Firms on ‘hiding to nothing’ with SDT inequality of arms

The commercial imperative for solicitors to ‘come quietly’ and avoid lengthy disciplinary proceedings is getting stronger as the insurance market hardens, a regulatory specialist has said, amid growing concern that young solicitors cannot adequately defend themselves at the tribunal.

Gregory Treverton-Jones QC (pictured), long-time co-author of The Solicitor’s Handbook, said the problem of funding for Solicitors Disciplinary Tribunal cases is becoming more acute because the insurance market is tightening. 

‘The large firms tend to be well insured and are covered for the legal costs of participating in SRA investigations, but I understand that such cover is getting harder and more expensive to find,’ he told the Gazette. ‘As for the smaller firms, they are on a hiding to nothing, as they tend not to have insurance cover. On the current state of the law, if they are acquitted in the SDT they are most unlikely to get an order that the SRA pays its costs. So the commercial imperative to “come quietly” and do a deal with the SRA is very powerful.’

The Law Society has acknowledged that there is an ‘inequality of arms’, and said it is exploring ways to support lawyers appearing at the SDT.

One proposed solution, put forward by president of Westminster & Holborn Law Society Paul Sharma, is that the Society pay for representation (Gazette, 11 October). He told the Gazette there are several funding models the Law Society could adopt, which would be significantly cheaper than the regulator’s ‘extravagant’ model.

Marc Beaumont, a barrister specialising in disciplinary proceedings, supported the concept: ‘For as long as I’ve been involved in defending solicitors, the disparity has been even worse than it is at the bar. I don’t think funded defence representation is something to be feared at all. It should be welcomed because it’s a validation of the fairness of the system.’

However, Beaumont said the business case was flawed as, under current case law, if the regulator loses it does not have to pay the respondent’s costs except in exceptional circumstances. ‘That’s not an attractive proposition if you’re an insurance company,’ he said.

Treverton-Jones predicted objections to any proposal that Society funds be spent upon those who have allegedly brought the profession into disrepute. ‘Some sort of discretionary fund, whereby funds are provided by the Law Society in deserving cases, might be the answer – but who is to judge what is a deserving case?’ he said.

The treatment of junior lawyers by firms is also under scrutiny, with one solicitor claiming that the pressurised culture ‘forces mistakes and bad judgement’.

Edward Sparrow, chairman of the City of London Law Society, said: ‘Complexities can arise around establishing whether a lawyer needs support or discipline, and here firms are faced with the question of where they draw the line and what constitutes a matter for the regulatory authorities.’