposes of the appeal he did not dispute the Tribunal's findings of fact (which did not include any express findings on the issue of consent).
Scope of Principles 2 and 6 and the right to respect for private life Article 8
The judgment examines the scope and reach of Principles 2 and 6 as set out in the SRA Handbook 2011 (which included both the 2011 Principles and the SRA Code of Conduct 2011):
Principle 2: You must act with integrity
Principle 6: You must behave in a way that maintains the trust the public places in you and in the provision of legal services
The High Court explores the tension between the public interest and private rights: "neither Principle 2 nor Principle 6 has unfettered application across all aspects of a solicitor's private life".
The right to respect for private life is balanced against the public interest in the regulation of the solicitor's profession.
Paragraph 5.1 of the Application Provisions to the Principles in the SRA Code of Conduct 2011, expressly states that Principles 1, 2 and 6 apply to activities falling "outside practice, whether undertaken as a lawyer or in some other business or private capacity."
Some private activities will rightly be the subject of regulatory scrutiny. But accepting that a person who exercises a profession may need, for the purposes of proper regulation in the public interest, to permit some scrutiny of his or her private affairs, is quite different from suggesting that any or all aspects of that person's private life must be subject to regulatory scrutiny.
"There can be no hard and fast rule either that regulation under the Handbook may never be directed to the regulated person's private life, or that any/every aspect of her private life is liable to scrutiny", said the High Court.
The High Court emphasised that Principle 2 and 6 may only reach into private life when "conduct that is part of a person's private life realistically touches on her practise of the profession (Principle 2) or the standing of the profession (Principle 6)".
Integrity
Approaching Principle 2 in this way keeps it within foreseeable boundaries by attaching the obligation to act with integrity to matters that touch upon professional practise as a solicitor. This is important for legal certainty.
Integrity is not defined in the solicitors' rules and is a nebulous concept to define.
The Solicitors Disciplinary Tribunal quoted Wingate and Evans v SRA, that integrity was "a useful shorthand to express the higher standards which society expects from professional persons and which the professions expect from the own members... [Professionals] are required to live up to their own professional standards... Integrity connotes adherence to the ethical standards of one's own profession."
But what does that mean in practice? Case law accepts that integrity includes dishonesty, but it also includes other conduct which is not dishonest.
In order to determine what that other conduct must be, the High Court held that these Principles should be construed by reference to the contents of the Handbook i.e. the body of rules made in exercise of the power at section 31 of the 1974 Act. The SRA's additional notes and guidance do not trump the legal construction of the Principles.
The key allegation concerned Beckwith's treatment of a work colleague outside working hours.
The High Court considered the relevant part of the 2011 Code of Conduct to be the part titled "You and Others", and in particular Chapter 11, "Relationships with Third Parties".
Acting with integrity, whether acting in a professional or personal capacity, obliges the solicitor not to take unfair advantage of others.
NB With effect from 25 November 2019 the Handbook was replaced by the SRA Standards and Regulations. The SRA's new code of conduct for solicitors and SRA Principles includes a new requirement to act with "honesty" (Principle 4) and retains the requirement to act with "integrity" (Principle 5). Under the new 2019 Code of Conduct, Para 1.2 "Maintaining trust and acting fairly" retains this concept: "You do not abuse your position by taking unfair advantage of clients or others".
The High Court placed emphasis on the Tribunal's finding that Beckwith had not acted in abuse of his position of seniority or authority: "What the Appellant did was, as the Tribunal concluded, inappropriate. But it was not conduct which on a proper reading of the 2011 Principles was capable of being characterised as showing a lack of integrity".
The Tribunal concluded:
Both Beckwith and Person A were "... influenced by ... alcohol consumption" and this impaired their judgement.
They had kissed downstairs in the pub.
They had agreed to share a taxi.
After they arrived at Person A's flat there was a "sexual encounter". There was no allegation that that "encounter" took place without consent.
Beckwith was senior to Person A. He was a partner in the firm; she had recently resigned her position as an associate.
In relation to consent, the High Court included extracts from the Tribunal judgment:
"25.176 Consent
25.176.1 The Applicant considered that consent was not an issue that needed to be determined. The Respondent considered that consent was a central issue and that without a determination as to consent, the Tribunal would be unable to consider whether the Respondent's conduct was in breach of the Principles as alleged.
25.176.2 The Tribunal found that it was for the Applicant to put its case on the basis that it deemed appropriate. The Tribunal would assess the evidence that it heard, and make a determination as to whether the Respondent's conduct was in breach of his duties. It was not for the Tribunal to consider matters that had not been alleged; to do so would be improper. Accordingly, the Tribunal did not find that a failure to raise consent as an issue in this matter meant that it was unable to consider whether the Respondent's conduct was in breach of the Principles as alleged."
According to the High Court: “The Tribunal was therefore required to approach the matter on the basis that the sexual activity that occurred was consensual". Beckwith was in a position of authority over Person A within the firm but the Tribunal concluded that the events of that evening were not an abuse of that position of authority and seniority. The Tribunal's final reasoning in support of the conclusion that Beckwith had acted in breach of Principle 2, went no further than that his conduct had "fallen below the standards expected of a partner at the Firm" and had "fallen below accepted standards".
