UK & Europe
Insurance & Reinsurance
It has been two years since the Supreme Court judgment in Ivey v Genting Casinos  AC 391. This set out the correct test when considering allegations of dishonesty and yet, in Solicitors Regulation Authority v Kwame Agyekum Siaw  EWHC 2737 (Admin), the High Court determined that the Solicitors Disciplinary Tribunal had erred in law when applying it. As we see a continued increase in charges of dishonesty, this judgment gives a reminder of what is needed to prove dishonesty.
Mr Siaw was a partner at The Mountain Partnership Solicitors. He received payments from clients which he did not put through the firm’s accounts. One payment came from a Mr K. Before the SDT Mr Siaw gave evidence that he had used the money from Mr K for outlays. This included £350 for an application for permission to apply for judicial review in Mr K’s case. However the tribunal checked this with the court who confirmed that no such application had been made. There were other allegations of misuse of funds and dishonest conduct.
The tribunal found the facts proved and then considered whether they amounted to dishonesty. Mr Siaw had admitted his conduct lacked integrity. The tribunal did not find that he was dishonest. They had regard to his motivations. They did not consider that there was a concerted effort to mislead and could not be sure by the standard of ordinary, decent people that Mr Siaw had been dishonest. Though Mr Siaw had misled the regulator, the tribunal did not find this to be calculated. They fined Mr Siaw £10,000.
The SRA appealed to the High Court. The appeal considered the SDT's application of the test for dishonesty. They noted that there had been an unqualified finding by the SDT that Mr Siaw had lied to and misled the regulator. They also found that the money, either in whole or in part, was money he should have paid to the firm. They noted that:
“The SDT has determined the issue of dishonesty at least in part by having regard to the respondent’s motive for doing what he did. That sets the bar too high or places an impermissible and irrelevant gloss on the Ivey test.”
The High Court held that this was serious dishonesty for which the only appropriate sanction was striking Mr Siaw off the Roll of Solicitors.
The Ivey test is a two stage test:
While the Ivey test provides scope for an individual’s belief as to the facts, the court has reinforced that it is too much of an extension to consider motive. That would be too close to assessing the individual’s state of mind as per the Ghosh test for dishonesty which Ivey replaced. The High Court had little difficulty in finding that the conduct would be viewed objectively as dishonest.
Allegations of dishonesty are increasingly prevalent before the regulators. The judgment of the High Court is another reminder for registrants and their representatives, as well as for tribunals and panels, that the test is essentially objective. The registrant's subjective motive is irrelevant. For those representing registrants it is therefore important to identify early on whether allegations may amount to dishonest conduct so that the registrant has as long as possible to reflect on their actions and, if they can, remediate their conduct.