Deputy Chief Legal Ombudsman v Young

In these proceedings the claimant, the Deputy Chief Legal Ombudsman for England and Wales, Mr Gary Garland, ("the ombudsman") requested the court, (i) under s.149(3) of the Legal Services Act 2007 , to inquire into the case of the defendant, Mr Howard Young, a solicitor who practised at one time in the firm of CMG Law in Bolton and later at Stirling Law in Oldham, and (ii) under s.149(4) of the 2007 Act, to "deal with" the defendant for his alleged default on the requirements of a notice issued by the ombudsman under s.147 of the 2007 Act, as if he were in contempt of court. At a hearing on 7 October 2011, having considered all the evidence and submissions on either side, including the defendant's mitigation, I was able to conclude my inquiry into his case. I dealt with him for his default, imposing on him a fine of £5,000, which is to be paid by 4 January 2012, and to pay the ombudsman's costs, in the total sum of £15,550, by 7 December 2011. I now give my full reasons for granting the ombudsman's application.

The ombudsman has had to investigate a complaint about legal services provided by the defendant to Mr and Mrs W. The complaint was made by Mr and Mrs W in October 2010. By the notice he issued under s.147 of the 2007 Act the ombudsman required the defendant to produce specific documents, files and bills, which the ombudsman considered were necessary to enable him to determine the complaint. The defendant failed to comply with that requirement. On 24 January 2011 the ombudsman submitted a report to the Solicitors Regulation Authority ("the SRA") under s.s 143, 145 and 148(2) of the 2007 Act, stating, among other things, that he believed the defendant had failed to comply with the requirements imposed on him by the s.147 notice. The documents required were still not produced. The ombudsman considered the defendant to be a defaulter, as defined by s.149 of the 2007 Act, and duly certified that he had failed not only to provide the information he had been required to provide and to produce the documents he had been required to produce but also to give any good reason or excuse for that failure.

The complaint that had been made against the defendant was described in paras 12-20 of the ombudsman's report:

The ombudsman's report then described the steps which had been taken in the investigation of the complaint.

From the outset, progress was hampered by a persistent lack of response from the defendant to messages and requests in which the ombudsman sought his co-operation. Once the ombudsman had satisfied himself that the complaint fell within his jurisdiction, he tried to get in touch with the defendant. This proved difficult. At this stage the SRA said that it thought CMG Law was still operating and that the defendant still held a valid practising certificate. However, when a member of the ombudsman's staff spoke to a Ms Lord, the practice manager at BYL Law, she said that CMG Law was no longer operating, and that the defendant had worked at BYL Law as a consultant for about four or five weeks but had left on 11 October 2010. Ms Lord also said that the defendant had told BYL Law that he had notified the SRA of what he was doing and that he had told BYL Law he was going to join another firm. The ombudsman's staff also recorded that Mrs W had said that she had been unaware of any of this until she was told it by BYL Law. It seemed clear, however, that the defendant had files belonging to Mr and Mrs W which he had not released.

On 12 November 2010 the ombudsman told the SRA what he was doing and asked the SRA what it was doing about the defendant's activities. The ombudsman decided, however, that Mr and Mrs W's complaint ought still to be dealt with, even though the defendant had now been reported to the regulator. Therefore, on 16 November 2010, the defendant's case was allocated to Ms Caroline Sansoy, an investigator in the Ombudsman's Resolution Centre. Ms Sansoy's task was to investigate the complaint, to obtain the defendant's observations and to get hold of the necessary factual information and documents. If she could, she would help both sides to reach an amicable and informal resolution of the complaint. If this was not possible her task was to prepare a report on her investigation, give both sides an opportunity to make representations, and then submit those representations and her report to the ombudsman. The ombudsman would then be able to make a decision on the complaint. Ms Sansoy needed the relevant papers and preferably the defendant's observations on the complaint if she was to make progress with his case. She discovered that the defendant was now working at Stirling Law at Greengate Business Park in Oldham. She telephoned Stirling Law, and left messages asking the defendant to contact her. The defendant did not respond. On 18 November 2010 Ms Sansoy sent a message to the e-mail address which had been given to her by Stirling Law, marking it for the attention of the defendant and asking him to get in touch with her. In her e-mail she explained who she was and what she was doing. Again the defendant did not respond. On 30 November 2010 Ms Sansoy tried again to get in touch with the defendant, both by telephone and by sending another e-mail to Stirling Law. This time she used a personal e-mail address for the defendant. Again she received no response. On 8 December 2010 Ms Sansoy spoke to a member of Stirling Law's staff, requesting that the defendant call her back without delay. She asked whether the defendant had taken Mr and Mrs W's file with him from CMG Law to Stirling Law, but the person she spoke to could not answer that question. No return call came from the defendant. On 14 December 2010 Ms Sansoy sent a letter to the defendant reminding him of what he had to do to co-operate with the ombudsman's investigation and asking him to respond within seven days. The defendant did not respond.

On 17 December 2010 the Chief Legal Ombudsman, Mr Adam Sampson, wrote personally to the defendant seeking to impress on him the need to respond and warning him of some of the possible consequences of his continuing to fail to communicate with the ombudsman. On the same day Mr Sampson also wrote to Mr Glynn Willmott, the senior partner of Stirling Law. Although the ombudsman's report said there was no reply to Mr Sampson's letter of 17 December, there was in fact a reply. It came from Mr Willmott in a letter dated 22 December 2010, in which he said that he and the defendant had understood from Mr and Mrs W that their complaint had been withdrawn and that this was why the defendant had not responded sooner. Mr Willmott also said in his letter that the defendant was due to see Mr and Mrs W that day, that Stirling Law expected it to be confirmed that the complaint had been withdrawn, and that they would write to Mr Sampson again after the defendant's meeting. No such letter was ever received by the ombudsman.

