Solicitors Regulation Authority Ltd v Khan & Ors

Factual and Procedural Background

The case concerns an appeal against a finding by Leech J that the Defendant had capacity to defend contempt of court proceedings. The Defendant, a former solicitor and sole principal/director of Company A, was subject to intervention by the Solicitors Regulation Authority ("SRA"). The SRA required the Defendant to deliver certain documents ("Listed Items") to an intervention agent, but she failed to comply.

The SRA issued multiple court orders compelling delivery of these documents, which the Defendant and Company A did not comply with. Subsequently, the SRA applied for committal for contempt against the Defendant personally and as director of Company A and another company, Company B. Leech J found the Defendant liable for contempt and sentenced her to imprisonment.

The Defendant appealed the first committal order but only as to the sentence, which was dismissed. After non-compliance with the orders, the full sentence was served. Further orders were made, and another committal application was issued and heard, resulting in findings of contempt against the Defendant and the companies for failing to comply with the orders.

The question of sanction was adjourned pending submissions regarding the Defendant’s capacity to defend the proceedings, based on medical evidence. Leech J rejected the application to reopen liability or adjourn for further evidence, concluding the Defendant had capacity and sentenced her to a further prison term. The Defendant and the companies have since filed appeals and related applications before the Court.

Legal Issues Presented

1. Whether Leech J erred in finding that the Defendant had capacity to defend the contempt proceedings.
2. Whether the criminal test of fitness to plead applies to civil contempt proceedings.
3. Whether the Defendant received a fair trial under Article 6 of the European Convention on Human Rights.
4. Whether the judge was required to warn the Defendant of adverse consequences from exercising the right to silence.
5. Whether permission should be granted to the companies to appeal out of time and to amend their grounds of appeal.
6. Whether the Court has jurisdiction to reconsider or vary a previous decision made on paper without a hearing.

Arguments of the Parties

Appellant's Arguments

• The Defendant contended that Leech J was wrong to find she was fit to plead and had capacity to conduct the proceedings.
• It was argued that the criminal fitness to plead test (Pritchard criteria) should apply or be analogous to contempt proceedings.
• The Defendant submitted that the judge should have adjourned the sanction hearing to obtain further medical evidence or appoint a litigation friend due to doubts about her capacity.
• The Defendant alleged a procedural irregularity in that the judge failed to warn her of adverse inferences from silence.
• The companies sought permission to appeal against their inclusion as respondents liable for costs, arguing it was incorrect to include them as respondents when the SRA had stated otherwise.
• The Defendant applied to set aside or vary the refusal of extension of time to appeal the first committal order.

Respondent's Arguments

• The SRA maintained that the Defendant had capacity and was fit to plead under the Mental Capacity Act 2005 test, which is the applicable standard in civil contempt proceedings.
• The SRA argued that the criminal fitness to plead test does not apply to civil contempt proceedings and that the Defendant’s medical evidence did not meet the balance of probabilities standard to establish incapacity.
• The SRA contended that the judge was entitled to reject the medical evidence supporting incapacity and to proceed without adjournment.
• The SRA submitted that the procedural steps taken, including warnings about adverse inferences, complied with legal requirements.
• The SRA opposed the companies’ late amendment to their grounds of appeal, arguing it was unfair and unsupported by evidence.
• The SRA supported refusal of further reconsideration of the extension of time refusal on procedural grounds.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Masri v Consolidated Contractors Ltd International Co SAL [2011] EWCA Civ 898	Requirement of permission to appeal committal orders; distinction between orders against individuals and companies.	Confirmed that companies cannot be sent to prison and thus require permission to appeal; distinguished orders against individuals and companies.
Director of Serious Fraud Office v O'Brien [2013] UKSC 23	Distinction between civil and criminal contempt based on conduct.	Applied to classify the contempt as civil, thus influencing applicable procedural rules.
R v Pritchard (1836) 7 C & P 303	Common law test of fitness to plead (Pritchard criteria).	Used as a reference point to assess capacity analogously in contempt proceedings.
R v M (John) [2003] EWCA Crim 3452	Refinement of the Pritchard test into six specific capacities required to plead.	Endorsed as an authoritative guide to fitness to plead, used analogously in assessing capacity.
Navigator Equities Ltd v Deripaska [2021] EWCA Civ 1799	Characterisation of contempt proceedings as quasi-criminal for ECHR purposes.	Confirmed that contempt proceedings attract Article 6 protections but remain civil in nature.
Bilta (UK) Ltd (in liquidation) v Tradition Financial Services Ltd [2021] EWCA Civ 21	Principles governing adjournments for medical reasons and fairness considerations.	Applied to assess whether adjournment for further medical evidence was appropriate.
Teinaz v Wandsworth London Borough Council [2002] EWCA Civ 1040	Discretionary power to seek further evidence when there is doubt about litigant's fitness.	Guided the court’s discretion on whether to adjourn for further evidence.
Levy v Carr-Ellis [2012] EWHC 63	Judicial discretion to accept or reject expert evidence.	Supported the court’s evaluation and rejection of medical evidence on capacity.
Griffiths v TUI (UK) Ltd [2023] UKSC 48	Requirement to cross-examine witnesses to challenge evidence in civil trials.	Considered but distinguished as not directly applicable to interlocutory applications.
AIC Ltd v Federal Airports of Nigeria [2022] UKSC 16	Finality principle in litigation and conditions for re-opening judgments.	Applied to uphold finality of Liability Judgment absent real prospect of injustice.
Jelson (Estates) Ltd v Harvey [1983] 1 WLR 1401	Application of criminal rules such as double jeopardy to contempt proceedings.	Confirmed that certain criminal procedural protections apply in civil contempt proceedings.
Moutreuil v Andreewitch [2020] EWCA Civ 382	Duty to warn litigants of right to silence and consequences of exercising it in committal proceedings.	Considered in relation to alleged procedural irregularity in warning about adverse inferences.
Coates v Turner [2023] EWCA Civ 1487	Use and deployment of affidavits in committal proceedings.	Discussed but not pursued on appeal as affidavits had been effectively deployed.
Denton v T H White Ltd [2014] EWCA Civ 906	Test for granting extensions of time and relief from sanctions.	Applied to assess companies’ late appeal and extension requests.
Tibbles v SIG plc [2012] EWCA Civ 518	Criteria for varying or revoking court orders.	Applied to refusal of reconsideration of extension of time refusal.

