Getting too close to the action: how to blind yourself to ethical rules

A, apparently Senior, Partner of Jeffrey Green Russell may have cause to regret his firm-based profile this morning. Having said his, “cases are frequently cited in the official law reports, and in the Rules of the Court” [whatever that means]. He has one more citation to add to the list. Unfortunately it does not suggest that this founder of, “one of the largest and most feared and respected dispute-resolution machines in London’s West End” always handles cases with his, “trademark characteristics …acuity and thoroughness”. Though he may be closer to the mark in pointing out, “his cases are often remarkable for either the high profile of the parties involved, or the legal issues they raise.” This case involved – nominally at least- David Mellor QC PC (once everyone’s favourite Chelsea fan) and there is a good chunk of discussion of privilege and proprietary estoppel. Perhaps after this mauling by a judge Mr Mellor will buy him a burger and sit him down with the SRA Handbook.

The case was heard in in the Central London County Court (PHILIP AFIA V MELLOR And JEMMETT) and was heard by Mr Recorder Monty QC.

…Neither of the Defendants gave evidence. I heard evidence in support of their defence of this claim from Mr Philip Cohen. Mr Cohen is the senior partner of Jeffrey Green Russell (“JGR”), a firm of solicitors which acted for the Defendants throughout the relevant period and has acted for the Defendants in this litigation. ..

…I was extremely troubled by Mr Cohen’s evidence from the outset. After some prevarication, which in my view was not fitting for a solicitor of Mr Cohen’s experience, he accepted that he had not considered the SRA’s Code of Conduct at any stage when acting for the Defendants, providing his several witness statements, and giving oral evidence at trial.

In Chapter 5 of the Code, entitled “Your client and the court”, the Outcomes include, “you do not place yourself in contempt of court”, “you comply with your duties to the Court” and “where relevant, clients are informed of the circumstances in which your duties to the court outweigh your obligations to your client”. The Indicative Behaviours include

“not appearing as an advocate, or acting in litigation, if it is clear that you, or anyone within your firm, will be called as a witness in the matter unless you are satisfied that this will not prejudice your independence as an advocate, or litigator, or the interests of your clients or the interests of justice.”

…Mr Cohen had not considered whether it was appropriate for him to act for the Defendants and to be a witness for them (indeed, to be the sole witness) but maintained that he was satisfied that there was no prejudice to his independence or to his clients or to the interests of justice.

…However, as became clear in cross-examination, Mr Cohen had on two occasions deliberately been untruthful in emails he had written, and there were a number of other ways (which I shall highlight in my findings of fact) in which his oral evidence conflicted with what he had said in his witness statements and in the documents.

With the words Officer of the Court blinking in the sub-conscious of every lawyer reading this page. The point is that Mr Cohen should have ceased acting for the client as soon as it became apparent that he (and only he) could evidence the client’s case: he , his words, his actions and his inactions was the client’s case. The judge went on to anatomise why this would be, but noted early on:

Mr Cohen was far too close to the events which have given rise to this litigation, and took those events far too personally, to have properly been in a position to act for and give evidence on behalf of the Defendants in this case. Mr Cohen’s lack of objectivity has meant that I have had to test his oral and written evidence very carefully against the contemporaneous documents.

In broad terms what happened was Mr Cohen, acting for Mr Mellor and others, was contacted by the rather capable Mr Afia, whom Mr Cohen sought to dissuade from issuing proceedings against his client with what looked like a promise to honour Afia’s claim (subject to separate proceedings from similar shareholders). The problem was Mr Afia had not “complied with the contractually contemplated procedure in the Instrument, but [as Cohen said] we would not wish to take technical points when we have points of substance.” The negotiations slipped between open and without prejudice correspondence, but Mr Afia relied – up to a point at least – upon Mr Cohen’s promise. Mr Cohen, under sudden pressure from a large number of similar (and rather minor) claims from shareholders when the separate proceedings went badly, changed his mind – apparently to get at separate opponents of his client’s who he blamed for causing the grief of hundreds of phone calls to request his clients pay them as guarantors. The Judge thought Mr Cohen’s promise not to take Mr Afia’s technical non-compliance with notice was clear. Mr Cohen disagreed saying he only meant he would meet claims that were properly due and those would not ultimately include claims where notice had not been given.

