Act: Logan; Gillespie Macandrew LLP

Alt: M.V. Ross; Shepherd & Wedderburn LLP

19 December 2012

[1] In this appeal, brought under section 21 of the Legal Profession and Legal Aid (Scotland) Act 2007 ("the 2007 Act"), the appellants seek to question the decision by the respondents to accept as having been made timeously a complaint brought against Mr Rory Cowan, a principal solicitor with the appellants, by Mr Michael Thrusfield.

The statutory background

[2] Section 2 of the 2007 Act provides:

"2 Receipt of complaints: preliminary steps

(1) Where the Commission receives a complaint by or on behalf of any of the persons mentioned in subsection (2) -

(a) suggesting -

(i) professional misconduct or unsatisfactory professional conduct by a practitioner other than a firm of solicitors or an incorporated practice;

....

it must, subject to subsection (3) and sections 3 and 4 and any provision in rules made under section 32(1) as to eligibility for making complaints, take the preliminary steps mentioned in subsection (4).

(2) The persons are -

(a) as respects a conduct complaint, any person;

...

(4) The preliminary steps are -

(a) to determine whether or not the complaint is frivolous, vexatious or totally without merit;"

Section 4 provides:

"4 Complaint not made timeously or made prematurely

(1) Where a complaint referred to in section 2(1) is not made timeously, the Commission is not to take the preliminary steps referred to in section 2(4) in relation to it, and is not to take any further action under any other provision of this Part (except this section), in relation to it.

...

(3) For the purposes of subsection (1), a complaint is not made timeously where -

(a) rules made under section 32(1) fix time limits for the making of complaints;

(b) the complaint is made after the expiry of the time limit applicable to it;

(c) the Commission does not extend the time limit in accordance with the rules."

[3] Section 32 provides:

"32 Duty of Commission to make rules as to practice and procedure

(1) The Commission must make rules as to its practice and procedure and, as soon as practicable after making or varying those rules, publish them and make them available to the public in a form which is readily accessible.

..."

The respondents' Rules

[4] Rules of the Scottish Legal Complaints Commission 2009 have been made by the respondents under section 32 of the 2007 Act.

Rule 4 provides:

"4 Making a complaint

(1) A complaint is made when it is on an SLCC complaint form registered as received at the office premises of the Commission at a time when those premises are open for business.

...

(6) A complaint will not be accepted (unless the Commission considers that the circumstances are exceptional) if it is made more than 1 year after the professional misconduct, unsatisfactory professional conduct...suggested by it appears to have occurred, ...

(7) In determining whether the period of 1 year mentioned in paragraph (6) has elapsed, there is to be disregarded any time during which the complainer was, in the opinion of the Commission, excusably unaware -

(a) of the professional misconduct, unsatisfactory professional conduct..."

The factual background
[5] In or about May 2007 Mr Rory Cowan of the appellants instructed Mr Michael Thrusfield to provide expert opinion and advice, in the area of veterinary medicine, in connection with a sheriff court action raised by the appellants' clients R & M Paterson against Scottish Agricultural Colleges and another. He estimated his fee for the provision of an initial report at £3,000. He was instructed to provide a further supplementary report. He estimated his fee for that report at £1,000. It is Mr Thrusfield's contention that after receipt of the completed reports Mr Cowan issued further instructions to consider and comment on adjustments and amendments to pleadings, to review opinions provided by experts engaged by the defenders and report his conclusions, and to attend consultations with counsel, and also cited him to appear at the proof which involved numerous court attendances over a four week period. After completion of the case he submitted his fee note in December 2008 to cover all of the work he claimed was instructed by Mr Cowan. The claimed fee was in excess of £35,000.

