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Cite as: [2003] 1 WLR 1059, [2003] EWCA Civ 39, [2003] WLR 1059

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Neutral Citation Number: [2003] EWCA Civ 39
Case No: A3/2002/1674


Royal Courts of Justice
London, WC2A 2LL
Friday 24th January 2003

B e f o r e :



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Mr Timothy Dutton QC and Mr Nicholas Peacock (instructed by Wright Son & Pepper) for the Appellant
Mr Philip Engelman and Mr Roger Pezzani (instructed by Teacher Stern & Selby) for the Respondent



Crown Copyright ©

    Lord Justice Carnwath:

  1. On Friday 15th June 2001 the Law Society resolved to intervene in the practice of the claimant under the Solicitors Act 1974. On 26th June the claimant applied to the High Court for an order directing the Law Society to withdraw the Notice of Intervention. No further steps were taken pursuant to that application, until 2nd August when The Law Society applied for summary judgment under CPR Part 24. On 30th August Master Price made an order dismissing the claim. The appeal which was heard by Peter Smith J almost a year later, led to him allowing the appeal on 25th July 2002 and directing that the claim should go to trial. The Law Society now appeals against that order.
  2. In fairness to both the Master and the Judge, I record that, for reasons which have not been satisfactorily explained, the Judge was not given a note of the Master's reasoning, and may therefore have had the impression that it was dealt with more cursorily than was in fact the case. A subsequent note of the judgment, based on solicitors' notes and approved by the Master, has been shown to us, from which it is clear that the matter was fully considered by the Master.
  3. Background

  4. I can take the material facts from the Judge's findings. I do not understand them to be significantly in dispute. I record that Mr Engelman (for Mr Holder) said that his client did not admit dishonesty, although he admitted reasonable grounds to suspect dishonesty. I also note Mr Holder's evidence as to the difficult circumstances of his early life, which led to him being admitted as a solicitor relatively late at the age of 37, and to the problems he experienced thereafter in establishing himself. The judge held:
  5. "9. The Claimant is a solicitor who was admitted to the Roll in 1994. In November 1996 he became a partner with a John Baskin and they practised under the style "Baskin & Co.". The practice was not set up as a true partnership. The Claimant described the structure as "sort of individual within the partnership". Despite the appearance of being in partnership, he stated that they had "separate bank accounts and separate overdraft facilities", although the accounts certified to LS were based on the average of their two branches.
    10. Under the Solicitors Practice Rules 1990 (Practice Rule 13) it is forbidden for a solicitor to be a sole practitioner unless and until he is more than three years qualified. The Claimant in his evidence is describing an arrangement which appears to be designed to circumvent the Rule by an arrangement which, to the outside world and the LS, would appear as a partnership, whereas he and Mr Baskin were, in reality, operating as individual sole traders.
    11. From August 2000 the Claimant practised on his own account.
    12. On 8th June 2001 a Mr A S Becconsall an Investigation Compliance Officer of the OSS (the Office of Supervision of Solicitors) began an inspection into the Claimant's books and accounts. That inspection revealed:-
    (1) That in breach of rules 32 and 33 of the SAR he had not maintained any Client Account records since 31st March 2000 (14 months); nor could he produce client bank account statements and paying-in books (rule 33). The Claimant admits this. The submission by Mr Dutton Q.C. that the absence of an accounting system of itself puts client funds at risk is well made.
    (2) There was an agreed minimum cash shortfall on Client Account at £200,950 comprising £60,000 on the Client Account of SKT Charitable Trust and £140,950 nominally in the Client account of Hilary Simmonds. The Claimant admitted this and that he agreed it with Mr Becconsall at the time of the inspection and in my judgment does not challenge these findings in any credible way.
    (3) The Claimant also told Mr Becconsall that he had withdrawn money from Client Account for his own purposes to reduce his liabilities to moneylenders.
    (4) The Claimant was substantially in debt to two moneylenders, Jack Steinberg £220,000 and George Rothschild £266,000. He would obtain money from them, which he would put into the office or client account, and he would issue post-dated cheques for the amount of the loan paying 2% per month in cash as interest.
    (5) He accepted in statements made to Mr Becconsall his calculation of the Claimant's debts as being £680,000 at least, excluding the Client Accounts shortage of £200,950. The creditors include his professional liability insurers (SIF and St Paul's), VAT, PAYE, Inland Revenue and National Insurance."
  6. The judge also made findings on the reasons for Mr Holder's problems:
  7. "13. The reason for his serious financial problems was that he put himself massively in debt to fringe moneylenders. This he admitted both to Mr Becconsall and in his evidence. In his first witness statement he stated that he became unable to continue any longer, or repay them for some months before the intervention. Further, although he did not believe the lenders monies were client funds (first witness statement paragraph 21) he admits that he signed letters on the headed notepaper which were to be used by the lenders in claims on the Law Society Compensation Fund saying that the monies could fall within the definition of "client monies". The Compensation Fund exists primarily to compensate those who have lost their money i.e. client monies at the hands of dishonest solicitors. A letter falsely describing the monies as clients monies when the Claimant did not believe them to be so, is the LS contended serious dishonesty as it could be used to mislead the Compensation Fund to the advantage of both the Claimant and those from whom he had been borrowing money…."
  8. He rejected Mr Engelman's attempt to challenge this interpretation of the letter. He thought Mr Holder's state of mind was clear from his own evidence. Mr Holder had said (at paragraph 21 to 22 of his first statement):
  9. "In or about latter part of 2000, I could not continue any longer and was unable to pay the two gentleman referred to. I began to receive various threats, which included reporting me to the Law Society. In those circumstances, and not knowing where to turn, and being let down by everyone, I was forced into signing letters, which the gentlemen thought they could use by claiming the funds loaned from the Compensation Fund…. I realised that the end was inevitable and started to wind down the practice. I became considerably depressed, and it was after I had considerably wound down the practice, in order to protect my clients, that I went to (solicitors) with the view to disclose everything to the Law Society."