There are various interesting issues at play here. Promises made behind the wall of without prejudice correspondence may not retain their privilege. Another, not commented on by the judge, was the dynamic here is between a represented and unrepresented party: if Mr Cohen’s promises not to take technicalities had been deliberately opaque, would the judge have allowed him to take advantage of Mr Afia in stating nothing certain had been agreed? The law on proprietary estoppel as set out in the judgment appears to say yes, although the professional duty not to take advantage of a third party might have been brought in. In many ways, Mr Cohen was unlucky to come up against such a persuasive and persistent opponent.

At breaking point came when deluged by calls from other claimants. Mr Cohen – according to the judge – made statements which were not true. He said he had been out of the Country when he had not. And he sought to deflect blame for Mr Afia’s predicament on some of his clients other opponents. Mr Cohen accepted he had sent out “disinformation”:

In a memorable phrase, he said that he was using the shareholders, including Mr Afia, as cannon fodder, hoping that they would turn their anger towards the Partridges [who had written a letter to other shareholders saying they should now claim]. He wanted Mr Afia to believe that he should blame Claude and Frank Partridge for his not being paid out, which but for the Partridge letter would have happened, whereas in fact the truth (according to him) was that Mr Afia’s claim would have been audited and rejected and he would not have received anything in any event. He accepted that he was sending what he called “disinformation” to the Partridges via Mr Afia with the intention of alienating one from the other. He said that he was not proud of all this, but it came at what was for him a very difficult moment.

In fact, Mr Cohen said he had something of a breakdown at this point, which the judge did not accept preferring the more modest, “he was finding everything too much to cope with”.

This to my mind is an unacceptable way for a solicitor to act. It is of course perfectly permissible for a solicitor to fend off potential claims against his clients, so long as he does not misrepresent the true position, and that was what Mr Cohen had done, up until now. What is not permissible is for a solicitor to be untruthful in correspondence in an attempt to deflect a third party from discovering the true position. In my view, the true position was that until receipt of the advice from Mr Tager, there had been no intention to audit Mr Afia’s claim in the sense of checking whether he had served a notice on Amor. Mr Cohen was not being truthful when he said, in his email of 2 June, that the reason why claims had been paid out before was that there was no intention of taking the technical point that claimants had failed to serve notice on Amor. Mr Cohen was using Mr Tager’s advice to imply that previous payments had been made in good faith but in error by the guarantors. That was untrue. The point on serving notice was one which the guarantors never intended to take, particularly in Mr Afia’s case as I have already found. I do, however, accept that once Mr Tager’s advice was received, and in the light of the aggravation caused by the Partridge letter, a decision was made not to pay out to shareholders who had not served a timely notice on Amor. I will return to the implications of that decision later in this judgment.

In a subsequent email he accused the Patridges of issuing false information when they had not. And there was a “disingenuous” presentation of settlements to date to other shareholders. And,

Thirdly, as Mr Cohen accepted in cross-examination it was not his clients’ attitude which had hardened as a result of the Partridge letter, but his own…. Indeed there was no evidence called from the Defendants to show that they had decided or instructed Mr Cohen to take this position and to reject the claim because no notice had been served. …This is to my mind another example of how Mr Cohen was simply too close to and too personally involved in the issues to have been acting for the Defendants in this action.

The judge would not allow this change of mind about who to pay out to where they had made a specific promise to Mr Afia not to take technicalities.

I do not go so far as to hold that Mr Cohen was acting dishonestly, but in my view his actions and his correspondence have the clear stamp of unambiguous impropriety and dishonourable conduct, in circumstances where throughout he well knew that the point on notice would not be taken, and it would be a clear case of an abuse of the without prejudice rule were this material not now to be admitted into evidence.

I do not wish to deconstruct the difference between the judges words earlier in the judgment and here. In one way, what Mr Cohen did was seek to give the best possible interpretation of his actions and words in the negotiation on behalf of his client and himself. As its kindest, the judge found that interpretation was not supported by the evidence. And that he acted where there was a potential conflict of interest. One cannot really advocate and give evidence at the same time; there is less room for manoeuvre – evidence requires truth and advocacy does not.

A question which is of more serious interest is what happens now? If Mr Cohen is not his firm’s COLP there is an interesting conversation to be had. If he is, there is a doubly interesting conversation to be had, but not with himself. What should the SRA expect of a firm that is faced with this kind of finding against one of its members? It is tempting to speculate on how a firm would react if this was an employee rather than a senior partner. What should the firm do? Mr Cohen may wish to fight and clear his name. As the judgment was given in October, they have probably had time enough to decide.  And will the SRA prosecute? I suspect we will not hear for quite some time.

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