No Deference to Unreasoned SDT Sanction Recommendations; Extended Post‑Offence Compliance as a Decisive Mitigant: Suspension-with-Conditions Preferred over Closure (Law Society of Ireland v Lohan)

No Deference to Unreasoned SDT Sanction Recommendations; Extended Post‑Offence Compliance as a Decisive Mitigant: Suspension-with-Conditions Preferred over Closure (Law Society of Ireland v Lohan)

Introduction

This High Court judgment ([2024] IEHC 709) arises from disciplinary proceedings brought by the Law Society of Ireland against solicitor Cormac M. Lohan, following a 2016 regulatory inspection. Of 27 alleged breaches of the Solicitors Accounts Regulations 2014 (SI 516/2014), 18 were ultimately withdrawn. Mr. Lohan admitted nine allegations, and the Solicitors Disciplinary Tribunal (SDT) found professional misconduct on those admissions. Electing not to impose any of the limited sanctions within its own jurisdiction, the SDT recommended that the High Court impose a restricted practising order (effectively closing the solicitor’s practice as a sole practitioner), a €15,000 payment to the Compensation Fund, and €15,000 measured costs.

Two applications came before O’Higgins J.: (1) the Law Society’s application to implement the SDT’s recommended sanctions; and (2) the solicitor’s application to set aside the SDT’s findings and recommendations. The Court heard the matters together, treating the real dispute as whether the SDT’s recommended sanction (closure of the practice via a restricted practising order) was proportionate.

This decision is significant for three reasons:

  • It clarifies that where the SDT recommends a sanction but gives no reasons, the High Court may proceed without affording deference to the recommendation and will independently calibrate sanction.
  • It recognises an extended, audited period of post-offence compliance as a powerful mitigant that can decisively argue against closing a practice.
  • It holds that a respondent’s attempt to resile from admissions undermines mitigation (especially “insight”), but does not automatically tip the balance toward the most severe non-erasure sanctions; a proportionate, conditional alternative (suspension with robust conditions) can still suffice.

Summary of the Judgment

The High Court:

  • Declined to remit the matter to the SDT for reasons (despite the SDT report being unreasoned), given the age of the events (circa 2016) and the need for finality. Instead, the Court exercised its role as ultimate arbiter of sanction, expressly stating it would not accord deference to the SDT recommendation absent reasons.
  • Determined that the proven misconduct lay in the “mid-range” of seriousness: serious and sustained failures in accounts management and regulatory compliance, but without evidence of dishonesty, misappropriation, or deliberate concealment.
  • Found aggravation in prior disciplinary history and the solicitor’s post-SDT affidavits seeking to unwind prior admissions, which undermined insight and contrition.
  • Gave substantial weight to mitigating features, notably: eight years of audited compliance since the 2016 misconduct, introduction of a robust accounting system, withdrawal of many charges (including a headline deficit allegation), absence of client loss or client complaint, and acceptance that strike-off was not in play.
  • Rejected the SDT’s closure recommendation as disproportionate in the circumstances, but imposed a time-limited suspension coupled with stringent, prospective safeguards.

Orders made:

  • Suspension from practice up to 20 March 2025 (twelve months from the Society’s application to court).
  • Conditions for any future return to sole practice: completion of appropriate CPD/training in ethics, accounts management, and compliance to the Law Society’s satisfaction.
  • Enhanced oversight for three years: six‑monthly accountant’s reports confirming satisfactory maintenance of client and office accounts.
  • Proactive cooperation with any Law Society inspections, including access to practice premises, files, and accounts.
  • Provisional view that an existing co‑signatory requirement should remain; parties to be heard on scope.
  • Liberty to the Law Society to re-enter on 72 hours’ notice in the event of breach of conditions.
  • Further submissions to be heard on the recommended €15,000 Compensation Fund payment and €15,000 measured SDT costs.

The Court treated the solicitor’s “appeal” of the SDT’s findings as misconceived (no appeal lies against an SDT recommendation to the High Court in circumstances where the SDT itself imposes no sanction), but addressed both proceedings together to resolve sanction efficiently.