On 10 January 2011 Ms Sansoy spoke on the telephone to a receptionist at Stirling Law, leaving a message in which she asked for either the defendant or Mr Willmott to call her back to confirm that the letter of 17 December 2010 had been received and to explain what they intended to do. The receptionist told Ms Sansoy that both the defendant and Mr Willmott were in the office, but that neither was available to speak to her. Neither the defendant nor Mr Willmott returned Ms Sansoy's call. On 11 January 2011 Ms Sansoy sent an e-mail to Mr Willmott. Again she asked Mr Willmott to get in touch with her and reminded him of his responsibilities as the defendant's senior partner. She said, as she obviously believed, that neither Mr Willmott nor the defendant had communicated with the ombudsman. No reply to that e-mail was ever received.

Eventually therefore, on 14 January 2011, the ombudsman issued the s.147 notice, giving the defendant ten days to comply.

The ombudsman's report explains what then happened. The s.147 notice was passed to Mr Rich, the solicitor and general counsel to the Office for Legal Complaints of the Legal Ombudsman. Mr Rich served the notice, together with a letter explaining how serious the situation now was. Both the notice and the letter were attached to an e-mail, marked "High Priority", which explained their importance. The e-mail was sent to the defendant on the day the notice was issued. The e-mail prompted an automated response saying that delivery to the recipient's address was complete but that no notification of delivery had been sent by the destination server. There was nothing, however, to suggest that the e-mail had not been delivered. The ombudsman said in his report that he therefore believed that the s.147 notice had been properly served on the defendant. On the same day Mr Rich also sent a hard copy of his letter and of the s.147 notice to the defendant by first class recorded delivery post. That letter was not returned as undelivered. The ombudsman was therefore satisfied that the s.147 notice had been served on the defendant even if he had not received it by e-mail. The ombudsman said in his report (in para 40) that no response had been received to the s.147 notice or the letter that went with it.

The documents the defendant was required to produce were specified in schedule 1 to the notice. They were:

By the time the ombudsman produced his report of 24 January 2011 the defendant had done nothing at all in response to the notice. The ombudsman concluded his report in this way:

I was told that this application was the first if its kind to have been pursued by the ombudsman.

The application was made in a CPR Pt 8 claim form, lodged in the Administrative Court on 4 April 2011. It was supported by the ombudsman's affidavit of 31 March 2011. In his affidavit the ombudsman described the issues in the case, as he saw them. The defendant had let down Mr and Mrs W, his clients. He had abandoned them, refusing to respond either to them or to the ombudsman to explain what was happening in the two claims he was conducting on their behalf. He had also refused or neglected to release the papers in these cases. As a result of all this Mr and Mrs W believed they had lost an opportunity to bring an employment law claim and had been unable to proceed with a claim on a mortgage protection insurance policy. The ombudsman said that although it might already be too late to rescue either piece of litigation, it was still important for the ombudsman to be able to obtain the files, or as much information about them and their contents as possible, if he was to assess how much damage the defendant's poor service has caused to Mr and Mrs W. Because of the financial pressure on Mr and Mrs W this situation was obviously urgent. The defendant's failures in this case did not appear to be an isolated episode of misconduct. The ombudsman had nine current cases involving complaints against him. The records of the Solicitors Disciplinary Tribunal were also illuminating. The defendant had twice been before the tribunal. The ombudsman set out the detail of those two disciplinary processes. He said that the defendant's disciplinary history showed a persistent pattern of him ignoring his duty to respond to letters until compelled to do so and little if any regard for his professional obligations. Financial penalties, and the threat of them, appeared to have very little effect on him. The ombudsman concluded his affidavit by saying that he was satisfied of all the matters of which he needed to be satisfied under the 2007 Act to certify what he believed to be the defendant's "wilful misconduct" in failing to comply with requests for the documents and information required by the ombudsman. The defendant's conduct was "causing severe prejudice to the two complainants, members of the public who were his clients". The ombudsman asked for "the imposition of sanctions on the defendant to compel him to comply".

The ombudsman thus certified to the court the defendant's default on the s.147 notice. He contended that if, having investigated the case under s.149(3) of the 2007 Act, the court was satisfied that the defendant had failed to comply with a requirement to produce documents and provide information to him without reasonable excuse, it should deal with him under s.149(4) as if he were in contempt of court. The ombudsman went on to say that, if the court were to do that, he would invite it "to make a committal order for [the defendant's] imprisonment for such period as the court thinks just (not exceeding two years), subject to earlier release if [the defendant] purges his contempt by producing the documents and providing the information required".

The ombudsman's application was served on the defendant on 15 April 2011. It was served by a process server, Mr Ross, who later made a witness statement saying that he served the defendant personally at his home in Bolton with a bundle of documents including the claim form and the ombudsman's affidavit, drew his attention to the warning about "contempt of court" in one of the letters he served on him, and pointed out to him the date and time when the ombudsman's application was due to be heard by the court. In a letter dated 14 April 2011, which accompanied the material served on the defendant, Mr Rich warned the defendant of the possible consequences of the ombudsman's application to the court:

The SRA wrote to the defendant on 9 February 2011, requiring an answer from him within 14 days. The SRA received no response to that letter. On 8 April 2011, after these proceedings had been issued, the adjudication panel of the SRA had resolved, under Schedule 1 to the Solicitors Act 1974 , to intervene in CMG Law to protect the interests of clients and beneficiaries. Mr Stuart Farr of Laytons was appointed as the intervention agent and Mr Farr carried out his intervention on 12 April 2011. On 5 May 2011 Mr Farr sent an e-mail to Ms Sansoy, saying that, as part of the intervention process, his firm had recently taken possession of a file relating to criminal proceedings against Mrs W for an offence of blackmail. He added that he had not so far been able to locate any information about a claim in the employment tribunal.

