A solicitor QC who acts for firms under investigation by the Solicitors Regulation Authority has accused SRA investigators of a ‘Kafkaesque’ lack of proportionality in their dealings with small firms and individual solicitors.

Andrew Hopper QC (pictured) told the annual conference of the Solicitor Sole Practitioners Group last weekend that SRA investigators should ‘self-audit’ their own processes to bring ‘fairness into play’. Hopper said firms are turning down legitimate business because of a fear of SRA action. He gave the example of a small black and minority ethnic firm that declined an instruction to handle the £10m purchase of a property off London’s Park Lane because it thought that the SRA would ‘swoop’.

The firm left the profitable transaction to a larger firm that could carry it out without fear of challenge. In another firm, one partner of eight had contravened the rules and then moved on. Applying the principle of ‘vicarious liability’, the SRA took the seven remaining partners to the Solicitors Disciplinary Tribunal.

Hopper said: ‘One is left with a sense of Kafkaesque disbelief. This is not what outcomes-focused regulation is supposed to be about.

‘The black mark hanging over the firm disqualifies it in the earliest stage of tendering for any public contract, while the individuals affected will find it impossible to find a new position.’

When faced with poor decisions, the only option for firms is to judicially review the SRA - which most find ‘unattractive’, Hopper said. ‘The SRA should adopt a form of self-audit to examine whether the impact of its actions is proportionate.’

He also called upon the SRA to review the way it communicates with firms under investigation. Presently, he said, firms receive a letter requiring a response to a dozen or more questions within 14 days. Firms then endure months of silence before receiving another letter, requiring more answers within 14 days. Requests for progress reports or information such as the nature of charges against them are refused, Hopper said.

‘In the meantime, the firms will struggle to get professional indemnity insurance cover because the application form asks about SRA investigations and no top-notch lawyers will want to join a tainted firm.

‘It would help if the SRA was able to regulate itself, but it seems it is accountable to nobody.’

Invited to respond to Hopper’s address, SRA chief executive Antony Townsend said: ‘It is difficult to respond to anecdote-based evidence. Our aim is to get it proportionate and right.’