Our local representatives of the Law Society’s Council in Devon and Somerset are reporting to us their inability to criticise the Solicitors Regulation Authority. This is because of the Internal Governance Rules imposed upon the Society by oversight regulator the Legal Services Board.
Although the Society remains nominally responsible to the LSB for the SRA, its ability to control the regulator’s excesses is effectively reduced to zero by these rules. I gather this is one reason the response of the Council to Tony Williams’ article in The Times of 28 November has been so muted. Former SRA board member Williams said that if chair Anna Bradley and/or chief executive Paul Philip will not resign or cannot be removed, ‘the non-executive directors on the board at the authority should resign’.
Another bugbear is the current trend of pursuing solicitors to the Solicitors Disciplinary Tribunal or intervening in their practice for relatively minor offences. The Gazette reported that an intervention was recently overturned by the High Court – but too late to save the practice of solicitor Martyn Santer and destroying his hitherto unblemished 40-year record.
Solicitor Liam Connolly’s rebuke has also been overturned.
The SRA has little to lose, as costs are rarely awarded against it. The perception in the profession is that costs are being used as a tool with the financial aspect of any finding against a solicitor being totally disproportionate.
Fear of financial ruin, not guilt, leads solicitors to accept allegations made against them. Even where there is an arguable case against a firm or solicitor, a barrister who represents solicitors before the SDT contends that charges often include additional ‘makeweight’ allegations with little foundation. They all require a defence, taking the cost of asserting innocence out of reach. It seems a sad irony that those who spend their working lives trying to uphold natural justice are the least likely to benefit from its protection.
Members who attended the SRA’s most recent compliance conference report feeling driven into silence. They feared asking the regulator difficult questions believing they might face possible consequences.
Whenever the issue of the SRA’s incompetence in relation to Axiom Ince was mentioned, the silence was deafening. In one session, where a member of the profession was brave enough to speak up, the session was abruptly ended. This confirmed that the SRA considers the recent Axiom Ince episode to be history from which it has moved on, the matter dealt with by a very large payment from the compensation fund. Little or no information has been forthcoming from the SRA about the ‘missing’ funds.
Even the LSB is unhappy with the SRA’s performance. Its report on this episode says that in order to ‘promote the public interest and protect the interests of consumers, the board decided to initiate action in accordance with its enforcement policy… the board agreed to initiate the process to set directions under section 32 of the [Legal Services Act] which, if imposed, would be aimed at requiring the SRA to make changes to better achieve the regulatory objectives’. The SRA responds with, inter alia: ‘We have already tightened up our investigation and intervention processes. We agree more will be needed in future to check firms are complying with our Accounts Rules… it is time to explore reforms, including more radical solutions such as considering stopping law firms holding clients’ money.’
This is tantamount to using the approach of stopping anyone from stealing cash from a shop by banning all shops from handling cash, regardless of the impact that has on customers, shops and society in general. Surely, requiring solicitors to hold client money in a third-party deposit-holder’s account will add delay and cost to routine conveyancing and probate transactions. The SRA focusing on exercising its regulatory powers to prevent one person from being able to steal such a sum from his firm would be a much better option.
In addition, the assumption seems to be that, unlike bankers, solicitors are dishonest and that client funds will be much safer out of the hands of the profession, where the SRA need no longer concern itself with regulation. The millions of transactions currently handled successfully, honestly and safely by the profession every year are disregarded. This attitude can only serve to diminish public trust in the profession.
The dismissive response to the LSB’s report and the lack of accountability of those in leadership positions within the SRA is in stark contrast to the expectations that the SRA places on those it regulates.
The profession should be able to rely on Bradley and the rest of the SRA board, who are responsible for overseeing the work of the SRA, to offer checks and balances. However, the closeness with which the board and Philip appear to be working, even to the extent of Bradley repeatedly referring to both independent groups together as ‘we’, along with the dismissive response to the latest LSB report, raises doubt about the effectiveness of this oversight.
On behalf of Devon and Somerset solicitors, I echo the call that those leading the SRA and its oversight board should look again at the direction of the SRA and consider whether they are best placed to restore and maintain the confidence of the public and those whom they regulate.
Tony Steiner MBA is CEO of Devon & Somerset Law Society and a non-solicitor
This article is now closed for comment.
14 Readers' comments