The defendant has twice been the subject of adverse determinations in a professional disciplinary process, in June 2009 and in February 2010. On the first occasion the Solicitors Disciplinary Tribunal had to consider several allegations against him, including that he had failed to respond to correspondence from the SRA, in breach of rule 1(d) of the Solicitors' Practice Rules 1990 , and that he had failed to deal with correspondence from the SRA, in breach of rule 20.03 of the Solicitors' Code of Conduct 2007 . The tribunal found the allegations proved. Mitigation was put forward. The tribunal accepted the defendant's explanation for his misconduct and was satisfied that he had accepted his failures. It imposed a fine of £5,000. On the second occasion the tribunal had to consider allegations similar to those it had found proved on the first occasion, including charges that the defendant failed to deal with the SRA in an open, prompt and co-operative way, contrary to rules 20.02 and 20.03 of the Code. The tribunal upheld those charges. In its decision on penalty and costs it stressed the importance of solicitors co-operating fully with their regulator. More than once the defendant had failed to offer any explanation for his conduct, even after repeated attempts by the regulator to seek his views. This being the defendant's second appearance before it on allegations such as these, the tribunal had considered imposing a period of suspension. However, in the hope that the defendant had now realised the importance of complying strictly with his undertakings and of dealing properly with the SRA, the tribunal decided that the appropriate penalty was a fine of £20,000.

When the case first came before me on 10 May 2010, the defendant was neither present nor represented in court. The ombudsman's position was described by Mr Rich in his affidavit of 6 May 2011, and by Mr Philip Havers QC in brief submissions. Mr Rich said in that affidavit that he had heard nothing from the defendant. I was also told that Mr and Mrs W had by then lost the opportunity to appeal against the decision of the employment tribunal in their case. Although the SRA had by this stage begun to obtain documents from the defendant and CMG Law, the ombudsman had decided to go ahead with his application to the court under s.149 . I decided that the right course to take was not to proceed in the absence of the defendant but to issue a bench warrant, not backed for bail, so that he would be brought before the court and given the opportunity to respond in person to the ombudsman's application.

On 13 May 2011, having by then become aware of the warrant, but before it had been executed, the defendant came to the Administrative Court Office, and then appeared before me in court. So too, at my invitation, did Mr Havers for the ombudsman. Because of the short notice at which he had to appear, Mr Havers understandably did not have the benefit of further instructions but nevertheless did what he could to help the court. At the hearing the defendant produced a letter to the ombudsman, dated 18 April 2011, explaining his position. Mr Havers made it clear that he had not seen that letter before. In it the defendant said that he no longer worked at Stirling Law, that the SRA had intervened in his practice, and that he no longer had access to "any archive or current papers". His current files remained with Stirling Law and his "archive files" were now with Laytons. There were a number of observations about Mr and Mrs W that he wanted to make to correct inaccuracies in the ombudsman's application and supporting evidence:

Having heard what the defendant had to say, I decided to adjourn the hearing of the ombudsman's claim until 27 May 2011, granting the defendant unconditional bail in the meantime, but impressing on him the importance of complying with the order I made. I ordered him to file and serve an affidavit in answer to the claim by 20 May 2011. Any evidence in response was to be produced by the ombudsman by 25 May 2011 and the matter was to be listed for a hearing before me on 27 May 2011. Costs were reserved.

After the hearing on 13 May 2011, the defendant swore an affidavit, dated 23 May 2011, in which he explained the work he had done for Mr and Mrs W. He said that in August 2010 when he was closing CMG Law he moved his caseload to BYL Law. He said that a good deal of confusion had been caused by his move from CMG Law to BYL Law and then, in the end, to Stirling Law. He exhibited to his affidavit a witness statement which he had filed on behalf of Mr W in the employment tribunal on 19 January 2011, setting out the relevant history. He said that Mr and Mrs W made their complaint because they wanted to get hold of the file of papers relating to their employment case. The file was at BYL Law. Therefore, said the defendant, he had no control over it for about three or four weeks. Once it became clear that Mr and Mrs W wanted to carry on instructing him he went to see them. This was sometime in November or early December 2010. The defendant said that he understood from the e-mail sent to him by Ms Sansoy on 30 November 2010 that Ms Sansoy believed that if Mrs W got her file back the complaint would be resolved. He had continued to act for Mr and Mrs W, appearing in the employment tribunal on their behalf in January 2011. On that occasion Mr and Mrs W were penalised for earlier failures to comply with case management orders, failures which had taken place before September 2010. The defendant said that when he first visited Mr and Mrs W at home after his move to Stirling Law he explained to them what had happened, telling them that he was aware of their complaint and that he understood why they had been concerned. He said that he asked them if they wanted to continue to instruct him. They did.

The defendant set out in his affidavit his understanding of the status of Mr and Mrs W's complaint at that time:

In his second affidavit, sworn on 25 May 2011, Mr Rich said that there was no trace of the defendant's letter of 18 April 2011 ever having been received by the ombudsman before it was presented to the court by the defendant at the hearing on 13 May. Mr Rich referred to a letter which he had sent to the defendant on 18 May 2011, in which he reviewed the evidence before the court and invited the defendant to make appropriate concessions and apologies. Mr Rich observed that the defendant seemed now to have accepted that he had been behaving improperly and to be ready to undertake to the court that he would co-operate with the ombudsman in this and the other extant complaints in which he was involved. Mr Rich said that on 23 May 2011 he had spoken to Mr Willmott, who told him that there was indeed a period, from about 4 to 20 January 2011, when there could be a delay in receiving e-mails at Stirling Law, but that, so far as he was aware, no e-mails were lost. Mr Rich contended that the ombudsman's notice must have arrived but that the defendant either did not bother to read it, or disregarded it, or simply failed to respond. Mr Rich dealt with the defendant's suggestion that Mr and Mrs W had withdrawn their complaint, Mr and Mrs W having by then given their own account of their dealings with the defendant in a letter dated 20 May 2011. After speaking to Mr and Mrs W on the telephone on 22 May 2011, Mr Rich understood that the defendant had not been instructed by them in any fresh matters since September 2010 and that although they had allowed the defendant to try to restore the hearing of their case before the employment tribunal, this was because they felt they had no choice but to do so. Mr Rich had also, he said, spoken to Mr Ryan of BYL Law, whose account differed significantly from the one the defendant seemed to have given to Mr and Mrs W. On 20 May 2011 Mr and Mrs W had sent a letter to the ombudsman, contradicting much of what the defendant had said in his letter of 18 April 2011. They described the difficulties they had had to deal with, and were still having to deal with, in trying to retrieve the files in their employment case. They said that they had never indicated they were going to withdraw their complaint against the defendant and that "the only way this would have been done would have been if our files had been returned, which he never did and still hasn't", and that all they had wanted was "to have our files returned so we could move on with our matters …"