[6] Mr Cowan acknowledged receipt of the invoice but no payment was initially received. It appears that, following a request from Mr Cowan, Mr Thrusfield was content to allow payment to be deferred for a period in circumstances where it was thought that the sheriff's judgment in the litigation might be the subject of an appeal. In a letter dated 9 July 2010 Mr Cowan wrote to Mr Thrusfield apologising for not dealing with his invoice sooner. He informed Mr Thrusfield that he had sent a copy of the invoice to his clients with his views on it and that he awaited their instructions. Mr Cowan further wrote to Mr Thrusfield on 5 August 2010. He enclosed a cheque in the sum of £4,000 in part settlement. He indicated that he had been awaiting instructions from his clients in relation to the matter and confirmed that there were a number of issues with the fee note. He suggested a meeting to discuss the matter with a view to seeking resolution. By letter dated 1 September 2010 Mr Thrusfield, who in the interim had made some limited concessions, expressed his concern at the drawn-out nature of the matter. Mr Cowan wrote further to Mr Thrusfield by letter dated 13 September 2010. In it he made detailed comments in respect of a number of matters covered by the invoice, and raised a number of questions as to whether a number of the items within it were authorised or justified. He indicated that there were a number of matters on which he wished further information, so that he could assess them and take instructions from his clients regarding settlement. He indicated that he was prepared to recommend settlement at £16,625, less the £4,000 already paid to account. By letter dated 8 October 2010 Mr Thrusfield responded, indicating that he was pleased that matters now seemed to be progressing. He offered detailed responses to the previous letter. He concluded, however, that he could see no reason substantially to modify his invoice and stated that he sought payment, taking account of the £4,000 which had been paid and his own modest adjustments, in the sum of £31,444.35.

[7] Mr Thrusfield further wrote to Mr Cowan by letter dated 2 November 2010, and expressed concerns that he had had no detailed response to his letter of 8 October. He wrote further:

"I am somewhat at a loss to understand the further delay (my understanding being that lawyers are responsible for paying Expert Witness fees), and would therefore be grateful if my account (now nearly two years overdue) is settled."

[8] By letter dated 4 November 2010 Mr Cowan replied to Mr Thrusfield. He wrote:

"I still await instructions from my clients in relation to your account, following your letter of 11 October 2010.

I have issued a further reminder to my clients seeking instructions, and will revert once I have same.

Any responsibility to settle your account rests with the clients, and not their instructed Solicitors."

[9] Thereafter Mr Thrusfield instructed solicitors Martin Gray & Company to act on his behalf. They wrote a letter to Mr Cowan dated 23 November 2010. In it they explained that they had been consulted by Mr Thrusfield and said inter alia:

"Since it is the responsibility of the instructing Solicitor to ensure payment of the fees of expert witnesses please let us have your proposals for settlement of the outstanding account."

They sought an urgent response.

[10] The appellants responded to Martin Gray & Company by letter dated 1 December 2010. In that letter they said inter alia:

"As explained to Mr Thrusfield, we have passed his response to our initial letter dated 13 September 2010 (his response 8 October 2010) to our clients for instructions.

We have requested those instructions on a number of occasions and are continuing to press for them.

Once we have those instructions, we will revert with their position accordingly.

In relation to matters contained in your letter, you will of course be aware that there is absolutely no legal responsibility on this firm to pay Mr Thrusfield's fee.

We were simply Agents acting on and on behalf of the disclosed principal and the legal liability of the settlement of any "Reasonable fees" rests with the Principals".

Notwithstanding there are some consideration (sic) concerns regarding charges listed in Mr Thrusfield's fee note, as detailed in our letter of 13 September. In particular the charging of substantial fees without any discussion or fee authority being sought."

[11] Martin Gray & Company replied by letter dated 8 December 2010. They indicated that they could not agree with the appellants' comments on the question of agency. They expressed their view that the instructing solicitor had a duty to ensure payment of other professionals instructed by him and indicated inter alia that in the circumstances Mr Thrusfield would be perfectly entitled to lodge a complaint if his fee was not paid.

The making of the complaint and its acceptance

[12] By letter dated 3 November 2011 Kenneth F Brown, solicitor, now acting on behalf of Mr Thrusfield, wrote to the respondents enclosing a complaint form signed by Mr Thrusfield, together with his statement and a copy of pertinent correspondence. He indicated inter alia that it appeared to him to be a conduct issue. It is agreed that all of the correspondence referred to above was made available by him to the respondents, apart from the letter from Mr Thrusfield dated 2 November 2010.