    He added that there were still some "active client files", and that, if the intervention were set aside, he would have -

    "- financial assistance from my local community whom I have considerably assisted in the past to set me up again".

    However there was, and is, no substantial evidence to support this hope. We were also told that Mr Holder is currently awaiting trial on charges of theft relating to his dealings in May 2001, but that fact cannot of course affect our view of the matter.

  10. Mr Becconsall's findings were set out in a report dated 14th June 2001 to David Middleton, head of the Investigation Enforcement of the Office for the Supervision of Solicitors (OSS). On the following day (Friday 15th) the Chairman of the Compliance and Supervision Committee of The Law Society, acting under delegated powers, resolved to exercise the powers of intervention under Schedule 1 of the Act, to vest the practice monies in the Society and to require the claimant to deliver practice documents to the Society's agent. The stated grounds were under paragraphs 1(1)(a) and (c). The notice was sent by recorded delivery on the 15th June and arrived on Monday, 18th June. Mr Holder first learnt of the intervention on the Friday as a result of a telephone call to Mr Becconsall's office.
  11. The Judge, rightly in my view, concluded that apart from issues under the Human Rights Act, to which I shall come, the intervention of the Law Society was entirely justified. He said:
  12. "34. In the light of the above evidence the following appear to be incontrovertible.
    1. The Claimant was in serious breach of various of the SAC and had been for many months.
    2. He had probably removed a large amount of money from his Client Account. Like Mr Dutton Q.C. I view the letters from the supposed clients attached to his third witness statement with scepticism.
    3. He was involved with moneylenders and had substantial debts to them which led him to make a potentially fraudulent misuse of the Solicitors Compensation Fund.
    4. The Claimant did not dispute in any credible way any of those allegations.
    35. It follows from the above absent a human rights claim, the intervention of the LS was in my judgment entirely justified…"
  13. Before turning to those issues, it is necessary to note a comment made by the Judge about what he thought was the apparent lack of urgency in the exercise of the powers. He said:
  14. "36. I should observe however, that whilst the intervention was made under the Chairman's urgent emergency powers as set out above, the actual intervention did not proceed, so far as I can see, with an urgency that required an immediate intervention. I say that because the LS did not, for example, go to court to bolster the intervention powers. They made no attempt to serve the intervention notice on the day they made the decision; they were content that it be sent in the post. Those matters show that whilst this case is serious, as any intervention by definition must be serious, and whilst there was dishonesty, they did not believe that there was an immediate potential for clients to lose money. The conclusion I draw from their report is that the dishonesty had already been complete and that was the basis for the intervention."