Mr Rich set out in his second affidavit what the ombudsman then considered to be the outstanding matters in the investigation:

When, on 27 May 2011, both parties appeared before me again, it seemed that some progress was being made in finding the documents the defendant had so far failed to provide to the ombudsman. The defendant offered the court three undertakings:

What happened after the hearing on 27 May 2011 was described in Mr Rich's third affidavit, sworn on 29 September 2011. After that hearing Mr Rich and his colleagues discussed the defendant's case with Mr Farr. Mr Farr sent Mr Rich an e-mail on 16 June 2011, in which he explained what he had been doing:

When Ms Sansoy had completed her investigation she prepared two reports in which she made her recommendations. These were sent to Mr and Mrs W and the defendant for comment. The case was then put before the ombudsman for a determination. Ms Sansoy concluded that in the employment law claim the defendant had provided Mr and Mrs W with a poor service, but that that had not affected the outcome of their case. No significant papers were still missing. Ms Sansoy recommended that the sum of £500 paid on account should be refunded and that a payment of £250 for "distress and inconvenience" would be the appropriate remedy. On the mortgage protection insurance claim, Ms Sansoy was unable to find any relevant documents and concluded that the documents had been lost or destroyed. She understood, however, that the underlying claim was still alive. Again she concluded that there had been poor service which had caused Mr and Mrs W "a great deal of stress and upset", but she was unable to discern any financial loss. She recommended a compensation payment of £250 for "distress and inconvenience".

On 28 September 2011 the ombudsman made his provisional determinations on those two complaints. On the first complaint the ombudsman's provisional determination said:

On the dispute relating to the mortgage insurance claim, the ombudsman said this in his provisional determination:

Whilst maintaining that "it is clear beyond doubt that the defendant did fail to comply with the requisition served on him in January [2011], and that he made default without a reasonable excuse", Mr Rich acknowledged in his third affidavit that "in so far as the defendant's conduct is to be treated as a contempt of court it has now been purged". The defendant had apologised for it in his affidavit. And enough of the missing information and documents had now emerged to allow the ombudsman to complete the investigation of this complaint. Mr Rich also accepted that after the SRA's intervention on 12 April 2011 none of the relevant papers remained in the defendant's possession. Mr Rich went on to say:

Mr Rich repeated his request on behalf of the ombudsman for some general guidance on the court's likely approach to defaulters such as the defendant and the range of penalties likely to be imposed. Such guidance, said Mr Rich, would "help ensure that due warning could be given to the legal professions, both facilitating the work of the ombudsman and reducing the number future cases that had to be brought before the court".

The matter came back before me, finally, on 7 October 2011. On that occasion I considered the whole of the evidence before the court, including Mr Rich's third affidavit, and heard the submissions of Mr Havers and the defendant, to which I shall refer below.

The regulation of all branches of the legal profession was overhauled by the 2007 Act. The reforms involved the establishment of a new independent complaints handling body, the Office for Legal Complaints. The 2007 Act provides for a scheme, referred to as "the ombudsman scheme", the function of which is to deal with consumer complaints concerning all those who carry out legal activities and are members of bodies and organisations regulated by the Legal Services Board, provided that the "in-house" complaints procedures of the body or organisation in question have first been exhausted. The ombudsman scheme created by the Office for Legal Complaints encompasses the role of the ombudsman. The ombudsman does not investigate allegations of professional misconduct, which continue to be dealt with by the relevant approved regulator, but he does investigate complaints about the provision of legal services. Under the ombudsman scheme, redress may be provided to a complainant by way of payment up to a maximum of £30,000 in compensation but no disciplinary action may be taken against a respondent.

The 2007 Act makes specific provision to enable an ombudsman to obtain documents or information in the course of his investigation of a complaint. s.147 of the 2007 Act provides:

If, by a s.147 notice, an ombudsman has required "an authorised person" to produce documents or to provide information specified in the notice and the "authorised person" has failed to comply with that requirement, s.148(2) requires the ombudsman to give each relevant "authorising body" a report which states that he is of the opinion that the authorised person has failed to comply with the s.147 notice which gives details of the failure. An "authorised person" is defined by s.148(6) as meaning "an authorised person in relation to any activity which is a reserved legal activity". This includes solicitors. s.160 defines "relevant authorising body" as including "(a) an approved regulator by which the person is authorised to carry on an activity which is a reserved legal activity …" The SRA is a relevant authorising body.

s.148(3) of the 2007 Act provides that:

Provision for the enforcement of a requirement to produce documents or provide information under s.147 is made in s.149 :

s.14(1) of the Contempt of Court Act 1981 provides:

Mr Havers identified six issues for the court, the first three being of a general kind and the rest specific to this application. These six issues are: (1) procedure, (2) venue, (3) general approach, (4) whether the court should inquire into the case of the defendant, (5) whether the court should deal with the defendant, and (6) how the court should deal with the defendant.

No procedure for an ombudsman to certify a defaulter's failure to comply with a s.147 notice and to invoke the discretionary powers conferred on the court by s.149(3)(4) is to be found in s.149 , or in any other provision of the 2007 Act. Nor do the CPR prescribe the course to adopt. RSC Ord 52, r 4(1) 3 provides:

Unless a committal application is made in existing proceedings, it must be begun by the issuing of a Part 8 claim form: see paragraph 2.1 of Practice Direction RSC 52 and CCR 29 -Committal Applications, supplementing CPR Sch 1 , RSC Ord 52 and CPR Sch 2 , CCR Ord 29 .

In the absence of any procedural rules specific to the s.149 process, and after discussing procedure with the Administrative Court Office, the ombudsman elected to issue a Part 8 claim form in the Administrative Court. Mr Havers submitted that this seemed to be the most appropriate means of certifying to the court under s.149(2) and asking the court to inquire into a case under s.149(3) . He invited me to approve the ombudsman's decision to proceed in this way. He said that it would help future litigants to have the court's observations on the appropriate procedure.

