Solicitor — Discipline — Appeal from Disciplinary Tribunal — Solicitors arranging with firm carrying out conveyancing searches to charge them “ commission” in respect of clients’ searches — Whether charge constituting “commission” — Whether solicitors guilty of conduct unbefitting a solicitor — Solicitors Practice Rules 1990, r 10

The Law Society v Adcock [2006] EWHC 3212 (Admin)

DC: Waller LJ and Treacy J: 20 December 2006

A discount or rebate on a price paid for services was not commission within the meaning of r 10 of the Solicitors Practice Rules 1990.

The Queen’s Bench Divisional Court so held dismissing an appeal by the Law Society against a decision of the Solicitors’ Disciplinary Tribunal dated 4 July 2006, by which they dismissed certain disciplinary proceedings against Mark Hedley Adcock and Neil Kenneth Mocroft.

The solicitors, partners in the firm Adcocks, entered into an arrangement with the Property Search Group (“PSG”) by which PSG carried out local authority and other searches in conveyancing matters. The lay client was charged the nominal full cost of the searches as a disbursement, but after the fee had been paid by Adcocks, Adcocks invoiced PSG for “commission” in the sum of £20. Adcocks relied on r 10 of the Solicitors Practice Rules 1990 as enabling them to retain that sum as commission without declaring it to the client. R 10 provided that solicitors should account to their clients for any commission received of more than £20, sums of £20 or less being considered de minimis. Opinion differed within the Law Society as to whether the sum was commission, earlier opinion permitting the practice but later opinion deprecating it. In another case the Law Society’s Review Panel and its Compliance Board Adjudication Panel concluded that the payment amounted to commission within the meaning of r 10, and resolved to take no action.

In August 2005 the Law Society made an application to the Solicitors Disciplinary Tribunal against the solicitors claiming that they had been guilty of conduct unbefitting a solicitor by providing misleading information to their clients and delivering inaccurate bills of account. The solicitors applied to have the proceedings before the tribunal struck out on the grounds that they were an abuse of process. The tribunal granted their application on the ground that on the agreed facts the Law Society could not succeed. The Law Society appealed.

WALLER LJ said that the question was whether on the allegation made by the Law Society there was a case for the solicitors to answer. A critical issue in considering that question was the true construction of r 10 of the 1990 Rules. R 10 was concerned with commission. What the solicitors were doing in receiving payment from PSG had nothing to do with receiving a commission. It was not a case of the solicitors putting a third party in touch with a client and thereafter receiving a commission for having done so. The payment of commission did not involve a discount or a rebate on a price paid for services. The conduct of the solicitors was not therefore covered by r 10 and the tribunal were wrong in their construction of that rule. That did not, however, mean that the solicitors were guilty of conduct unbefitting a solicitor and that the case should be remitted to the tribunal. Given that certain highly influential people within the Law Society had held the view that the £20 payment was commission it was inconceivable that any tribunal could find that the solicitors were dishonest and it was unlikely that a tribunal could find that they had acted in any way unbefitting of a solicitor. There was no evidence to suggest that the solicitors were aware of the change in the Law Society’s advice or its notice in the Gazette. Furthermore given the length of time that the allegations of dishonesty had been hanging over the solicitors, it was time that a line was drawn the matter. The Law Society’s appeal was therefore dismissed.

Appearances: Gregory Treverton-Jones QC and Fenella Morris (Penningtons solicitors LLP) for the Law Society; Andrew Hopper QC (Hacking Ashton LLP solicitors, Newcastle under Lyme) for the solicitors.

Reported by: Jessica Giles, solicitor.