    The statute

  15. The Society's powers of intervention are set out in Schedule 1 to the Solicitors Act 1974. The relevant grounds in this case were reason to suspect dishonesty on the part of a solicitor (para 1(1)(a)) and failure to comply with the accounts rules (para 1(1)(c). Paragraph 6(1) confers the power, by resolution, to provide for the vesting in the Society of money held by the solicitor "in connection with his practice". Such money is, on the making of the resolution, held by the Society "upon trust for the persons beneficially entitled".
  16. The Society is required to serve on the solicitor, and "any other person having possession of" money to which the resolution applies, a certified copy of the resolution, and "a notice prohibiting the payment out of any such sums of money" (para 6(3)). It appears from the evidence of Mr Middleton (unsurprisingly), that the notice on the solicitor is normally served after notice has been served on his bank, thereby effectively freezing his accounts. However, there appears to be no specific evidence that this happened in the present case.
  17. Paragraph 6(4) provides that the person served with a notice may within 8 days of service, on not less than 48 hours' notice, "apply to the High Court for an order directing the Society to withdraw the notice". If the Court makes such an order, it has power "also to make such other order with respect to the matter as it may think fit." (para 6 (5)).
  18. By paragraph 9 the Society may give notice requiring the production or delivery of documents held by the solicitor in connection with his practice. Again there is provision for the solicitor to apply to the Court for re-delivery of the documents (para 9(8)(9)).
  19. Where intervention powers have been exercised on the grounds of suspected dishonesty or breach of accounting rules the exercise of the power operates immediately to suspend any practising certificate of the solicitor for the time being in force (1974 Act s 15(1)(a)). The solicitor may before the certificate expires apply to the Society to terminate the suspension, and if the Society refuses he may appeal to the Master of the Rolls. (s16)
  20. The nature and characteristics of the intervention jurisdiction have been discussed in a number of cases, starting with Buckley v Law Society (No.2) [1984] 3 All ER 313 (Sir Robert Megarry V-C), and most recently in this Court, in Giles v Law Society [1995] 8 Admin LR 105. It has been recognised that it is a "draconian" jurisdiction, necessary to protect the public interest, but balanced by the right to apply to the Court. As Sedley LJ said in Giles:
  21. "The manifest purpose of sch 1 to the Solicitors Act 1974… is to create an ex-parte procedure leading where appropriate to intervention, the consequences of which are undoubtedly drastic and potentially terminal for a solicitor's practice. Where an intervention is persisted with, paragraph 6(4) of sch 1 provides for a solicitor to be heard on an application made within 8 days to the court for an order directing the Law Society to withdraw the notice prohibiting payment out of money held by solicitors save with the leave of the court. Since this is the key intervention power, at least in cases of suspected dishonesty, it is realistic to describe the sub-paragraph as conferring jurisdiction upon the court to direct the Law Society to withdraw from the intervention. On such an application it is for the court to decide whether or not to direct withdrawal on the then material before it….
    … it is by common consent a matter for the court's judgment (I prefer not to use the word discretion in this context) whether it should direct withdrawal – a judgment which may be significantly, though not conclusively, affected by the Law Society's own view of the facts, since on the view taken by the professional body charged with the regulation of solicitors' practices is itself a relevant evidential factor to which the judge not only can but must have regard."
  22. The Court itself conducts "a two-stage process". Its role was summarised by Neuberger J (Dooley v Law Society 15.9.2000):
  23. "First it must decide whether the grounds under paragraph 1 are made out; in this case, primarily, whether there are grounds for suspecting dishonesty. Secondly, if the Court is so satisfied, then it must consider whether in the light of all the evidence before it the intervention should continue. In deciding the second question, the Court must carry out a balancing exercise between the need in the public interest to protect the public from dishonest solicitors and the inevitably very serious consequences to the solicitor if the intervention continues."
  24. Finally, it should not be thought that the protracted progress of the present proceedings is in any way typical. Where necessary the procedure can operate very quickly. By way of illustration, we were referred to one case (Wilson Smith v Law Society, 29th March 1999) where the Judge gave a temporary injunction by telephone on the day before the proposed intervention to enable the matter to be considered in Court the following morning. In another recent case to which I shall return (Wright v Law Society, 4th September 2002), an interim injunction was granted to preserve the position pending the full hearing a few days later. The Judge recorded the speed with which all the parties had worked, including the submission of skeleton arguments by e-mail over the weekend.
  25. The Human Rights issue