In my view the Part 8 procedure is, in principle, appropriate for proceedings under s.149 . It must be remembered, however, that this procedure was intended and designed for cases which are not likely to be contentious on the facts: see the note under the heading "Types of claim in which Part 8 procedure may or must be followed" in Civil Procedure 2011 , vol 1, p 358, para 8.1.1. No doubt there will be cases in which the parties cannot agree the facts on which the outcome of a s.149(4) process will turn. Then, if the case went on as a Part 8 claim, the court would be faced with the task of resolving factual disputes on affidavit evidence, and, usually, without hearing witnesses tested by cross-examination. But the Part 8 procedure itself is flexible. Rule 8.1(3) allows the court to order a claim to continue as if the Part 8 procedure had not been used, for example where the claimant had issued a Part 8 claim assuming wrongly that there would be no substantial dispute of fact. In a case such as that the court can order the proceedings to continue as a Part 7 claim, in the appropriate track, and give the directions required. That has not been necessary in this case. The relevant facts, once they emerged, were not controversial. And where dispute did arise it was peripheral to the issues the court has had to determine.

The second question raised by Mr Havers concerned the issuing of the claim in the Administrative Court rather than the Divisional Court-again, it seems, after discussion with the Administrative Court Office. This, Mr Havers submitted, reflects the terms of RSC Ord 52, r 1(4) , which provides:

Mr Havers rightly pointed out that if the procedure followed in this instance is, as the ombudsman suggests, the appropriate one, then paragraph 2.5 of Practice Direction RSC 52 and CCR 29 -Committal Applications, supplementing CPR Sch 1 , RSC Ord 52 and CPR Sch 2 , CCR Ord 29 , will apply. The requirements in paragraph 2.5 include:

The defendant did not make any submissions on this issue.

Practice Direction 54D supplementing CPR Pt 54 now provides that, to facilitate access to justice by enabling cases to be administered and determined in the most appropriate location, the claim form in proceedings in the Administrative Court may be issued either in London or in one of the regional offices of the Administrative Court in Birmingham, Cardiff, Leeds and Manchester unless the claim falls within the excepted classes of claim set out in paragraph 3.1 of the practice direction: see paragraphs 1.2 and 2.1 of the practice direction.

Understandably, the ombudsman wants to be free to issue proceedings in one of the regional offices of the Administrative Court because it will often be much more convenient to do so. In his second affidavit Mr Rich said that in this case there would have been significant savings in costs if it had been clear that such proceedings could have been issued in the Administrative Court in Manchester or Birmingham. Mr Havers therefore invited the court to say that the ombudsman may do this. I accept that he may.

The excepted classes of claim in paragraph 3.1 of the practice direction include (as class (6)) "proceedings relating to the discipline of solicitors". Mr Havers submitted that proceedings in which an ombudsman certifies to the court, under s.149(2) of the 2007 Act, a defaulter's failure to comply with a requirement under s.147 , and calls upon the court to inquire into the case under s.149(3) , do not fall within this class. On the contrary, said Mr Havers, such proceedings are concerned merely with the failure of a person, who happens to be a solicitor, to comply with a requirement under s.147 . The class of case excepted under the practice direction is, he said, concerned with disciplinary proceedings, as such, against solicitors, for example under s.54 of the Solicitors Act 1974 . Those submissions are, I believe, correct.

The defendant made no submissions on this issue.

Since this is the first occasion on which the ombudsman has certified to the court under s.149(2) , Mr Havers asked me to stress in my judgment that a failure without reasonable excuse to comply with a requirement under s.147 is likely to attract the sanction of the court, and to provide some indication of the likely tariff. Behind that submission lies this passage in Mr Rich's second affidavit:

In the observations I made at the hearing on 27 May 2011 I said (in para 12) that each case of this type will necessarily turn on its own facts. I also said that it would not be appropriate to indicate in general terms a likely tariff, but that in proceedings such as these the court would strive to do what it can to make sure that the ombudsman's process is carried out efficiently. It was for this reason that I decided on that occasion to adjourn the proceedings on the undertakings given by the defendant.

However, I see no reason to think that the general principles applying to committal for contempt should not apply to the court's power to commit under s.149 of the 2007 Act. The range of penalties for contempt of court includes immediate imprisonment, as well as the imposition of a fine. Subject to any statute imposing a lesser maximum, the maximum term of imprisonment which can be imposed on a single occasion for a contempt of court is two years: see Villiers v Villiers [1994] 1 WLR 493 . The Court of Appeal has from time to time given guidance on sentencing for contempt in various contexts, for example in Hale v Tanner (Practice Note) [2000] 1 WLR 2377 and in Lomas v Parle (Practice Note) [2004] 1 WLR 1642 . As a general principle, which in my judgment must apply to every case under s.149 of the 2007 Act where the court is contemplating the imprisonment of a defaulter for quasi-contempt, the sentence must bear a reasonable relationship to the maximum sentence of two years. The court has power to suspend an order of committal for such a period and on such terms as it may specify: see Morris v Crown Office [1970] 2 QB 114 , 124, 125, per Lord Denning MR and RSC Ord 52, r 7 . In Harris v Harris [2002] Fam 253, the Court of Appeal held that this is the only power to suspend in such cases, so that the court has to choose between a warrant for immediate execution and a warrant to be suspended. That choice must be exercised at the sentencing hearing; it does not arise again. A judge hearing an application to purge may not suspend a sentence already imposed. In Arlidge, Eady & Smith on Contempt , 3rd ed (2005), para 14-46, it is observed that the decision whether to suspend will generally depend upon whether the court's objective is primarily coercion or punishment, and that suspension is unlikely to be an appropriate course to take if the original order has been complied with by the time of the committal hearing: see Loseby v Newman [1995] 2 FLR 754 . Arlidge, Eady & Smith , para 14-47, also note that a suspended term of imprisonment must itself be for a fixed term, that, in accordance with good sentencing practice, the length of the committal period should be decided without reference to whether or not it is to be suspended, and that the period for which the order is suspended should normally also be fixed. The period of suspension should not be disproportionate to the sentence itself or to the gravity of the conduct which attracts it: see Loseby v Newman [1995] 2 FLR 754 , 757 C-D, per Balcombe LJ. Arlidge, Eady & Smith, para 14-101 say that although it has long been established that the court may impose a fine for criminal contempt, either with or without a sentence of imprisonment, it was at one time not the practice of the civil courts to impose fines for contempt because the aim of punishing contempt was regarded, at least in part, as coercive. They go on to say:

