Professional behaviour – is honesty synonymous with integrity?

Integrity trust teamwork
The Court of Appeal decision in Wingate v SRA and SRA v Malins grappled with the meaning of integrity in the context of professional conduct. Most professional codes of conduct contain a requirement to “act with integrity”. The judgment regards that “as a useful shorthand to express the higher standards which society expects from professional persons and which professions expect from their own members”.

For solicitors, the requirement to act with integrity is found at Principle 2 of the Solicitors Regulation Authority’s (SRA’s) Code of Conduct and Principles. But while the meaning of honesty (or, more accurately, dishonesty) has been the subject of extensive judicial consideration – most recently by the Supreme Court in Ivey v Genting (see our previous blog post) – the meaning of integrity and the circumstances in which a person may be found to lack it have featured in the courts less frequently.

What does integrity mean? Is it the same as dishonesty? That was a central issue in the conjoined appeals. The question required clarification because in Malins the judge, Mostyn J, held that lack of integrity was synonymous with dishonesty (and thus integrity and honesty had the same meaning). In Wingate, however, the judge, Holman J, took a different approach, finding that lack of integrity and dishonesty were not synonymous.

The first instance decisions of Holman J and Mostyn J had been handed down before the Supreme Court decision in Ivey, a case which provides a thorough review of the meaning of dishonesty. Ivey settled that the test for dishonesty was that laid down in Barlow Clowes v Eurotrust [2005]. The court must ascertain (subjectively) the actual state of the individual’s knowledge or belief as to the facts and then determine whether his conduct was honest or dishonest by the (objective) standards of ordinary decent people – “what is objectively judged is the standard of behaviour, given any known actual state of mind of the actor as to the facts” (Lord Hughes). That decision made clear that, contrary to the decision in R v Ghosh [1982], in civil cases there is no requirement that the defendant must appreciate that what he has done is, by those standards, dishonest. It is worth noting, however, that in certain areas, including professional regulation, a two-stage ‘objective/subjective’ test has continued to be applied long after Barlow Clowes, although commentators made clear after Ivey that they thought this inconsistent.

The facts of the two cases

In Malins, a solicitor had arranged ATE insurance in relation to pending litigation to cover the adverse costs risk. To recover the ATE premium under any subsequent costs order, it was necessary to serve notice of ATE insurance on the defendant before 1 April 2013. The litigation was settled in 2014 and the solicitor claimed the premium as part of his costs. This was challenged by the opposing party on the basis that the requisite notice had not been sent. Having checked his records and found no trace of a notice, the solicitor proceeded to create a backdated notice and covering letter which he sent to the other side. Subsequently the true state of affairs came to light. The SRA charged him with breaching Principle 2 (and Principle 6, which requires solicitors to behave in a way that “maintains the trust the public places in [the solicitor]). The Solicitors Disciplinary Tribunal (SDT) found the allegations proved but this was reversed on appeal where Mostyn J had found the pleading of the case (some allegations involving dishonesty and others not) confusing given that (broadly speaking) he concluded that dishonesty and lack of integrity had the same meaning, and that in Wingate, Holman J had been wrong to suggest that lack of integrity has a broader meaning than dishonesty. The SRA appealed.

In Wingate, Messrs Wingate and Evans were the partners in a small firm, in which Wingate concentrated on management and Evans did the legal work. The firm ran into financial difficulties. A litigation funder  – the now notorious Axiom – agreed to lend it £900,000. Wingate signed a funding agreement that did not reflect the parties’ true agreement, having been told by Axiom’s representatives that the agreement would later be replaced with a less restrictive one. That never happened. The firm failed to repay the loan and Axiom’s investors suffered losses. The SRA alleged that, in accepting the monies, Wingate and Evans were in breach of Principles 2 and 6. They were acquitted by the SDT in relation to these charges because it was accepted that Wingate genuinely believed that the agreement had been varied and Evans genuinely relied upon Wingate. The SRA appealed. The judge reversed the acquittals, finding a lack of integrity in Wingate’s agreement to the (sham) loan agreement as well as a lack of competence in failing to appreciate the sham agreement, in breach of Principle 6 (maintaining trust in the profession). Evans did not lack integrity but should have read the loan agreement and, in failing to do so, also breached Principle 6. The solicitors appealed.

The outcomes

The Court of Appeal has now held in Wingate that the judge had been entitled to find that Wingate lacked integrity and was manifestly incompetent in signing the loan agreement (which did not represent the loan he thought he was to receive). When looking at the allegations concerning trust in the profession, Principle 6, the Court accepted that Evans could be careless or even negligent without demonstrating manifest incompetence such to fall foul of Principle 6. Although much of the appeal was therefore focussed on Principle 6 (for both solicitors), the argument about integrity, which only concerned Wingate, is its importance. The Court of Appeal accepted that “the distinction between honesty and integrity becomes crucial”.

In Malins, the Court of Appeal allowed the SRA’s appeal having already made clear that in its view Mostyn J was wrong to equate the concepts of honesty and integrity.

The reasoning

The interest in the judgment lies in the Court of Appeal’s findings on the meaning of ‘integrity’. Lord Justice Jackson, giving the leading judgment in his last case before retirement, held that as a matter of common parlance and as a matter of law, integrity is a broader, “more nebulous” concept than honesty. He accepted that integrity was difficult to distil to an “all-purpose comprehensive definition”, but thought it insufficient to say “you can always recognise it, but you can never describe it”. Whether he has succeeded in providing adequate guidance future cases will determine, but he has noted that in the context of professional codes, the term ‘integrity’ was a useful shorthand to express the higher standards which society expects from professional persons and which the professions expect of their own members.  Integrity, he said, connotes adherence to the ethical standards of one’s own profession (echoing the UKFSM decision in Hoodless v FSA, in which it was held that “integrity connotes moral soundness, rectitude and steady adherence to an ethical code”) and, while that did not require professionals to be “paragons of virtue”, the concept of integrity “involves more than mere honesty”.  He clearly felt that the disciplinary tribunal of a professional body was well positioned to determine whether a professional had fallen below the standards of their profession (having specialist knowledge of the profession and its ethical standards and assessing the facts) and accordingly their view should be respected, just as a jury, mixing different members of society, was appropriate to determine guilt in a criminal trial.

In Ivey, the Supreme Court definitively determined the test for dishonesty in both a criminal and civil law context. Since the Court of Appeal is not the highest court in the land, we cannot say that its decisions in Wingate and Malins are definitive as to the meaning of integrity in the context of professional conduct. The position is, however, certainly much clearer; honesty and integrity are different legal beasts and an honest professional can still lack integrity. The suggestion that a solicitor could say he acted foolishly but with integrity was expressly rejected – even though the same argument might have worked for a member of the public.

Although there is a reference to a professional’s integrity being “linked to the manner in which that particular profession professes to serve the public”, which may in future allow some arguments about the boundaries of private and professional behaviours, the reality of the judgment is that professionals are expected to act with integrity at all times – “The underlying rationale is that the professions have a privileged and trusted role in society. In return they are required to live up to their own professional standards”.   

Ben Ogden