  26. Before the Judge it was submitted by Mr Engelman (appearing then as now for Mr Holder) that the intervention power, either generally or as applied in this case, infringed Mr Holder's right to "peaceful enjoyment of his possessions" under Article 1 of the First Protocol to the European Convention on Human Rights, as applied by the Human Rights Act 1998, and that in addition there had been a breach of the claimant's right to a fair hearing under Article 6. As to the latter, the Judge, who as I said did not have a note of the Master's judgment, considered that there had not been a fair hearing on that occasion, but he considered that the right of appeal to him was sufficient to cure any such defect.
  27. As to Article 1, the Judge rejected Mr Engelman's broad submission that "under no circumstances" could the power of intervention be justified, because of its effect in destroying the practice of the solicitor. The Judge said:
  28. "38. For reasons which I will give in this judgment I do not accept Mr Engelman's submission as widely based as it is. It seems to me that balancing the rights of the individual against the rights of the public and the State interest in seeing that the conduct of solicitors is maintained to the highest professional standards of integrity, the power of intervention is a necessary power and the power of itself is not contrary to HRA. However, I do accept an alternative submission that the power can in some cases infringe the right to possession but it is essentially a question of fact and degree in each case.

    Later in his judgment he expanded on what he saw as the "draconian" features of the intervention power:

    "68. The effect of an intervention is admittedly draconian. It seems to me that the effect of the intervention would, in reality, render it at the very least, difficult, if not impossible, for a solicitor to collect outstanding fees and, more importantly, work in progress. In respect of the latter there are undoubtedly cases where solicitors work on an entire fee basis. Conveyancing transactions, for example, are regularly carried out on such a basis. Commercial or business transactions are similarly carried out on the basis of a fee quoted for doing a particular job. The result of an intervention will prevent the solicitor from carrying on the contract. It means that the solicitor will have discharged himself with the result that the solicitor will no longer be able to carry out the duties. He will thus lose his entitlement to a fee and, according to well known principles of entire contracts, would not be able to claim a quantum meruit.
    69. As a matter of practicality it seems to me that the Claimant's evidence as to the difficulties of collection are made out. Whilst Mr Dutton Q.C. said the LS will afford documents, or rather copies of documents, to enable collections to be made, I can well foresee (and this has been my experience in the interventions where I have been involved) that the destruction of the practice causes the clients to be scattered to the winds and the recoverability of monies made virtually impossible."
  29. He then considered whether such effects could be justified under Article 1. He said:
  30. "70. Is that necessary? In some cases it may be necessary because it might be a necessary evil to correct a much greater one. The more interesting question is, is it always necessary? In that case I am not convinced that it can be said that an intervention in the way in which the procedure is currently permitted to be exercised, is always necessary. It follows from that analysis that if the procedure was not necessary in that way, and it resulted in the interference in the right to possession of property, the procedure itself will infringe the Claimant's human rights. I do not see that it can be said that there is no other alternative. If a report for example, is prepared along the lines of the present case there would have been no difficulty in making an appointment at short notice to go to court for an order for an intervention or some lesser order if the court thought that appropriate. There would then be an independent review and the court (like a search order or a freezing order) would act on the evidence. If the evidence was made out, there would be an independent review of the procedure. Intervention in a full blown way might be required on occasions. Alternatively the court might feel a lesser intervention (such as a receiver, a manager) would be appropriate…"
  31. He thought the appointment of a Receiver would have considerable advantages over the intervention procedure:
  32. "71. There are considerable advantages in my view to this process vis-a-vis LS, the SCF and the clients. First, client continuity would not be affected in the same way. Second, the receiver would be able to carry on the practice and attempt to deal with the client's cases. I accept there may be instances where that might not be possible, but an independent receiver would be able to make a rapid assessment as occurs in many other cases of receivership and/or liquidation. Mr Dutton Q.C. suggested that the receivers would be require indemnity form the LS. I am not persuaded as to that. Receivers and managers in the case of insolvency regularly fail to obtain indemnities from their appointers but look usually only to the assets. But even if he is right, that would be deployed by the LS as an argument before the judge to justify an intervention as opposed to a receivership.
    72. Third, a receiver would be in a position to take immediate steps to preserve goodwill and work in progress for the general benefit of the creditors, the LS, the SCF and possibly the Claimant. I do not see any disadvantages in that process save in an exceptional case where the LS feels immediate action is necessary. It seems to me that if a system can operate which has the same, or even better benefits, but has the possibility of preserving property, which would otherwise be destroyed or lost, that leads to two conclusions. First, that is a fairer system. Second, that the present system is not only unfair but is an infringement of the Claimant's human rights."