Mr Havers asked me to say in my judgment that a failure without reasonable excuse to comply with a requirement under s.147 of the 2007 Act is likely to attract the sanction of the court. In the observations I made at the hearing on 27 May 2011 I indicated that I saw force in that proposition. At the hearing on 9 October 2011 Mr Havers asked me to endorse it firmly. And I do endorse it. Mr Havers also encouraged me to say that the powers available to the court include imprisonment for up to two years and that the court would not hesitate to impose such a penalty where it is considered to be necessary and appropriate to do so. This I also accept. The spectrum of penalties for defaulters under s.149 of the 2007 Act is neither specified nor circumscribed by the 2007 Act itself; it is, potentially, as wide as is the range of sanctions traditionally imposed for contempt. Undoubtedly there will be cases, though they are likely to be more extreme in their facts than this, in which the court will see no option but to impose a sentence of immediate imprisonment for a failure to comply with a requirement imposed under s.147 of the 2007 Act. There will be cases in which, by the time the court comes to deal with the quasi-contemnor, he has already begun to purge his contempt, or has already succeeded in doing so, and the court is able to conclude that a custodial sentence would be inappropriate or counter-productive. There will be cases in which it will be right to suspend execution of the order for committal. There will be cases too in which the court is not persuaded that a sentence of imprisonment is justified but is persuaded that it would be expedient to impose a fine. The scale of the fine will necessarily vary according to the circumstances. There may even be cases in which it is inexpedient to impose any penalty at all or where the making of an order for costs, either on the standard or on an indemnity basis, is a realistic and adequate sanction on its own: see Arlidge, Eady & Smith , paras 14-134, 14-135, and, for example, LTE Scientific Ltd v Thomas [2005] EWHC 7 (QB) at [105], Richards J. The court will always be sensitive to the facts of the case in hand.

In setting out the following guidance I do not intend to lay down any general rules to be complied with, but to identify at least some of the considerations which seem likely to inform the court's use of its powers under s.149 . This can only be done in the broadest of terms. But with that caveat I offer these five observations.

The first point that I think ought to be made is that the use of the court's power under ss.(3) to inquire into a case and of the power under ss.(4) to deal with a defaulter as if he were a contemnor will generally involve both a punitive and a coercive purpose. But the court must not lose sight of the principle that, when it has before it an application to commit, its immediate concern will be to secure compliance with the order which has been flouted or ignored, but this does not diminish the role of the court in punishing the person guilty of such contempt if punishment is called for: see for example Lloyds TSB Commercial Finance Ltd v Melia [2009] EWHC 1114 (QB). In most cases under s.149 the main object of the exercise, whether under ss.(3) or under ss.(4) or both, will be coercive: to oblige the defaulter to face the nature of his default, its consequences for others, and its potential consequences for him. But the court must also bear in mind the need to ensure that those who have defaulted on the requirements of a s.147 notice are dealt with as if they had been in contempt of court.

Secondly, the extent to which the power to commit as if for contempt under s.149(4) will serve a coercive purpose will always depend on the particular facts. Circumstances will vary widely. In some cases it will be inappropriate or unnecessary to give the defaulter the chance to put right his default. For example, some or all of the documents sought by the ombudsman may have been destroyed or irretrievably lost, or the information requested may no longer be in the defaulter's power to impart. The blame to be laid at the defaulter's door may only be slight; it may, however, be great. He may have a perfectly good excuse for his conduct. He may even prove not to be in default at all. Others, who may be subject to the same or a related s.147 process, may bear some part of the blame for the failure to comply with the ombudsman's request. The underlying complaint may have gone away or may have been resolved. It may have been determined without the documents or information sought by the ombudsman proving important or even necessary to its outcome. ss.(4) does not require the court to deal with the person in default; it merely empowers it to do so. In some circumstances-though these may be rare-the court may conclude that it is not necessary for the defaulter to be dealt with at all.

Thirdly, it should be remembered that the statutory scheme is fashioned to enable the court to deal with a default: a failure to act or to do something adequately or as well as the person responsible for doing it could. The mischief which the legislation is meant to defeat is harm done by omission, not harm done by a positive act. Keeping the statutory purpose in mind will be essential if the court is to make a sound decision under ss.(4) . While there will be some cases in which the default has been so irremediably bad that the court will have no option but to impose the sanction of immediate imprisonment, there will be many in which such a course will be not only disproportionate and unjust but also counter-productive. A defaulter may be the only person capable of remedying his default, for he alone may be able to produce the documents or provide the information the ombudsman has demanded. If this is so, putting him in custody straight away may only prolong his default. But, as I have said, there will be cases in which nothing short of immediate imprisonment will do. In such cases, just as a contemnor may promptly purge his contempt, the defaulter may soon see the good sense of doing what needs to be done to gain his release. Suspending execution of the order of committal may have a similar effect. So too in some cases may the imposition of a fine or the making of an order for costs. Where, by the time of the hearing, the defaulter has already begun to put right his default, or has even managed to do so entirely, the court may take the view that immediate custody is unnecessary or that a financial penalty alone will suffice: see Arlidge, Eady & Smith , para 14-101. In some cases, perhaps a small minority, it may be inappropriate, or inexpedient, to punish the defaulter at all. But the service of a s.147 notice being itself an instrument of last resort, a proven default which comes before the court under s.149 will always be a serious matter. Deterrence is therefore a legitimate-and may well be an important-aspect of the court's exercise of its power under ss.(4) .

