Ms Tsang was accused of failing to advise hundreds of clients about the high risks associated with investing in three property development schemes. The SDT, however, cleared her of the allegation, stating that the SRA’s case was based on nothing more than post-dated extracts from Thomson Reuters’ Practical Law, “unsubstantiated” assumptions about the need for greater protection for foreign clients, and an SRA warning notice on investment schemes that also post-dated the events.

The tribunal stated: “The considerable stress to Ms Tsang, the harm to her practice and the damage to her reputation caused by the proceedings and exacerbated by the [SRA’s] delay, were highly relevant to the issue of costs.”

Ms Tsang, a senior consultant at Davis Blank Furniss, acted for 451 East Asian investors in three ‘fractional’ property development schemes. Although nearly £28 million passed through her firm’s client account, none of the developments were completed. The SRA argued that the deals were essentially commercial and that Ms Tsang’s advice did not sufficiently highlight the limited legal protections for buyers’ funds.

The SDT criticised the SRA for not calling any witnesses and relying on “stereotypical assumptions” about Ms Tsang’s clients being foreigners. It also stated that the principle of res ipsa loquitur, relied upon by the SRA, was inappropriate in this case as it was far from self-evident that the facts pointed only in one direction supporting the SRA’s allegations.

The tribunal stated: “The tribunal had therefore been in no position to assess the practical impact of Ms Tsang’s advice upon her clients.”

The tribunal noted that Ms Tsang met all her clients in Hong Kong, fluently communicated with them in Cantonese, and explained the issues, risks, and red flags in terms they could understand. The SDT found that she had provided “sufficient information… to flag the relevant risks” and had gone as far as reasonably possible under her retainer to outline the wider risks.

The tribunal commented: “As a matter of law, she had not been required to explain the commercial risks faced by her clients if the developments failed and she had not been required to carry out investigative tasks beyond the scope of the retainer, however, she appeared to have done her best to have set out the commercial risks for clients’ benefit.”

The SDT questioned whether the case had been properly brought by the SRA, given the harm to Ms Tsang, the lack of a legal basis for the allegation, the absence of witnesses, and the reliance on post-dated and limited relevance extracts from Thomson Reuters Practical Law.

The tribunal added: “An essential mistake of law on the applicant’s part, as found in the present case, undermined the presumption that the case had been properly brought.”