Another SRA ruling crying out for explanation

In my article ‘Huge fines show SRA is misusing its powers’ (2 February), I criticised the Solicitors Regulation Authority’s in-house decision-making in drink-driving cases. The regulator had imposed fines many times higher than those imposed upon the respondent solicitors by the criminal courts, which are entrusted by parliament with the responsibility of sentencing those who break the criminal law.

In this article, I make the same criticism, but from the opposite perspective. Whereas in the drink-driving cases I believe that the sanctions were disproportionately severe, in the case I shall relate – reported in the legal press earlier this month – I believe that the sanction was disproportionately lenient.

B, the solicitor concerned, was employed by a west London firm. The best I can do is to relate the facts set out on the website, which led to an agreed fine of £10,402.

The facts recorded on the SRA’s website are, in summary:

2.2. In May 2018 the firm through Mr B acted for a client, Ms T, in her divorce proceedings. Mr B agreed to act for her and advised her he could act for her and agreed a basis of charge. Under this agreement, she paid a total of £14,732, which included £5,772.50 in disbursements, direct to Mr B’s bank account.

2.3. On 3 May 2018 Ms T applied to the family court to divorce her husband. The firm was listed as the petitioner’s solicitor. An email was sent by Mr B from his work email address to Ms T on 21 May 2018 which said that his fees were ‘quite simple’ and would be £1,200 plus a court fee of £550 but if Ms T’s husband contested the divorce the costs could run into the thousands of pounds. Mr B provided Ms T with his personal bank account details and requested that she make payments directly to him. He subsequently asked for the final payment to be paid into the firm’s client account. Ms T made payments to Mr B totalling £14,372 between May 2018 and March 2020. The matter had not reached its conclusion.

2.4. Ms T states she had instructed Mr B in his official capacity at the firm, but states she did not receive an engagement letter from the firm or bills.

2.6. On 6 July 2020, Mr B sent an email to Ms T advising her to correspond with Ms T’s ex-husband (acting as a litigant-in-person) directly. Mr B sent a further email to Ms T on 7 July 2020 advising her to tell the court she was acting in person and that he would also write to the court to remove his firm from the court records. An email sent by Mr B to the other side on 7 July 2020 said he was without instruction and would not be entering into any correspondence.

2.9. On 7 August 2020 Ms T raised a formal complaint to the firm about Mr B’s handling of her matter. The… firm took steps to officially adopt Ms T as a client of the firm on 11 August 2020.

2.10. The firm confirmed Ms T was their client and on 14 August 2020 Ms T and the firm came to an agreement whereby they repaid her the full sums paid to Mr B plus an amount in compensation and in return the firm came off the court record as acting for Ms T.

2.11… The final hearing had to be adjourned while Ms T found alternative representation.

If I have understood these facts correctly (and I invite the SRA to correct me if I have not) this lamentable tale reveals that:

• Mr B took on the case in his role as a solicitor in the firm, but failed to produce a client care letter or similar;
• He instructed the lay client to pay the fee into his own private bank account rather than his firm’s client account;
• She paid more than £14,000 into his private account;
• Despite acting for her, he told her to inform the court that she was acting as a litigant in person.

If, as seems to be implicit in the terms of the settlement recorded above, Mr B did not have permission from his employers to work in a private capacity at the same time as operating as a solicitor in the firm, did he not deprive the firm of the income it should have earned from Mrs T? If so, was that dishonest? What would have been the insurance implications, and was the lay client put properly in the picture? Those questions would normally be thrashed out in public in the Solicitors Disciplinary Tribunal, findings of fact arrived at, and a sanction imposed on the basis of those findings. If either side were dissatisfied by the sanction, an appeal would have been available as of right to the High Court.

In the present case dealt with by the SRA in-house, no proper scrutiny is available. SRA disciplinary decisions are made behind closed doors by nameless and faceless employees of the regulator. Yet the decision cries out for proper explanation and analysis. It is difficult to see how the profession, let alone the general public, can have confidence in a system of regulation which produces results which are so haphazard and apparently quixotic as those in Mr B’s case and the drink-driving cases.

For some reason, the SRA decision-maker did not consider that this case merited referral to the SDT. Had it been so referred, unless there are further facts not recorded on the SRA website, it is unlikely that the SDT would have been as lenient as the SRA. In the ringing tones of Sir Thomas Bingham MR in Bolton v Law Society [1994] QB 912, explaining the purposes of imposing sanctions on solicitors: ‘The second purpose is the most fundamental of all: to maintain the reputation of the solicitors’ profession as one in which every member, of whatever standing, may be trusted to the ends of the earth. To maintain this reputation and sustain public confidence in the integrity of the profession it is often necessary that those guilty of serious lapses are not only expelled but denied re-admission… A profession’s most valuable asset is its collective reputation and the confidence which that inspires.’

I am completely baffled by the decision-making process within the SRA which leads to such peculiar results, whether too severe in the drink-driving cases, or, as here, too lenient. Although I sometimes call for explanations from senior SRA personnel about matters to which I draw attention in these pages, they always ignore me. Hope springs eternal however, and I would ask that someone in the organisation reassures me and anyone else concerned about the SRA’s use of its statutory powers, as to how those powers are being exercised, and what oversight exists. Likewise, I am sure it would help to know that the Law Society is taking this issue seriously – but again, I am not holding my breath.

Gregory Treverton-Jones of 39 Essex Chambers specialises in regulatory and disciplinary issues concerning legal professionals. He has co‑authored successive editions of The Solicitor’s Handbook. The Solicitor's Handbook 2024 will be published this month