Solicitor cleared of misconduct over “without prejudice” litigation threat
A senior solicitor has successfully defended disciplinary proceedings brought by the Solicitors Regulation Authority (the “SRA”), in a case regarding the boundaries of acceptable conduct when threatening litigation during settlement negotiations.
The Solicitors Disciplinary Tribunal (the “Tribunal”) dismissed all allegations against Christopher Hutchings, a partner and head of the Entertainment, Marketing and IP department at Hamlins LLP, finding that he had neither made false statements nor made an improper threat of litigation during a telephone call with opposing counsel in October 2018. The decision illustrates how the Tribunal assesses the propriety of settlement tactics, and the weight placed on contemporaneous documentation.
Background
The case arose from a defamation dispute. The Respondent’s client had previously brought libel proceedings against a journalist who had published articles linking the client to a corporate scandal. Those proceedings were settled by consent order.
Shortly afterwards, the journalist published a book that allegedly breached the consent order. The Respondent then had a “without prejudice” telephone call with the journalist’s solicitor, during which he raised the possibility of contempt proceedings for the alleged breach. He also proposed that, as an alternative to those proceedings, the journalist could grant a narrow copyright licence over certain passages from earlier articles to help remove defamatory content republished on third-party websites, in particular in the United States.
The journalist’s solicitor responded to this proposal by commenting that it was unusual and that he would need to seek his client’s instruction. He later accused the Respondent of conduct amounting to blackmail. The journalist subsequently raised a complaint with the SRA on 20 January 2023 (over four years after the events in question), in relation to the threats they believed the Respondent had made. The SRA referred the matter to the Tribunal, alleging that the Respondent had made false and misleading assertions and had improperly threatened litigation, with dishonesty advanced as an aggravating feature.
The allegations
The SRA alleged that the Respondent had:
- made false or misleading statements during the telephone call about the strength of counsel's advice and when his client had learned of the alleged breach; and/ or
- made an improper threat of litigation, where the threat of proceedings was not genuinely contemplated and in fact its primary purpose was to pressure the opposing party into providing a copyright licence.
The SRA also alleged that the conduct in relation to the first allegation was dishonest (albeit dishonesty was not a prerequisite to establishing the alleged failure of the Respondent in respect of Outcome 11.1 of the Solicitor’s Code of Conduct which was in place at the time of the alleged failure (and has since been replaced by the SRA Standards and Regulations in 2019)).
The decision
1. Allegation of false or misleading statements about the strength of counsel’s advice
The SRA’s case relied heavily on the telephone attendance note prepared by the Claimant’s solicitor the day after the call. That note recorded, among other things, that the Respondent had stated that counsel had advised there was “a strong case” for bringing contempt proceedings. However, the note was not a contemporaneous record: it was prepared around 20 hours following the call, after extensive communications between the Claimant and the Claimant’s solicitor regarding strategy. The solicitor gave evidence in which he acknowledged that it was a summary note based on his best recollection rather than a verbatim account taken during or immediately after the call.
By contrast, the Respondent gave evidence that he used a prepared script from the call which was approved by his client, from which he did not deviate, and which he had practised reading before the call. A second colleague who attended the call took a contemporaneous note during the call. That manuscript note contained no reference to a “strong case” or any formulation that could be considered to be words to that effect.
The Tribunal determined the Respondent’s contemporaneous notes were more reliable, finding that the Claimant’s solicitor’s note “was not, and could not have been, a verbatim (or near verbatim) note of what was said on the call”, but was rather a summary of the solicitor’s best recollection. The SRA also sought to rely on additional later correspondence between the parties. However, the Tribunal did not find that these exchanges supported the allegation as put forward by the SRA. Accordingly, the allegation of false statements was found not proved and dismissed.
2. Allegation of improper threat
The SRA contended that the threat of litigation had been contrived solely to leverage the grant of a copyright licence, and contrary to advice from counsel. In deciding whether the Respondent had improperly made a threat of litigation, the Tribunal considered the following three matters:
- whether seeking the copyright license amounted to an improper collateral purpose;
- whether the Respondent’s client had no genuine intention to litigate; and
- the advice of Counsel instructed by the Respondent concerning a threat of litigation alongside seeking a copyright license.