[13] The complaint form which was enclosed was signed by Mr Thrusfield on 15 September 2011. Attached to it was a detailed statement of his complaint. He summarised the history until the payment of £4,000. He then wrote (of Mr Cowan):

"Since then, despite numerous requests and demands he has consistently refused to accept any responsibility for payment of the balance of my fees".

and further:

"I understand that there is a well established professional obligation upon an instructing Solicitor to pay the professional fees of experts instructed by him. It is also my understanding that in terms of the Rules of Court a solicitor is responsible for the fees of witnesses whom he has cited.

I consider that in accordance with these obligations Mr Cowan had a duty to ensure that he had in his possession sufficient funds for his client to pay my fees.

In my view Mr Cowan is guilty of misconduct in refusing to implement his professional obligations."

[14] By letter dated 15 November 2011 the respondents wrote to Mr Thrusfield thanking him for his completed complaint form which they acknowledged they had received on 7 November 2011. It is agreed this was the date when the complaint was made in terms of the Rules. Enclosed with the letter was a summary of complaint which Mr Thrusfield was invited to sign. In the summary it was said:

"Having made a payment to account of £4,000, Mr Cowan has subsequently failed to pay the balance of my fees, despite my requesting him to do so, on 22 June, 6 August, 1 September, 8 October, 23 November and 8 December 2010."

By letter dated 9 December 2011 the respondents thanked Mr Thrusfield for returning the signed summary of complaint which, apart from some immaterial changes, was in the same terms as had originally been sent. They explained that the next stage of their complaints process was to assess whether his complaint was eligible for investigation, and that they would have to decide whether the complaint met the criteria set out in sections 2, 3 and 4 of the 2007 Act and so could be accepted.

[15] On 15 December 2011 a representative of the respondents telephoned Mr Cowan of the appellants. She advised him of the complaint which had been received and indicated that on the face of it the complaint was likely to be referred to as a conduct complaint. A note of the telephone call made on behalf of the respondents indicates that Mr Cowan advised that he was aware of the complaint and understood that it might be referred to the Law Society of Scotland, but said that his clients had failed to pay the balance and that it was their responsibility to do so.

[16] By letter dated 22 December 2011 the respondents wrote to Mr Cowan formally intimating receipt of the complaint as summarised in the attached summary of complaint. It was said inter alia:

"Having considered the matter carefully, our decision is that the complaint is an eligible conduct complaint under the criteria set out in sections 2, 3, 4 and 5 of the Act and so the SLCC has accepted it for investigation. It has been forwarded to the Law Society of Scotland to investigate."

On the same date the respondents informed Mr Thrusfield of their decision and formally remitted the complaint to the Law Society of Scotland for them to deal with in accordance with section 6 of the Act.

[17] Although the respondents' letter to Mr Cowan of 22 December 2011 did not provide reasons as to why the respondents had determined that Mr Thrusfield's complaint was an eligible conduct complaint which they had accepted for investigation, and in particular reasons as to why they had decided that it was a complaint which had been made timeously, by letter dated 12 January 2012 they provided Mr Cowan, following a written request from him, with a copy of an internal memo dated 15 November 2011 from the respondents' gateway team manager to the respondents' case officer. In that memo it is said:

"I agree that the complaint appears to have been made outwith our time limits as the alleged conduct (being the failure to pay the balance of the fees in 2010) occurred more than one year before Mr Thrusfield submitted his complaint form on 7 November 2010 (sic). However, it appears that he did not receive any definitive notification from Mr Cowan that he was not prepared to pay the balance until the letter of 1 December 2010. While Mr Cowan outlined why he was not intending to pay the balance in his letter to Mr Thrusfield of 13 September 2010, he does not categorically state he is not going to and instead invited Mr Thrusfield to make further comment. I don't consider, therefore, that the complaint is time barred."

For the purposes of the present appeal the parties were content to proceed on the basis that this memo provided the respondents' reasons for determining that the complaint was timeous.

Discussion

[18] In this appeal the appellants advance essentially two grounds of appeal - (1) that the respondents plainly erred in law in so far as they decided that the complaint was not made more than one year after the alleged professional misconduct or unsatisfactory professional conduct occurred and (2) that there was procedural unfairness in the making of the decision in respect of the failure of the respondents to afford Mr Cowan or the appellants the opportunity to make representations, or to provide further information, before the decision was made. We propose to deal with each of these grounds of appeal in turn.