Fourthly, therefore, it is clear that the court will need to assemble an adequate picture of the facts before dealing with the defaulter. Where somebody's liberty is potentially at stake it is imperative that the court is able to act on an accurate understanding of what has occurred. The provision for inquiry under ss.(3) enables the court to perform its statutory role in two stages, proceeding to its sanction, if any, for the quasi-contempt once the defaulter has had a fair opportunity to put forward his side of the story, preferably in evidence on oath. What is an adequate picture of the facts in any particular case will be for the court to judge. There may or may not be argument about the facts. Sometimes, as in this case, the facts may be slow to emerge and it will be wise to allow a reasonable time for this to happen. If so, the court will need to set a timetable for its inquiry proceedings, taking care to ensure that the process as whole goes on no longer than it must. A defaulter who has to be dealt with under ss.(4) should be dealt with as soon as the court's inquiry under ss.(3) is complete.

Fifthly, the court will need to be alert to the existence and progress of any related disciplinary proceedings. In principle, however, there should normally be no reason for the court to await the outcome of a parallel disciplinary process before exercising its powers under s.149 . This case illustrates the point. In my judgment, there will be few, if any, cases in which the court should delay a s.149 process until the outcome of disciplinary proceedings is known.

The defendant made no submissions on this issue.

s.149(3) of the 2007 Act provides that where an ombudsman certifies a failure to the court under ss.(2) , the court "may" inquire into the case, not that it "must". Mr Havers submits that, having regard to the history of the case and the defendant's persistent failure to comply with the s.147 notice, this is undoubtedly a case into which the court ought to inquire. At the hearing on 27 May 2011 I noted (in para 6 of my judgment) that the defendant did not appear to dispute that this was a case into which the court should inquire. I also said that it seemed to me clear that this was a case into which, in principle, the court should inquire. The defendant did not seek to dissuade me from that view. I have inquired into his case, as this judgment explains.

s.149(4) of the 2007 Act provides that if the court is satisfied that the defaulter has failed without reasonable excuse to comply with a s.147 notice, it may deal with him as if he were in contempt.

At the hearing on 7 October 2011, Mr Havers maintained his submission that the court ought to deal with the defendant as if he were in contempt of court. Not only had the defendant failed to comply with the ombudsman's s.147 notice, he has also been unable to put forward any reasonable excuse for that failure. He effectively acknowledged this in his affidavit, where he accepted that he "should still have formally replied", despite the fact that he "considered the substantive nature of the complaint had been addressed". Mr Havers said that the defendant had to concede as much; the terms of the s.147 notice made it inevitable. Even if the defendant did think that Mr and Mr W's complaint had been addressed-which, plainly, was not what they themselves thought, and also seems hard to reconcile with the facts set out in Mr Rich's second affidavit-this could not be a reasonable excuse for his failing to comply with the notice. Therefore, submitted Mr Havers, the court should now "deal with" the defendant in the way provided for in s.149(4) -as if he were in contempt of court.

I expressed a provisional view on this issue at the hearing on 27 May 2011 (in paras 7 and 8 of my judgment). I noted (in para 8) that the defendant did not suggest that the court should refrain from dealing with him under its power in s.149(4) of the 2007 Act. Nor did the defendant contend otherwise at the hearing on 7 October 2011. He was right not to do so. This is clearly a case in which the court's jurisdiction under s.149(4) is engaged and ought to be exercised.

Mr Havers submitted that the position here is similar to that which arises where there has been disobedience to an order of the court requiring an act to be done within a specified time. When this happens the relevant order may be enforced by an order of committal under CPR Sch 1 , RSC Ord 52 : see RSC Ord 45, r 5(1)(a) and Civil Procedure 2011 , at pp 2286-2287, vol 1, para sc 52.1.12. Thus Mr Havers drew an analogy with civil contempt. The analogy seems apt. The relevant jurisprudence, seen for example in Steiner Products Ltd v Willy Steiner Ltd [1996] 1 WLR 986 , supports the principle that casual or unintentional disobedience to an order of the court will not usually justify an order of committal, and that such disobedience must be contumacious. However, s.149(4) of the 2007 Act sets out a somewhat different test, which is whether the defaulter had a "reasonable excuse" for failing to comply with the s.147 notice.

When these proceedings began Mr Havers submitted that there were four factors which would justify making an order of committal in this case. In the first place, the defendant is a solicitor and thus an officer of the court. Secondly, his failure to comply with the s.147 notice arose against the background of his repeated failures to respond to inquiries from the ombudsman's investigator, Ms Sansoy, and his failure to respond to his own regulator, the SRA. Thirdly, his refusal to comply with the s.147 notice caused severe prejudice to his former clients, Mr and Mrs W, because, as he must have known, the absence of the relevant documents and information was impeding the ombudsman's investigation of their complaint. And fourthly, his failure to comply with the notice had followed the history of his two appearances before the Solicitors Disciplinary Tribunal, both of which had resulted in his being fined.

In his skeleton argument for the hearing on 7 October 2011 Mr Havers acknowledged that the course I took at the hearing on 27 May 2011 had proved effective, and that the court was therefore now in a position to determine the ombudsman's application. He relied still on the four considerations to which I have referred. He recognised, however, as he had at the hearing on 27 May, that the defendant had seen how serious the situation had become, that he was by then offering to help the ombudsman, and that he had also apologised. Since the hearing on 27 May the information sought by the ombudsman had been provided and enough of the missing documents had been found to enable the ombudsman to complete his investigation of the complaint. Mr Havers also accepted that after the SRA's intervention on 12 April 2011, none of the papers remained in the defendant's possession. As Mr Rich has explained in his third affidavit, the solicitors now instructed by Mr and Mrs W had received the relevant papers, or copies of them, and had been able to provide Mr and Mrs W with the advice they needed. Therefore, said Mr Havers, the ombudsman accepted that if the defendant's conduct is to be treated as a contempt of court, that contempt-or quasi-contempt-had now been purged. This had been accepted by Mr Rich in his third affidavit.

Mr Havers submitted that the defendant had been in default for a period of almost three months, from 24 January 2011, the date by which he had to comply with the s.147 notice, to 12 April 2011, the date on which Mr Farr was able to get hold of the relevant documents from the premises formerly occupied by CMG Law in Bolton. Throughout that period, said Mr Havers, the defendant had access to the documents the ombudsman had requested. This I accept.