The High Court concluded that given its findings of fact, it was "clearly right" to conclude that no abuse of authority had occurred. However, the Tribunal then fell into error by categorising those events, to be a breach of Principle 2:
In the context of the course of conduct alleged ... the requirement to act with integrity obliged the Appellant not to act so as to take unfair advantage of Person A by reason of his professional status. On the findings made by the Tribunal, that had not happened. In the premises, the Tribunal's final statement that the Appellant had "fallen below accepted standards" is not coherent. Whatever "standards" the Tribunal was referring to as ones which identified what, in the circumstances of this case, the obligation to act with integrity required, were not ones properly derived from the Handbook." (para 37 and 38)
The High Court focuses on the importance of legal certainty. It states that its analysis is premised on the need to define the requirement to act with integrity by reference to the standards set out in the Handbook: "Confining the obligation in this way preserves the legitimacy of the regulatory process by maintaining the necessary and direct connection between the obligation to act with integrity and rules made in exercise of the power at section 31 of the 1974 Act."
Undermining trust
The High Court adopts the same approach when determining the scope of Principle 6: the content of Principle 6 must be closely informed by careful and realistic consideration of the standards set out in the 2011 Code of Conduct. "Otherwise Principle 6 is apt to become unruly." (para 43)
What is the appropriate standard applied for determining breach of Principle 6? The SRA argued that the standard in this context was that the public would have a "... legitimate concern and expectation that junior members [of the profession or of staff] should be treated with respect ..." by other members of the profession.
The High Court accepted that submission as reasonable.
Seriously abusive conduct by one member of the profession against another, particularly by a more senior against a more junior member of the profession is clearly capable of damaging public trust in the profession.
The Tribunal asserted that Beckwith's behaviour crossed this line. At paragraphs 25.189 -- 25.190 the Tribunal stated that "Members of the public would not expect a solicitor to conduct himself in the way the [Appellant] had. Such conduct ... would attract the [dis]approbation of the public".
However, the Tribunal had already concluded that the Appellant's conduct did not amount to an abuse of his seniority or authority over Person A. On the application of Principle 6 to the facts of this case, that point was critical. The High Court found their conclusion "clearly correct".
The High Court found that the Tribunal's own findings were not capable of supporting the conclusion that Beckwith acted in breach of Principle 6. It said that what Beckwith did affected his own reputation; but distinguished this from conduct that affects the reputation of his profession as whole. Conduct amounting to an abuse by a solicitor of his professional position is clearly capable of engaging Principle 6. But, as the Tribunal concluded, that was not the case here.
In what may be seen as a rebuke to the legal regulators: "Regulators will do well to recognise that it is all too easy to be dogmatic without knowing it; popular outcry is not proof that a particular set of events gives rise to any matter falling within a regulator's remit" (para 54)
Conclusions
The High Court reversed the Tribunal's findings that Beckwith breached SRA Principles 2 and 6. It held that the Tribunal 'fell into error' by deciding that Beckwith lacked professional integrity; the sexual activity with a junior colleague was deemed to be consensual and he had not exploited his professional status to take unfair advantage of her.
When the Tribunal's judgment came out in January 2020, some commentators criticised the decision to fine, but not ban, Beckwith for not going far enough to recognise the seriousness of his conduct. Some may consider the "inappropriate" behaviour, crossed the line in terms of professional conduct obligations to act with integrity and not undermine public trust in the profession.
But the High Court’s decision provides welcome clarity on the scope of regulatory intervention into the private sphere. Consensual sexual activity which may be “inappropriate” will not automatically constitute professional misconduct in breach of the SRA Principles. “The duty of integrity does not require professional people to be paragons of virtue”, said the High Court. Principle 2 and 6 may only reach into private life when conduct that is part of a person’s private life that touches on their practise of the profession or the standing of the profession. Integrity as a concept must be assessed by reference to the Solicitors Handbook- the body of rules made in exercise of the power at section 31 of the 1974 Act.
The judgment clarifies the scope of the regulator's reach into the private lives of those it regulates. And the High Court says that its approach is not any form of permission to expand the scope of the obligation to act with integrity by expanding the scope of the rules further into regulated people's private lives: "Rules made in exercise of the power at section 31 of the 1974 Act (in the language of the Handbook, the "outcomes" and the "indicative behaviours") cannot extend beyond what is necessary to regulate professional conduct and fitness to practise and maintain discipline within the profession. (para 39)
The High Court's decision that the Tribunal was wrong on the issue of Principles 2 and 6 meant that it did not need to make findings on whether the regulator's actions had interfered with Beckwith's rights to privacy under Article 8. Any interference with the right under Article 8 of the European Convention on Human Rights for respect for private and family life, must be proportionate, in accordance with the law, in pursuit of a legitimate aim and reasonably foreseeable. Whether the requirements imposed by Principle 2 and Principle 6, respectively, meet the minimum standard of legal certainty (which is one part of the article 8(2) justification requirement) would have been an important issue.
The case highlights the inherent difficulty "principles-based" and "outcomes-focused" regulation creates for both regulators and the regulated professionals. Solicitors must uphold the Principles and comply with the Code of Conduct; together these set out the standards of professionalism expected of solicitors and provide a framework for ethical and competent practice and appropriate conduct and behaviour. The regulator can take enforcement action for a failure to meet these standards or a serious breach of the regulatory requirements, but there is, in some cases, a lack of clarity about the precise meaning of concepts such as "integrity" and accordingly a lack of legal certainty when it comes to enforcement.
New SRA Principles (2019)
You act:
in a way that upholds the constitutional principle of the rule of law, and the proper administration of justice.
in a way that upholds public trust and confidence in the solicitors' profession and in legal services provided by authorised persons.
with independence.
with honesty.
with integrity.
in a way that encourages equality, diversity and inclusion.
in the best interests of each client.
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