A worsening economic climate was high on the agenda at the annual COLPs and COFAs conference – and delegates heard that a single regulator for legal services remains an aspiration at Westminster

Six hundred compliance officers pitched up to the Solicitors Regulation Authority’s annual COLPs and COFAs conference at Birmingham International Convention Centre on Tuesday. An impressive turnout, especially given that the event will be rerun virtually across four days next week.

An opening Q&A session featuring chair Anna Bradley and chief executive Paul Philip confirmed that the watchdog is very much open to an expansion of its remit. Moving to a single regulator for legal services is a ‘live conversation’ in Whitehall and at Westminster, said Bradley, though the SRA believes securing legislative time remains a significant hurdle to overcome when the government is facing bigger and competing priorities.

‘There is an appetite to try and move more in that direction,’ she said. ‘This is a live conversation at Westminster and Whitehall.’

‘Is it time for a single regulator? Possibly,’ agreed Philip. But he believes this will not happen quickly. ‘[Depending] on the politics of the day there is always something more pressing to move to,’ he said.

The SRA would be an obvious first choice to assume more general oversight of a sector currently superintended by nine approved regulators. The others are much smaller. Earlier this year, the SRA was controversially approached by the Chartered Institute of Legal Executives to take over regulation of legal executives from CILEx Regulation.

So where has that got to? The regulator says it is ‘in the foothills’ of discussions over the potential transfer, including talks with the Law Society. ‘We can’t see any reason why we couldn’t do this operationally,’ Bradley told journalists later. ‘But that in a way is a smaller question. The bigger question is does it have a fair wind politically. We are looking at what the regulatory model will look like and are heading toward a discussion with our [the SRA] board in the spring.’

Philip was asked by the Q&A session’s chair, BBC journalist Clive Myrie, about the deteriorating economic climate for law firms and their clients. Philip said they face potentially the worst backdrop since the aftermath of the banking crisis in 2008/9.

‘At that time we were particularly concerned with misuse of client accounts,’ he said. ‘When things get hard we need to pay close attention to the client account because there is a natural tendency to try and use it to get by – not stealing, though there are folk who do that unfortunately – but using it to pay bills and putting [the money] back in. That’s a major issue for us.’

Asked about the market for professional indemnity insurance, Philip said the regulator sees no evidence of ‘market failure’. Premiums might still be going up but firms were more likely to secure cover last year than they were the year before.

Another issue on the SRA’s agenda is the disparities which have been exposed in pass rates for the Solicitors Qualifying Examination, which the regulator has committed to investigate. White candidates in the first cohorts significantly outperformed black and Asian candidates.

'When things get hard we need to pay close attention to the client account because there is a natural tendency to try and use it to get by – not stealing, though there are folk who do that unfortunately – but using it to pay bills'

Paul Philip, SRA

‘We’ve got what I would describe as a very skewed cohort who have gone through SQE1 and SQE2 so far,’ said Bradley. ‘It’s not a representative sample. It will be another 12-18 months before we are able to draw solid conclusions.’

‘Skewed’ in what respect? Because, the SRA said later, a disproportionate number of candidates in the first cohorts were lawyers who qualified abroad who would previously have undertaken the QLTS. They achieved a lower average pass rate than the overall average – in future, the SRA expects a higher proportion of candidates to have undertaken a dedicated SQE preparation course.

Research on reasons for the disparities will land on the regulator’s desk ‘at about the same time as stronger datasets’ that will enable the SRA to consider next steps, Bradley added.

Philip also revealed that the SRA is preparing to issue a warning notice to the profession on ‘lawfare’, the use of the legal system by oligarchs and others to intimidate and abuse journalists and civil society actors. A first draft has already been prepared.

‘Rich people trying to protect their reputation inappropriately, without any due cause, to silence people raising legitimate concerns, is an issue that has come to the fore,’ he told delegates. ‘We are in the middle of that as the regulator of solicitors. We are about to publish a warning to the profession on what we expect.’

The SRA is dealing with at least 25 cases of alleged strategic litigation against public participation.

 

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