The Law Society of Ireland v Doocey

• Jurisdiction: Ireland
• Judge: Ms. Justice Irvine
• Judgment Date: 02 November 2020
• Neutral Citation: [2020] IEHC 581
• Docket Number: [2020 No. 40 S.A.]
• Court: High Court
• Date: 02 November 2020

IN THE MATTER OF KATHLEEN DOOCEY, A SOLICITOR, PRACTISING AS KM DOOCEY SOLICITORS, AMERICAN STREET, BELMULLET, COUNTY MAYO AND IN THE MATTER OF THE SOLICITORS ACTS 1954 – 2015

BETWEEN

LAW SOCIETY OF IRELEND

APPLICANT

AND

KATHLEEN DOOCEY

RESPONDENT

[2020] IEHC 581

Irvine

[2020 No. 40 S.A.]

THE HIGH COURT

JUDGMENT of Ms. Justice Irvine , President of the High Court, delivered on the 2nd day of November, 2020

1 This judgment concerns an application brought by the Law Society of Ireland (“the Society”) to have the respondent's name struck from the Roll of Solicitors, to have her pay a sum of €10,000 to the compensation fund, to require that she pay an amount of €1,500 as a contribution to the whole of the costs of the Society and that she pay the costs of the within application, such costs to be taxed in default of agreement. The application is brought by the Society pursuant to s. 7(3)(c) of the Solicitors (Amendment) Act 1960 (as substituted by s. 17 of the Solicitors (Amendment) Act 1994 and as amended by s. 9 of the Solicitors (Amendment) Act 2002) and the jurisdiction of the High Court is as provided for in s. 8 of the said Act.

Background

2 The background to the application is set forth in the affidavit sworn on 3rd July 2020 by Ms. Mary Fenelon, a solicitor employed in the Regulatory Legal Services of the applicant, and who is responsible for prosecuting complaints against solicitors.

3 The respondent was admitted and enrolled as a solicitor on 17th February, 2014. She carries on practice as a solicitor under the style and title of K.M. Doocey Solicitors in Belmullet, Co. Mayo.

4 On 23rd July, 2019, the Solicitors Disciplinary Tribunal heard a complaint against the respondent. This arose from an inspection of her accounts which had been initiated by the Society. At that hearing, the respondent made admissions in relation to numerous allegations of misconduct and also admitted that they constituted misconduct. The findings of misconduct are set out at para. 4 of Ms. Fenelon's affidavit wherein she details 24 findings of financial irregularities in breach of obligations under the Solicitors Acts and under the Solicitors Accounts Regulations, These included allowing a deficient in excess of €169,000 to arise on her client account as of 31st December, 2017, in addition to carrying out a significant number of irregular transactions whereby she moved funds between client and business accounts and between client ledgers to conceal shortfalls as they arose. This process is referred to as “teeming and lading” or in more common parlance “borrowing from Peter to pay Paul” and constitutes a serious departure from the Solicitors Accounts Regulations 2014 (particularly Part II) and the standards expected of solicitors in respect of a management and custody of client funds.

5 At paras. 7 and 8 of her affidavit, Ms. Fenlon refers to two previous disciplinary matters concerning the respondent which also related to her breach of the Solicitors Accounts Regulations.

6 The Disciplinary Tribunal, having heard submissions from both parties on 23rd July, 2019, adjourned the hearing until 9th January, 2020, so as to allow the Society's investing accountant, Mr. Michael Costello, review the respondent's practice. Having done so, Mr. Costello prepared a report dated 18th November, 2019, which was later placed before the Disciplinary Tribunal when it reconvened on 9th January, 2020.