The Tribunal applied the test from Goldsmith v Sperrings [1977] 1 WLR 478 when determining whether the benefit sought (the copyright licence) was “reasonably related” to redress the grievance in question or whether there was an ulterior purpose unrelated to the threatened litigation. In light of the Respondent’s evidence showing that the settled defamatory statements had been republished in a new publication, the Tribunal accepted the Respondent’s case that “the request for the copyright licence was not merely related to the breach, it was inextricably linked to it.” The licence proposal was therefore not an improper collateral purpose.
The Tribunal also rejected the SRA’s argument that the Respondent’s client never genuinely intended to litigate. Although the client was reluctant to pursue proceedings, contemporaneous documents such as amendments to the call script detailed the client’s explicit instructions confirming a willingness and intention to commence contempt proceedings if required. Further research conducted for the Claimant concerning personal service of such proceedings and conversations between the Respondent and the client was evidence, the Tribunal determined, that the Claimant did not have a settled intention not to litigate.
Finally on the matter of counsel’s advice, the Tribunal found that the advice solely related to the open position and how the court might perceive strategy, without reference to the without prejudice discussions. As such, the advice was consistent with the proposal that had been made and was insufficient to establish an improper threat. The second allegation was consequently found not proved and dismissed.
Costs
The Respondent then applied for his costs of approximately £655,000, arguing that the proceedings were not reasonably or properly brought.
The Tribunal declined to make an award for costs, holding that while the allegations ultimately failed in their entirety, the decision to bring proceedings needed to be fundamentally flawed to justify departure from the usual position of no order as to costs. The Tribunal found that the SRA’s decision to bring proceedings was reasonable.
Comment
This decision affirmed that seeking settlement terms that a court could not order is not inherently improper, provided that those terms are reasonably related to the underlying complaint. The Tribunal established that solicitors acting for claimants in legitimate defamation disputes should not be at risk of professional sanction simply because their settlement proposals are creative, outside the norm, or commercially significant, provided those proposals remain reasonably related to the underlying grievance. In examining the threat to bring contempt proceedings, The Respondent’s client’s intention to litigate was considered. The Tribunal drew a distinction between being reluctant to litigate, and a settled intention not to proceed to litigation. Where litigation remains under consideration, even in circumstances where the Claimant may not be keen to proceed, this was not sufficient to show a lack of genuine intention to litigate altogether.
The case also highlights the importance of careful record-keeping and contemporaneous notes. The Respondent’s case was materially assisted by his established practice of preparing scripts for significant calls and having a colleague take contemporaneous notes. These documents proved more reliable than the opposing party's attendance note prepared the following day.
Indeed, the imbalance in respect of the evidence on each side was very striking. The Respondent had a pre-prepared script to which he said he spoke on the telephone call (which was not, it appears, disputed) and a contemporaneous note of the call. The SRA by contrast had only an attendance note made the day after and after the solicitor had taken various steps which could have affected the accuracy of his collection. Moreover, the solicitor’s account was inconsistent with the correspondence between the parties at the time. These differences were crucial to any culpability on the part of the Respondent. In those circumstances, it is surprising that the SRA considered that it was appropriate to proceed with the case and somewhat surprising that the Tribunal did not award the Respondent his costs.
Costs in this case were significant for the solicitor concerned. The starting point for an award of costs in proceedings brought in the SDT is that there should be no order as to costs. To displace that position, a successful Respondent is required to meet a high bar of proving that the SRA had pursued proceedings on a “mistake going to the root of the basis for proceedings” and /or impropriety. One of the arguments raised in favour of departing from the norm and awarding costs was the delay in bringing these proceedings. The original complaint was made some 4 years and 3 months after the telephone conversation complained of and at the hearing witnesses were providing evidence in relation to a call which took place seven years earlier. In SRA v Tsang [2024] EWHC 1150 (KB) (Admin) Eyre J held that “inordinate delay” may support an award of costs in an appropriate case. However, the Tribunal did not make a finding specifically on delay in this case, suggesting delay here was not in the order required under Tsang, and found that the SRA’s decision to bring proceedings was reasonable.
For further information, please email the authors or your usual CMS contact.
This article was co-authored by Alice Robson, Trainee Solicitor at CMS.