[19] In support of the first ground of appeal Mr Logan, for the appellants, argued that the central feature of the conduct complained of was simply the alleged failure from June 2010 onwards to pay the balance of the account. That conduct could be said to have occurred long before the critical date for the purposes of the time limit, namely 7 November 2010 (being one year before the complaint was made). Even if that was not right, and the real nature of the conduct complained of was the refusal by Mr Cowan to accept responsibility as instructing solicitor for the payment of Mr Thrusfield's fees, Mr Cowan's position on that had been made entirely plain in the letter of 4 November 2010; a letter which, although not mentioned by the respondents in the memo of 15 November 2011, could not readily be distinguished from the letter of 1 December 2010 on which particular weight had been placed.

[20] Miss Ross for the respondents argued that on the facts before them the decision which the respondents made was one which they were reasonably entitled to make. It was evident that the nature of the conduct complained of was the apparent refusal by Mr Cowan, in circumstances where no payment of the balance was tendered, to accept any responsibility as instructing solicitor therefor. On a fair reading of the correspondence as a whole it was only in the letter of 1 December 2010 that this refusal was made clear. The letter of 4 November 2010 could be distinguished. In particular, in it Mr Cowan still apparently held out the prospect of payment, and that letter, unlike the one of 1 December 2010, was sent to and received by Mr Thrusfield before he obtained any legal representation.

[21] In our opinion it is clear, in the first place, that the essential feature of the conduct complained of in late 2011 (and said to amount to professional misconduct or at least to unsatisfactory professional conduct - about which we make no comment) was indeed the apparent refusal by Mr Cowan of the appellants to accept responsibility as instructing solicitor for payment of the balance of the claimed fees. That may not be readily apparent from the summary of complaint which Mr Thrusfield was invited to sign (and that which he did sign), but it is, we consider, absolutely plain from the terms of the complaint form which was completed by him, and sent by his agents to the respondents on 3 November 2011. It is unnecessary to repeat again the terms of this important document. That this was the nature of the complaint is entirely consistent with the concern expressed by Mr Thrusfield himself in his letter of 2 November 2010, with the fact that he instructed solicitors to act on his behalf as soon as he received the letter of 4 November 2010, and with the terms of the instructed solicitors' letters of 23 November 2010 and 8 December 2010. It seems clear, too, this was understood by Mr Cowan of the appellants when, on 15 December 2011, the respondents telephoned him to tell him of the complaint.

[22] Although counsel for the appellants initially argued that the conduct complained of could properly be seen simply as an alleged failure to pay the balance of the invoice from June 2010 onwards, this was not an argument which, in the event, he strongly pressed. Not only does it fly in the face of the detailed statement of complaint in the form filled in by Mr Thrusfield (and the background circumstances to which we have referred), but it is difficult to see how the stance adopted by Mr Cowan on behalf of the appellants in the correspondence from June 2010 onwards (when, putting it shortly, a number of questions were raised about Mr Thrusfield's entitlement to the balance of claimed fees) could be said to have amounted, of itself, to professional misconduct; a stance which, in any event, could perhaps more readily be said to amount to a course of conduct which was continuing in December 2010.

[23] Given the true nature of the complaint as discussed above, the critical question is whether, on the facts available to the respondents, it was made clear by Mr Cowan prior to 7 November 2010 that he would accept no responsibility as instructing agent for the payment of the balance of the fees. In our opinion that position (of which there were at least indications in all of Mr Cowan's correspondence) was plainly and clearly put in his letter of 4 November 2010. On the face of it the letter of 1 December 2010, which the respondents founded on as providing a "definitive notification from Mr Cowan that he was not prepared to pay the balance", did no more than repeat, albeit a little more fully, that same position. It is not apparent from the respondents' reasons that the true nature of the complaint was properly understood or that the letter of 4 November 2010 was taken into account or, if it was, what was made of it. Despite a careful submission by Miss Ross, we are not persuaded that that letter could readily have been distinguished from the letter of 1 December 2010. In particular, although in the letter of 4 November 2010 Mr Cowan speaks of awaiting instructions from his clients in relation to the account, so too does he in the letter of 1 December 2010. And we are not persuaded that the fact that the letter of 4 November was written to Mr Thrusfield himself, as opposed to his solicitors, could be said to be of any real significance. In these circumstances we conclude that in reaching their decision that the relevant complaint was not out of time the respondents erred in law. They failed properly to understand the true nature of the complaint, and failed to take account of the letter of 4 November 2010. If they did not so fail, the decision was not one which could be said to have been reasonably open to them on, or supported by, the information before them. The appeal therefore falls to be allowed, and the respondents' decision, reported in their letter of 22 December 2011 to Mr Cowan, to accept for investigation Mr Thrusfield's complaint as an eligible conduct complaint under inter alia sections 2 and 4 of the Act falls to be quashed.