    Accordingly he concluded:

    79. …On the evidence before me at the moment I cannot conclude that there is no real prospect of the Claimant establishing that his human rights have been infringed. I say that because it seems to me that the procedure in the present case was not necessarily the only way to address the problem. I do not see why a receivership could not have been contemplated as an adjunct to the intervention powers in advance of the intervention or in tandem with the intervention."
  33. The Law Society has been understandably concerned at the implications of the judgment of Peter Smith J for the exercise of its intervention powers. It intervenes in approximately 100 solicitors' practices per year, of which a substantial proportion are cases of suspected dishonesty. Furthermore, it does not consider that the alternative procedure proposed by the judge is in fact available in law, even if otherwise desirable (which it disputes).
  34. More recently, Judge Behrens in Wright v Law Society (see above) declined to follow the reasoning of Peter Smith J. He said:
  35. "The Law Society has to take into account the public interest in deciding whether to exercise its powers of intervention at all. The public interest requires a balance to be struck between the draconian effect of intervention and the matters referred to earlier in this judgment. Second I have considerable doubts about the jurisdiction of the Court to adopt the sort of solution envisaged by Peter Smith J in paragraphs 70 and 71 of his judgment. Intervention in its full form is the statutory remedy entrusted by Parliament to The Law Society in order to regulate the profession. It is not, in view, open to the courts to devise a different and less draconian remedy. I cannot, for my part, see that the Court would have power to appoint a Receiver in an application by The Law Society to determine whether there ought to be an intervention or not.
    Neither counsel were able to point me to any express power in any statute authorising the appointment of a Receiver or the more limited intervention referred to in Peter Smith J's judgment. It seems to me that if such a power is to exist it should be provided for by Parliament."

    The issues in this Court

  36. Mr Dutton QC, for the Law Society, submits that the judge was wrong to find that the intervention procedure raised any issue under the Human Rights Act, and in particular that he was wrong to think that there was an alternative procedure. Mr Engelman, on the other hand, repeats his submission that the intervention procedure itself offends Article 1, and he supports the judge's finding of the possibility of a breach on the facts of this case.
  37. Mr Engelman also makes a submission on Article 6, which I can deal with briefly. He refers to Mr Holder's evidence of the difficulties he had, in June 2001, in obtaining legal assistance, once his accounts had been in effect frozen. Relying on the decision of the European Court of Human Rights in Airey v Ireland [1979] 2 EHRR 305, Mr Engelman submits that his client's lack of means to employ a lawyer meant that his right of access to a court was effectively denied. However, a similar argument was rejected by this Court in the same legal context in Pine v Law Society [2001] EWCA Civ 1574 (15th October 2001). The Vice-Chancellor, referred to Airey, and to its interpretation by the Commission in X v United Kingdom (1984) 6 EHRR 136. He noted that the principle distilled by the Commission from the decision of the Court in Airey was that:
  38. "… only in exceptional circumstances, namely where the withholding of legal aid would make the assertion of a civil claim practically impossible, or where it would lead to obvious unfairness of the proceedings can such a right be invoked by virtue of Article 6(1) of the Convention."
  39. It had been contended for Mr Pine that:
  40. "the possible consequences were so serious for the solicitor that disciplinary proceedings should be placed towards the criminal end of the spectrum of civil proceedings in deciding what is and is not fair … (and) that it was obviously unfair to take and pursue disciplinary proceedings with such immediate and future consequences for the livelihood of a solicitor, particularly where his lack of means stems from the Law Society's own acts in connection with those proceedings, unless at the same time provision is made for the impecunious solicitor to receive legal advice and representation if he wanted it at no expense to himself."
  41. The Vice-Chancellor rejected this submission:
  42. "I do not accept this submission. It is clear from the passage I have quoted from Airey in paragraph 9 above that, at least in proceedings in which a party may appear in person, the requirements of Article 6 with respect to legal advice and representation depend on the facts of any given case."