7 On 9th January, 2020, the Tribunal heard evidence as to the checks and balances then in place in the respondent's practice to ensure her compliance with the Solicitors Accounts Regulations. The Tribunal heard from Mr. Pat McCosker, an accountant involved in the supervision of the respondent's practice and also from Mr. John O'Dwyer, a solicitor assisting the respondent in a supervisory capacity. The system put in place by the respondent and these two professionals, who were acting (and continue to act) in a supervisory capacity, involves a number of elements which the respondent contends protects the public. Firstly, client receipts are entered by the respondent's office when they are received and lodged to the Bank of Ireland, Belmullet. Any requisitions for client account cheques are sent by the respondent to Mr. McCosker, together with the latest client account statement. Mr. McCosker then remotely logs onto the respondent's bank accounts and ensures the receipts are accurately entered and reviews the details in the client ledger. Mr. McCosker, once so satisfied, then posts the cheque requisition and bill of costs, if applicable and prints off the ledger card after the items are posted to ensure that the client ledger is up to date. Finally, the cheque requisitions, together with a copy of the ledger card are then sent by Mr. McCosker to Mr. O'Dwyer to have the cheques issued, signed by him personally and then posted back to the respondent's office. The cumulative effect of this plan, the Court is told, is that the respondent has no control over the writing of cheques or access to client funds. The respondent contended that the supervision of her conduct by these two professionals is sufficient to rectify the financial mismanagement which had earlier occurred and would protect against any repetition of her prior conduct.

8 I would pause at this point to observe that despite the complexity of the aforementioned scheme, it is hardly as watertight as the respondent would have the Court accept. The very success of the scheme appears to depend on the honesty and integrity of the respondent in the first place (it is not inconceivable that cheques could be dealt with “outside” of this arrangement) and while it may be that cheques processed within the boundaries of this system might be subject to acceptable levels of scrutiny and control, a potential weakness in the system is that the respondent controls which cheques are entered into the system in the first place. That of course depends on the honesty of the respondent.

9 Having heard all of the evidence, the Tribunal decided that it would not recommend that the respondent be struck off but rather that her practising certificate would be issued subject to conditions that it set out in its report. Those conditions proposed a requirement that (i) all cheques issued from the respondent's practice would be signed by a third party solicitor (ii) that no funds would be lodged directly to the solicitor's office account, (iii) that all transfers of funds would first be authorised by Mr. Pat McCosker or another person employed in a supervisory capacity and (iv) if either the supervising solicitor or accountant were to indicate their intention to cease their supervisory function, the applicant would be notified. The Tribunal also recommended that the respondent pay €10,000 to the compensation fund and €1,500 as a contribution to the whole costs of the applicant.

10 The following factors would appear to have persuaded the Tribunal to propose a sanction less than that of a strike off. First the fact that the respondent admitted the acts of misconduct alleged and the fact that they amounted to professional misconduct. Second, that the respondent had made good the deficit in her client account. Third, that her conduct had not resulted in any of her clients incurring financial loss with the result that there had been no call made on the Society's compensation fund. Finally, a cyber attack on the account of one particular client had caused a loss to her practice of the sum of €50,000.

11 Somewhat unusually, the applicant asks this Court not to follow the recommendation of the Disciplinary Tribunal. Instead, it strongly urges the Court to impose the harsher sanction and to strike the respondent from the Roll of Solicitors on the grounds that she is not a fit person to be included thereon. The applicant believes that the extent of the financial irregularities in the respondent's accounts, which show a clear pattern of teeming and lading and which had the effect of concealing a deficit in excess of €169,000, demonstrates a complete disregard by the respondent for her obligations under the Solicitors Acts and the Solicitors Accounts Regulations. The Society contends that the only sanction which would have the effect of protecting the public and maintaining public confidence in the solicitors' profession would be an order striking her name from the Roll, a sanction which it maintains would be both appropriate and proportionate on the particular facts of the case.

The Applicant's Submissions

12 In justifying its application for the imposition of a stronger sanction than that recommended by the Tribunal, the applicant relies upon the fact that the allegations of misconduct have been admitted by the respondent. And, in circumstances where the findings reveal elements of professional dishonesty, must be considered to be at the upper, if not the highest level of professional misconduct. The applicant relies upon the respondent's acts of concealment and deceit combined with her reckless disregard for her responsibilities as a solicitor in relation to clients' monies in support of its position. Furthermore, her conduct comes on the back of a prior disciplinary history in relation to non-compliance with the Solicitors Accounts Regulations.

13 In support of its application, the Society in particular relies upon the decision of the Supreme Court in Re Burke [2001] 4 I.R. 445, in which it was stated that if public confidence in the solicitors' profession is to be maintained, any abuse of that trust must inevitably have serious consequences for the solicitor concerned. The Society points to the fact that the findings in this case are so serious that the respondent herself has proposed that she should only be able to practice in circumstances where she would not have any independent control over or access to either her clients' or her office's money. This, the...