Analysis

1) Precedents Cited and Their Influence

  • Law Society v. Coleman [2018] IESC 71 (Supreme Court)
    Coleman affirms that the High Court is the ultimate arbiter on sanction in solicitor discipline; it is not bound by SDT recommendations. O’Higgins J. applied this core principle and, notably, explained that in the absence of reasons from the SDT, the Court would not afford deference to the recommendation. While Coleman also involved a respondent withdrawing admissions and showing no insight, the Court distinguished Coleman on facts—there, the misconduct included deliberate deception and serious integrity breaches. In Lohan, dishonesty was not established and strike-off was not in play.
  • Law Society v. D’Alton [2019] IEHC 177 (Kelly P.)
    D’Alton sets out the familiar sanction matrix: protection of the public; maintenance of the profession’s reputation; punishment; deterrence; and proportionality. O’Higgins J. expressly applied these principles to balance competing factors—especially proportionality in light of the eight-year compliant period and the absence of client loss.
  • Doocey v. Law Society [2022] IECA 2
    This case (both in the High Court reasoning referenced by O’Higgins J. and in the Court of Appeal outcome) involves upper-end misconduct (systematic “teeming and lading,” concealment of deficits). The Court distinguished Lohan: there was no similar dishonesty or falsification; the present case sits lower in the spectrum (mid-range).
  • Law Society v. Walsh [2023] IEHC 165 (Barniville P.)
    Walsh upheld a limited practice order for long‑running undertakings breaches and non-cooperation. O’Higgins J. found Walsh factually distinct: undertakings are treated with particular severity; the respondent there had a decades-long pattern and a “cavalier attitude.” Lohan involved historic accounts failures since remedied, clean audits for eight years, and no similar undertakings problem.
  • Medical Council v. Murphy (Unreported, High Court, 29 June 1984)
    Finlay P.’s principles (deterrence, general deterrence, protection of the public, and scope for leniency) were cited with approval in Walsh and inform the structure of proportionate, protective sanctions. The Court used these principles to prefer a conditional suspension over closure.
  • People (DPP) v. J.U. [2023] IECA 81
    Though a criminal sentencing case, it was applied by analogy for the proposition that a failure to plead guilty should not be treated as an aggravating factor. O’Higgins J. reasoned that the solicitor’s attempt to resile from admissions limits mitigation (especially “insight” credit), but should not be treated as outright aggravation that automatically escalates to closure.

2) Legal Reasoning

The Court’s reasoning unfolds in four key steps:

  • High Court’s role where SDT gives no reasons
    Rooted in Coleman, the Court emphasised that the High Court must form its own independent view on sanction. Here, because the SDT report did not articulate reasons (e.g., no analysis of baseline seriousness, mitigation, prior findings, or why €15,000 was an appropriate Compensation Fund payment), the Court expressly withheld deference. Although the Court contemplated remitting for reasons, it declined in light of delay (events dating from 2016), and proceeded to decide sanction itself.
  • Calibrating seriousness: mid-range misconduct
    The admitted breaches were serious and sustained: multiple debit balances on client ledgers; profound accounts recording failures; unvouched large client‑to‑office transfers (including €387,000), and contraventions of core regulations (Regs. 7(2), 11(5), 13(1), 25(1), 26(1)). However, there was no finding of dishonesty, no client loss, no Compensation Fund payout, and several more serious charges had been withdrawn (including a headline deficit allegation).
  • Balancing aggravating and mitigating factors
    Aggravating factors included: a substantial prior disciplinary history; the concentration of office transactions through one ledger in the solicitor’s own name (albeit without a finding of deliberate circumvention); and, crucially, post‑SDT affidavits attempting to undo prior admissions, undermining demonstrated “insight.”

    Against that, the Court accorded significant weight to:
    • The long passage of time since the 2016 misconduct without further breach—audited annually (“the crystal ball point”).
    • Remedial action—installation of a computerised Harvest accounts system since 2016.
    • Absence of dishonesty and client loss, and withdrawal of the most serious early charges.
    • Contextual overlap with earlier disciplinary matters that had already attracted sanction in 2017.
  • Proportional outcome: suspension with safeguards instead of closure
    While the solicitor’s post‑SDT volte-face “did not speak well for his judgment” and materially reduced the credit for mitigation, the Court concluded it would be an over‑reaction to close the practice. A time‑limited suspension, coupled with robust, forward‑looking conditions (CPD/training, six‑monthly accountant reports for three years, proactive inspection cooperation, and a continuing co‑signatory regime) was proportionate to protect the public, uphold the profession’s reputation, punish the misconduct, and deter others—without going so far as to end the solicitor’s career as a sole practitioner.