    Having reviewed the facts of the case he said:

    "The procedure was not complex. The relevant facts were within the knowledge of Mr Pine. Mr Pine was a solicitor experienced in commercial litigation. Mr Pine had ample opportunity to indicate any defences he might wish to advance. In my judgment neither the seriousness of the likely consequences nor the emotional involvement of Mr Pine, which is not apparent from his letters to have been a debilitating factor anyway, when considered in the light of the absence of legal advice or representation, gave rise to any unfairness."
  43. I see no reason to take a different view in this case. Mr Holder was a solicitor who specialised in litigation. He had been closely involved in the investigation, and had fairly admitted most of the relevant facts. There was nothing particularly complex about the issues, and there is no evidence that he would have had any difficulty in understanding them, or presenting his case to the court.
  44. Article 1

  45. Article 1 of the First Protocol to the European Convention on Human Rights is in these terms:
  46. 'Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
    The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.'

    Mr Dutton did not dispute that the intervention involved an interference with Mr Holder's peaceful enjoyment of his possessions; but he of course relied on the public interest justification, which is also emphasised by the English cases on the interpretation of the Solicitors Act.

  47. Mr Engelman referred to the principles laid down by the Strasbourg Court for the application of the public interest test:
  48. "… the Court must determine whether a fair balance was struck between the demands of the general interest of the community and the requirements of the protection of the individual's fundamental rights." (Sporrong and Lonnroth v Sweden (1983) 5 EHRR 35, para 69)
    "There must be a reasonable relationship of proportionality between the means employed and the aim sought to be realised by any measure depriving a person of his possessions." (Holy Monasteries v Greece [1994] EHRR 1 para 4)

    He submitted that if, as the judge found, the more draconian features of the intervention procedure were not "necessary", the requirement of "proportionality" was not satisfied.

