SRA loses appeal against £75k tribunal costs order

The Solicitors Regulation Authority has failed to overturn a Solicitors Disciplinary Tribunal costs order imposed after a failed prosecution.

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The regulator was ordered to pay costs of £74,950 after allegations against Hon-ying Amie Tsang were dismissed. It did not appeal the outcome but argued the tribunal was wrong to make the costs order.

Tsang, who managed her own firm until closing it in 2018, was alleged to have failed to give advice about the high risks of three property development schemes. The tribunal dismissed the allegations, finding that she had acted reasonably within the terms of her retainer.

Mr Justice Eyre dismissed four grounds of appeal. He found there were ‘good reasons’ for the tribunal to make a costs order against the SRA. Misconduct proceedings against Tsang were brought on a ‘fundamentally flawed basis’ and there had been ‘failings in the conduct of proceedings, including inordinate delay’.

The judge said: ‘Having characterised the delay as inordinate, the tribunal was entitled to proceed on the basis that this meant that the effect on the respondent in terms of stress and the effect on her reputation was, therefore, greater than that which was inherent in the bringing of misconduct proceedings.’

Proceedings not properly brought ‘can be a good reason for the making of a costs order’, even if proceedings brought by the SRA ‘are brought in good faith’.

The judge added: ‘The allegation was dismissed because the tribunal had found that it was fundamentally flawed in law and that the respondent was not required to act other than in the way in which she had acted. The tribunal was entitled to proceed on the footing that the proceedings had been brought on a fundamentally flawed basis.’

Dismissing the appeal, the judge concluded: ‘The tribunal was entitled to make those findings and also entitled to conclude that they combined to amount to a good reason justifying a departure from the normal approach and warranting a costs order. The conclusion reached was well within the bounds of those which the tribunal could properly and reasonably reach.’

Directions will follow in relation to the fifth ground of appeal, in which the SRA disputed the validity of £15,500 of the costs award.


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