3) Impact and Significance

  • Reason-giving by the SDT now matters even more
    This judgment strongly incentivises the SDT to provide reasoned sanction recommendations. Without reasons, the High Court may withhold deference and re‑calibrate sanction from first principles. In marginal cases, detailed SDT reasons can be influential; absent reasons, they are not.
  • Extended post‑offence compliance can be decisive
    The Court’s “crystal ball point” is notable: where many years have passed with audited compliance and no recurrence, that track record can strongly argue against the necessity of a closure order. Regulators and respondents should expect increased attention to long‑term post‑offence behaviour and systems remediation.
  • Resiling from admissions: mitigation reduced, but closure not automatic
    Attempts to unwind admissions will likely erode the “insight” credit otherwise available for early pleas and cooperation. However, consistent with proportionality (and analogies drawn from J.U.), such conduct should not be treated as categorical aggravation that automatically triggers the most severe sanctions short of strike-off. The totality remains key.
  • Template for proportionate alternatives to closure
    The judgment illustrates a structured, conditional approach to sanctioning mid‑range accounts misconduct: limited suspension plus compliance training; enhanced accountant oversight; proactive inspection duties; and continued co‑signatory controls, with liberty to re-enter for breach. Expect to see this architecture used more frequently where risk can be managed prospectively without closing practices.
  • Procedural lesson for respondents
    There is no free-standing “appeal” from an SDT recommendation where the SDT has not imposed a sanction; the proper forum to contest sanction is the Law Society’s High Court application. Attempts to relitigate admitted findings are misconceived and may backfire by undercutting mitigation.

Complex Concepts Simplified

  • Debit balance on a client ledger
    A client ledger must never go negative: it would imply client money has been used for someone else, or disbursed without funds actually available. Even temporary debit balances are treated seriously because solicitors must be able to return client money immediately.
  • “Teeming and lading”
    A form of rolling funds between client accounts to conceal deficits. It is dishonest, systematic concealment and represents the upper end of accounts misconduct. It was not found in this case.
  • Co‑signatory requirement
    A protective measure requiring a second authorised signature for certain account movements, typically on the client account. It reduces the risk of misuse and increases oversight.
  • Limited practice order (restricted practising certificate)
    A sanction under which a solicitor may not practise as a sole practitioner or partner, but may practise only as an assistant under supervision of a senior solicitor approved by the Law Society. It is a significant restriction, short of strike‑off, and often effectively closes a sole practice.
  • High Court versus SDT powers
    The SDT can impose limited sanctions (e.g., advice, censure, modest payment to the Compensation Fund). For more serious penalties (suspension, restrictions on practice, strike‑off), the SDT refers the matter to the High Court with recommendations. The High Court is the ultimate arbiter and may accept, vary, or reject the recommendations.
  • Compensation Fund payment
    A payment directed to the Law Society’s fund that compensates clients for losses caused by solicitor dishonesty or failure to account. A payment order does not necessarily mean the Fund has paid out for the respondent’s misconduct; it can be used as a punitive-regulatory measure. The Court here has yet to decide whether to order the recommended €15,000 payment.

Conclusion

Law Society of Ireland v Lohan clarifies the High Court’s approach when an SDT sanction recommendation is unreasoned: the Court will make its own evaluation and may withhold deference. It also confirms that, for mid‑range accounting misconduct absent dishonesty or client loss, an extended period of clean, audited practice and proven remediation can be powerfully mitigating—sometimes decisive—against closure orders. Conversely, respondents who resile from admissions risk significantly eroding mitigation and raising questions about insight, though this will not automatically justify the most severe sanctions.

The Court’s final orders—time‑limited suspension coupled with a suite of prospective safeguards and retained supervisory levers—provide a practical template for proportionate regulation where public protection and deterrence can be achieved without ending a sole practitioner’s career. For the SDT, the message is equally clear: reasoned recommendations assist the High Court and will carry weight; absent reasons, deference should not be assumed.

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