Court's Reasoning and Analysis

The Court carefully considered the applicable legal tests for capacity in civil contempt proceedings. It distinguished civil contempt from criminal contempt, confirming that the criminal fitness to plead test (Pritchard criteria) does not directly apply, but may serve as a useful analogy in assessing capacity under the Mental Capacity Act 2005 ("the 2005 Act"). The Court held that the statutory test under the 2005 Act governs capacity in these proceedings.

The Court reviewed the medical evidence, particularly expert reports from Dr Gupta diagnosing adjustment disorder and Asperger's syndrome, and concluding the Defendant was unfit to plead. However, Leech J had found these conclusions insufficiently reasoned and inconsistent with the Defendant’s demonstrated conduct, including her preparation of detailed affidavits and active participation in proceedings.

The Court endorsed Leech J’s evaluation that the Defendant had capacity on the balance of probabilities, emphasizing the presumption of capacity under the 2005 Act and the burden on the Defendant to prove incapacity. It found no error in Leech J’s refusal to adjourn for further evidence, given the lack of real prospect that additional evidence would alter the conclusion.

Regarding procedural fairness, the Court found no serious irregularity in the judge’s failure to personally warn the Defendant about adverse inferences from silence, as counsel had given a clear warning in open court. Moreover, the judge did not rely on adverse inferences in reaching findings of liability.

The Court rejected the companies’ late attempt to add a ground of appeal challenging their status as respondents and liability for costs, holding that the delay was substantial, unexplained, and unfair to the Respondent. Permission to amend was refused.

On the application to reconsider refusal of extension of time for the first committal appeal, the Court held that the procedure for reconsideration under CPR r 52.24 does not permit multiple reconsiderations without a hearing, and that the Defendant had no right to further reconsideration or to vary the order. The Court found no basis to overturn the previous refusal.

Holding and Implications

The Court’s final disposition is as follows:

• The main appeal by the Defendant is dismissed. The Court upholds Leech J’s finding that the Defendant had capacity to conduct the contempt proceedings and is fit to plead under the Mental Capacity Act 2005 standard.
• The companies’ appeal is granted permission to appeal on three original grounds and extension of time, but dismissed on the merits. Permission to amend the grounds of appeal to add a fourth ground is refused due to delay and unfairness.
• The Defendant’s application to set aside or vary the refusal of extension of time for the first committal appeal is dismissed.

The decision confirms that the statutory capacity test under the Mental Capacity Act 2005 applies to civil contempt proceedings in the High Court, with the criminal fitness to plead test being only an analogy. It reinforces the principle that capacity must be presumed unless proven otherwise on the balance of probabilities, and that judges may evaluate medical evidence critically in the context of all case material.

The ruling clarifies procedural expectations in contempt proceedings, including the role of warnings about adverse inferences and the appropriate handling of applications for adjournment on medical grounds. The Court’s refusal to reopen liability or grant adjournments absent a real prospect of changed findings underscores the importance of finality in litigation.

No new precedent was established beyond the application of existing legal principles to the facts. The direct effect is the affirmation of the Defendant’s liability for contempt and the companies’ liability for costs, with the appeals dismissed accordingly.