SRA defends zero tolerance approach to Dentons AML case

A requirement of ‘seriousness, culpability and reprehensible conduct’ is not part of professional conduct rules or their statutory framework, the Solicitors Regulation Authority told the Court of Appeal today. 

The court was hearing the second day of the appeal by Dentons UK and Middle East LLP of the quashing of a Solicitors Disciplinary Tribunal dismissal of charges of alleged breaches of money laundering regulations from 2013 to 2017.

The firm denied all allegations. The SRA successfully appealed the SDT’s decision in the High Court, which found the firm’s breach was ‘committed in good faith’ but that ‘did not justify’ the dismissal of the allegation. The High Court said the SRA was also entitled to the costs’ of the first tribunal hearing.

In today's hearing, Paul Ozin KC, for the SRA, said: ‘Seriousness plus the familiar mantra of serious reprehensible and culpable…is a somewhat different creature to seriousness simplicitas. The [High Court] judge was right, we say, to find that the natural and ordinary meaning of the provisions, the grammatical meaning, was that there was no such requirement. [There is] no requirement of seriousness plus or indeed seriousness at all. The judge said that in clear terms.’

He told Lord Justice Bean, Lord Justice Jeremy Baker and Lord Justice Zacaroli that the Legal Services Act introduced 'a radical departure from what had gone before'.

When asked if he was saying the threshold changed, Ozin said: ‘The point here is not so much the threshold changed but that there is limited weight that can be placed on common law principles that predate 2007 because the standards were radically reformulated, so the gravitational pull of ancient common law or old common law … has a limited gravitational pull with respect to a wholly new set of standards introduced properly under parliamentary authority by the SRA in pursuit of its regulatory objectives.’

When dealing with professional misconduct, a conclusion that ‘it must incorporate seriousness or seriousness plus test’ would ‘defeat the purpose of standards articulated deliberately to not include seriousness or seriousness plus,’ Ozin said.

He described a seriousness or seriousness plus test as a ‘bar that gets in the way of proper regulation’. In written submissions the SRA said Dentons’ argument that professional conduct rules requiring solicitors to comply with the law is only breached where the law is broken in a manner that is serious, culpable and reprehensible is ‘supported neither by the wording of those rules themselves; nor by the statutory framework under which they are made; nor by the authority of SRA v Leigh Day [2018]…upon which Dentons relies.

‘It is a proposition which, if it holds true, must logically apply to individual solicitors just as it does to firms. So, it leads to the surprising conclusion that a solicitor, as an officer of the court and a member of a profession who is credited to be trusted ‘…to the ends of the earth’…is not under a general professional obligation to abide by the law of the land, but rather, only to refrain from serious criminality.’

Judgment was reserved.