As Mr Havers submitted, not only did the defendant fail to comply with the s.147 notice or put forward any reasonable excuse for that failure, but it is clear too that the papers which have now been recovered from him were in his possession and readily available to him when Mr and Mrs W started asking about them in September 2010. They were available to him when the ombudsman's investigation began in November 2010. They were available to him at the offices of the firm for which he was working when the s.147 notice was served on him in January 2011. And they remained available to him until after these proceedings had been begun in April 2011. Had he looked for the relevant insurance documents before all his papers were requisitioned by Mr Farr, it is at least possible that they would have been found and kept. And, as Mr Rich pointed out in his third affidavit, the defendant had ignored several letters, telephone calls and e-mails from the ombudsman, and he had ignored correspondence from the SRA before these proceedings were issued. This had resulted in a waste of time, energy and cost both for the ombudsman and for the SRA, the need for proceedings to be launched, and, not least, distress to Mr and Mrs W. Mr Havers submitted that the defendant's quasi-contempt was only purged on 1 August 2011, when the ombudsman eventually received the original documents. The SRA was proceeding against the defendant, requiring him to answer several allegations made against him before the Solicitors Disciplinary Tribunal. His conduct in this case formed only part of those allegations. The disciplinary proceedings were still running, and the tribunal was likely to take into account whatever order is made by the court on this application. Mr Havers also told me that the defendant has yet to pay anything towards the costs ordered against him at the hearing on 27 May 2011. It is with all those considerations in mind that I was invited to deal with the defendant.

At the hearing on 7 October 2011 I asked Mr Havers whether the ombudsman was agnostic about the appropriate sanction, if any, for the court to impose in this case. Not surprisingly, Mr Havers' answer was that whilst the ombudsman could and should confirm the court's understanding of the sentencing options available to it and provide examples of how the court's sentencing powers had been used in other cases, it would not be appropriate for the ombudsman to suggest, let alone recommend, the imposition of any particular penalty in this case or in any other case like it. In this sense the ombudsman's position is no different from that of the Attorney General when he brings proceedings for contempt of court under RSC Ord 52 , or that of the Director of Public Prosecutions and the Crown Prosecution Service in criminal prosecutions. Quite properly, therefore, Mr Havers went no further than to remind the court that the penalties it may impose in this case are imprisonment for up to two years and a fine. Mr Havers referred to the examples of penalties imposed for civil contempt since 1981 set out in Arlidge, Eady & Smith, Appendix 3. Helpful as this was, none of those cases seem to me to illuminate the approach the court should take when dealing with a defaulter under s.149 of the 2007 Act. In all of them the circumstances and the legal context were very different.

This being the first case of its kind, the defendant has not had the fate of others in his position as a deterrent. In the end, the ombudsman's s.149 application had a salutary effect on him. He was able to point to several mitigating factors for his default, and these were not disputed by the ombudsman. Once he engaged with the ombudsman's investigation he did what he reasonably could to co-operate in it. He apologised for his default; he did not try to minimise or excuse it. His apology was sincere. It was first offered at the hearing on 27 May and was repeated at the hearing on 7 October. I am satisfied too that at no stage was the defendant trying to harm the Ws' interests. The documents the ombudsman was seeking came to light. The investigation went ahead. In the end it was concluded that Mr and Mrs W had suffered no significant loss. The fact remains, however, that the defendant consciously persisted in his default for about 2½ months, apparently ignoring the ombudsman's process entirely. For Mr and Mrs W the delay in their documents being found must have been frustrating, to say the least. The defendant's default was the more serious in the light of his unfortunate disciplinary history, in which a pattern of ignoring correspondence and requests for information is plain.

At the hearing on 7 October, though he candidly acknowledged that he had been in default throughout the period between 24 January and 12 April, the defendant urged me to accept that his default was not compounded by any subsequent failure to purge his quasi-contempt. He urged me to conclude that between 12 April and the hearing on 27 May, and indeed since that hearing, he had done all he reasonably could to help both the ombudsman and Mr Farr. I accept that he did. It seems to me by that, through nobody's fault, the concurrent SRA process made progress in the ombudsman's investigation more difficult. The defendant said that after the SRA had intervened in CMG Law on 12 April, sometime before the hearing on 27 May, he went to Mr Farr's office and told him about each of the files he had. Mr Farr had not yet been able to start work on them. The defendant also said that after the hearing on 27 May he immediately sent an e-mail to Mr Farr offering to go and help him with the files and pointing out that he had given undertakings to the court, but he had received no reply. He could have said he found the papers Mr Farr needed "within hours". He did not accept that the documents were in poor order, as Mr Farr had said in his e-mail to Mr Rich of 16 June 2011. Nor did he understand why it had not been until 1 August that the ombudsman received the original documents. All of this was relevant mitigation, and I took it into account.

The defendant urged me not to deal with him by imposing a custodial sentence but to consider instead a financial penalty. I invited him to tell me about his means: see Arlidge, Eady & Smith , para 14-101. He said his financial situation could fairly be described as "dire" but was improving. He had started in a new job as a legal analyst two weeks ago, on a fixed basic salary of about £2,000 a month net, and with the prospect of a bonus. He hoped eventually to be able to work as a solicitor again. When working as a solicitor he had been able to make about £150,000 a year after tax. He did not resist my making a further order for costs in favour of the ombudsman, summarily assessed at the figure I was given (£4,497). He insisted that the ombudsman's costs would all be paid, and said he could pay them within two months. He did not try to dissuade me from imposing a fine as well as ordering him to pay costs, or from requiring the costs to be paid by a date one month earlier than the deadline set for the fine: see Arlidge, Eady & Smith, paras 14-135, 14-136.

On all the evidence and submissions I received, including the defendant's mitigation, I was able to conclude that this was not a case in which imprisonment was called for, but that a financial penalty was clearly justified. In fixing the level of the fine at £5,000 I had in mind that the defendant was also facing a substantial award of costs against him. In view of what he told me about his means I was satisfied that he will be able to pay both the fine and the ombudsman's costs by the deadlines in the order I made.

The ombudsman's application therefore succeeded. Having inquired into the defendant's case, I dealt with him at the hearing on 7 October 2011 in the way I have described, explaining to him briefly my reasons for doing so. Those reasons are set out and amplified in this judgment.