  49. With respect to the submission, and to the judge, this approach ignores the "all important" factor, when considering issues of proportionality, of the "margin of appreciation or discretion" or "area of judgment" allowed to the legislator and the decision-maker (see, for example, R (Farrakhan) v Secretary of State [2002] 4 All ER 289, 309; and the review of the principles in International Transport Roth Gmbh v Home Secretary [2002] 3 WLR 344 [2002] EWCA Civ 158). This aspect was not mentioned by the judge, although it was referred to in Mr Engelman's written submissions to him. In paragraph 70 (quoted above) he appears to have approached the matter on the basis that it was for the court to determine what was "necessary" in the public interest, and in doing so to compare other possible procedures devised by the court. In my view, this was fundamentally wrong.
  50. In the present case, the "margin" arises at two stages: first, the discretion allowed to the legislature in establishing the statutory regime, and, secondly, the discretion of the Law Society as the body entrusted with the decision in an individual case. (In the former case, the only remedy for exceeding the "margin" may be a "declaration of incompatibility" under the 1998 Act.) The intervention procedure, now contained in the Solicitors Act 1974, is long-established (dating back to 1941, in its earliest form), and has been reviewed by the court on many occasions. As appears from the cases to which I have referred, it has been recognised as "draconian" in some respects, but necessary for the protection of the public interest; and the courts have repeatedly emphasised the "balancing exercise" which it involves. I see no material difference between this and the "fair balance" which Article 1 requires. Nor do I see any reason why the Human Rights Act 1998 should be thought to have changed anything. There has long been a right of individual petition to the Strasbourg Court for breaches of the Convention, but we have not been referred to any questioning of the intervention procedure under Article 1. I see no arguable grounds for thinking that the margin allowed to the legislature has been crossed, particularly having regard to the deference which is properly paid to an Act of Parliament, as compared to an administrative decision (see the Roth case, above, at paras 26, 83).
  51. Having reached that point, the Law Society's actions must be judged by reference to the procedure laid down by Parliament, not to some hypothetical alternative procedure. This makes it unnecessary to rule on Mr Dutton's submission that the alternative procedure suggested by the judge, involving an application to the court for a receiver, was not in fact available to the Society. He referred to Parker v Camden LBC [1986] Ch 162, where this court held that the wide power to appoint a receiver and manager, under Supreme Court Act 1981, s 37, could not properly be used to supplant the management powers given by Parliament to the housing authority. We do not need to decide whether that case provides guidance as to the availability of that power to support the very different functions of the Law Society. In any event, if the intervention procedure on its own had been found to be non-compliant, it might be necessary, to avoid incompatibility, to "read in" such a power (applying the beneficial interpretation required under the Human Rights Act 1998, s 3).
  52. The Law Society also has a "margin of discretion", but the court has a separate duty to consider the merits of the case, in accordance with the principles I have discussed, while paying due regard, as Sedley LJ said (see Giles above), to the views of the Law Society, as the relevant professional body. As I have said, this meets any "fair balance" requirement. The judge found that, viewed by reference to the Solicitors Act itself, the Society's intervention was "entirely justified". I agree. In my view, that should have led him to have upheld the Society's view as to where the balance lay on the facts of this case.
  53. As I have noted, the judge mentioned the perceived problem of collecting outstanding fees, particularly in relation to work in progress on contracts on "an entire fee basis", and the difficulties of access to documents. Mr Engelman does not claim that Mr Holder in fact had work in progress of this kind, and there is evidence that the Society has been willing to permit supervised access to the documents when required. In my view these are not factors which could possibly affect the overall judgment.
  54. Finally, I should comment on the passage in which the judge suggested that there was no "immediate" urgency, and his reliance on the fact that the Society had been "content" that the notice should be sent by post. The evidence of Mr Middleton, the officer responsible, was as follows:
  55. "Of particular relevance in this context is the substantial amount of money owed to fringe money-lenders, the fact that he is in sole charge of his client account and that substantial sums had already taken from that client account together with his admissions. There was an obvious risk that should further monies be available to Mr Holder in his client account prior to the intervention he might have sought to remove those monies prior to the intervention taking place."

    This was in my view an entirely reasonable assessment. I do not think the judge was justified in reading anything into the fact that notice was served by post to arrive on the Monday, particularly since it was the resolution which led to money vesting in the Law Society; and it would be the notice to the bank (not to the solicitor) which would normally be the most critical step in preventing dissipation.

  56. For these reasons, I would allow the appeal and restore the order of the Master.
  57. Sir Christopher Staughton:

  58. I agree that this appeal should be allowed, on the ground that there was never any prospect of the Law Society's intervention being set aside. The Claimant, a solicitor and sole practitioner, did not keep the accounts which the Law Society required him to keep. There was a deficit on his client account of £200,950; he owed £200,000 and £266,000 to moneylenders; and there were reasonable grounds for suspecting that he had been fraudulent in connection with his practice. If ever there was a case where it was desirable in the public interest that the Law Society should intervene in a solicitor's practice, this was that case. It is the habitual task of solicitors to have in their charge in the course of their practice large sums of their clients' money. They must be honest and reliable people.
  59. In the exercise of its powers of intervention the Law Society must of course comply with the Human Rights Convention. I can imagine circumstances where the Law Society might be found not to have complied with the Convention, or with the Human Rights Act 1998. After all, a solicitor whose practice is the object of an intervention loses his practising certificate, and in all probability his livelihood as well. The provisions for bringing an intervention to an end are very unlikely to restore the solicitor's goodwill and his prosperity. If it comes about that the intervention was mistaken or unjustified, there is a risk that the solicitor will suffer a substantial loss without recourse to any remedy. In practice this may never happen; but it is a cause for concern. However, not in this case.
  60. Lord Justice Aldous:

  61. I also agree.

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