[24] We would only add that although Miss Ross at one point raised the question of whether the fact that the letter of 4 November 2010 was sent, not to a solicitor, but to a layman (who might not be expected to appreciate so readily if professional misconduct or unsatisfactory professional conduct had occurred), might perhaps be said to have prevented time running under Rule 4(7) until at least a solicitor was consulted, this, as she accepted, was not a matter addressed at any stage by the respondents themselves. Further it is not obviously an argument available in terms of the Rules which, on the face of it, refer only to excusable ignorance of the occurrence of the relevant conduct. In any event, it is not an argument open in this case given that it is clear from Mr Thrusfield's letter of 2 November 2010 that his own understanding was that, as he put it, lawyers are responsible for paying expert witness fees.

[25] In light of the decision we have reached on the first ground of appeal it is unnecessary to deal with the appellants' second ground of appeal, in which the issue is raised of alleged procedural unfairness. We would only observe, briefly, that we did not find this ground of appeal obviously persuasive in the circumstances of the case.

[26] Mr Logan's contention, shortly put, was that, while it could not be said that there was a duty on the respondents in every case to give the solicitor complained of the opportunity to make representation, or to provide further information, before they made a decision on the question of whether a complaint had been made within the time limit provided by the Rules, there were nevertheless some cases where such an obligation could be said, as a matter of basic fairness, to arise. These were cases where the information provided (which ordinarily would come only from the complainer) could be said to give rise to a real question as to whether the claim was or was not timeous. The present case could be said to be such a case. Although Mr Cowan had been informed of the making of the complaint, he was not afforded the opportunity to make representations or to provide further information. Brief reference was made to Barrs v British Wool Marketing Board 1957 SC 72; Home Department, ex parte Doody and others [1994] 1 AC 531; Law Society of Scotland v Scottish Legal Complaints Commission 2011 SC 94 and Murnin v Scottish Legal Complaints Commission 2012 SLT 685.

[27] There is, we consider, some force in counsel's contention that there may be cases in which fairness dictates that the solicitor complained of should be afforded the opportunity to make representations, or to provide further information, in respect of a question of whether a complaint has or has not been made within the time limit provided by the Rules. Indeed the respondents themselves, we were informed, have already adopted the practice inter alia of affording the solicitor affected an opportunity to make representation, or to provide further information, where the information available gives rise to real doubt as to whether the complaint is or is not out of time. Be that as it may, we are not persuaded that it can be said that any such obligation arose in the present case, or that a failure to afford Mr Cowan or the appellants the opportunity to make representation, or to provide further information, could be said to have made any material difference. As to the former, the only reasonable interpretation, on the information provided, was, as we have found, that the complaint was not made within the time limit provided for in the Rules. As to the latter, the only information missing was the letter of 2 November 2010, which could not, we consider, be said to have made a material difference.

[28] In the whole circumstances we shall allow the appeal, and quash the decision of the respondents to accept for investigation Mr Thrusfield's claim against Mr Cowan as an eligible claim under sections 2 and 4 of the 2007 Act, all as reported in their letter to Mr Cowan of 22 December 2011. We were informed that the respondents still wish nevertheless to consider the question of whether the circumstances could, in terms of the proviso in Rule 4(6), be said to be exceptional such as to entitle them to accept the complaint, a matter which they have not yet addressed. We shall accordingly, for the avoidance of doubt, specifically remit to them to consider that matter.