LSB proposes to remove diversity ‘model questionnaire’

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A consultation paper published today states that some regulators have ‘now moved past’ the 2011 guidance, ‘while others have started collecting the data but have not used the information gathered to begin to inform policy decisions’.

Regulators would be required to: build a ‘clear and thorough’ understanding of the diversity profile of their respective regulated communities; use data, evidence and intelligence to inform regulatory arrangements and operational processes; collaborate with others; and ‘account to’ their respective stakeholders for its plans and achievements to encourage diversity.

The board proposes to remove a ‘model questionnaire’ from the original guidance. At present, regulators are required to notify the LSB of proposed changes to their data collection methods if it departs from the current guidance.

‘We consider that regulators should now be able to maintain and develop their own, independent data collection methods based on their own experiences,’ the consultation paper states.

In May the Solicitors Regulation Authority announced that its annual diversity survey would take place every two years after acknowledging the burden placed on firms by its requirement to collect diversity data.

MORI pole by TLS about SRA changes showed “considerable disquiet”.

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The survey which was conducted by Ipsos MORI, showed “considerable disquiet among those members of the public”.

Catherine Dixon, the society’s chief executive, said: “Changes to the rules governing solicitors are liable to be met with widespread opposition among the public. We urge the SRA to think again as their proposals will undermine public confidence in the solicitor profession and cause confusion for clients.”

A spokesman for the regulator said that the SRA would “be interested to see the detail of this survey. What the headline figures show is that the public is unaware that there is already a large alternative legal market not subject to regulation over and above normal consumer law. That market is providing consumers with a choice of services at what might be, for some people, an affordable cost.

“Our proposals are designed to enhance the quality of services that people can access in that market, by allowing solicitors to work outside law firms. We are already very clear that solicitors and firms must make sure their clients are aware of what protections they have should things go wrong and that requirement will continue.”

Law Society responds to LSB call for regulatory reform with Brexit

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Robert Bourns, president of the Law Society called on Brexit as a reason not to rock the regulation boat. He said: “During a period of unprecedented change for Britain following the vote to leave the European Union we must maintain confidence in all our markets and in particular the legal market. Uncertainty should be reduced, not increased.”

Bourns said “embarking on regulatory change in this climate, especially when there is broad recognition that the current regulatory framework is working, is misconceived.”

SRA wants reform to proceed “at pace”

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Paul Philip, chief executive of the Solicitors Regulation Authority urged the need to reform “at pace”, saying regulation had to be in the public interest. “Around two thirds of the public think that professional legal services are simply too expensive, and small businesses agree.

“And fewer than one in ten people experiencing legal problems instruct a solicitor or barrister for their legal needs. This can’t really be acceptable. Legal services are simply unaffordable for the vast majority of the public and the small businesses that form the backbone of our economy. And the public purse does not have the resources to close that price gap.”

This is not the time to slow down regulatory reforms that will “support a healthy, legal market, inject more competition and innovation, provide opportunities for solicitors and improve access to law”.

LSB wants to scrap SRA and itself!

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Legal Services Board Chairman, Sir Michael Pitt, said:

“The paper we are publishing today sets out the LSB’s vision for a future regulatory framework for legal services in England and Wales.

We believe that further legislative reform would help address current challenges and make the step change needed to improve outcomes for consumers, citizens and practitioners.

There is a need to tackle the tensions inherent in the existing framework. A new legal framework will help secure the important public interest outcomes that the legal sector delivers, such as maintaining the rule of law and ensuring access to justice. It will also strengthen the contribution the legal sector makes to the reputation of the UK as a great place to do business

Any new legislative framework should take a risk-based approach to regulation and focus on the activities undertaken by providers. It must also be fully independent of the professions and Government.

The existing arrangements are confusing and complex. We believe that a single regulator, covering the whole legal services sector and accountable to Parliament, would be best placed to deliver improvement, deregulate, save cost and act strategically.

I look forward to discussing these proposals with the Government and interested parties.”

Law Society produce template for SRA consultation

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The SRA consultation on new separate codes of conduct for solicitors and firms, which will give more freedom for solicitors to deliver legal services outside regulated firms, and a separate consultation aimed at simplifying the accounts rules will both close on 21 September.

‘The changes proposed by the SRA have huge implications for the solicitor profession and for clients. It is vital the profession has its say on these proposals,’ said Law Society chief executive Catherine Dixon.

‘Our template is designed to make that process easier, and maximise the number of solicitors contributing to this important consultation,’ she added.

‘We know solicitors from all over the country are gravely concerned about the SRA proposals as they fear that the reputation and standing of solicitors will be tarnished if these changes go ahead, resulting in two tiers of solicitors and vital client protections lost depending on where the solicitor is working.

‘Each solicitor will have their own experiences and draw their own conclusions on these proposals. A comprehensive response from the profession can only help improve the final decision.’

Law Society urges profession to give views on ‘dramatic’ change

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Law Society urges profession to give views on ‘dramatic’ change

The Solicitors Regulation Authority’s proposed reforms to the SRA handbook and accounts rules risk ‘weakening client protection’ and ‘damaging the reputation of the solicitor profession both at home and abroad’, the Law Society has warned.

The Society has urged solicitors to give feedback on the changes, and has released guidance, case studies and a template submission to help solicitors.

SRA attacks The Law Society as technical regulator

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Responding to the interim report from the Competition and Markets Authority legal services study, the Solicitors Regulation Authority (SRA) said: “Those who represent a party cannot also regulate it. Measures that regulators could take to open up the market to competition are resisted by their representative arms, who naturally seek to protect the interests of their members.”

The comments are thinly veiled criticisms of the current structure, which retains the Law Society as the technical regulator of the profession, albeit delegating its authority to the SRA.

The society and the SRA are battling over the future shape of regulation. In its comments yesterday, the authority said that the current situation “leads to public confidence and trust in regulated providers being undermined”.

It went on to claim that complete separation for the SRA “would free up the professional bodies to become the voice of their members, without the restrictions of also acting as the regulator. It would also allow more flexibility for law firms and solicitors to decide how specific industry bodies, such as the Association of Personal Injury Lawyers or the City of London Law Society, can work alongside professional bodies to best meet their needs”.

The SRA maintained that “public polling shows that independent regulation would boost trust in solicitors”.

SRA fines ABS £7,500 plus costs for emails made up from client

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Currently, the SRA has the power to fine firms and individuals up to a maximum of £2,000, with any regulatory breach that requires a higher penalty sent to the Solicitors Disciplinary Tribunal.

The limit on fines for ABSs is currently £50m for individuals and £250m for firms.

A decision published on the SRA’s website states that Borley worked in the property department at Morecrofts, Liverpool, between June 2009 and November 2014 when the firm reported him to the SRA.

During his employment, Borley was found to have created two emails which were purportedly from a client.

‘These emails had the potential to cause loss to this client as they purported to give instructions to the firm to use part of the funds held for this client to settle sums due on other matters that were unconnected with this client,’ the decision states.

‘It was found that Mr Borley took steps to conceal his actions and that his conduct misled the firm’s finance partner.’

’It was found that Mr Borley’s conduct was dishonest and that his actions also breached principles 2 and 6 of the SRA principles. Borley was given a written rebuke and ordered to pay a financial penalty of £7,500. He was also ordered to pay the SRA’s costs of £1,350 in investigating the matter. The decision states that Borley’s current practising details are unknown.

The SRA made a section 43 order (control of non-qualified staff), saying it would be undesirable for Borley to be involved in a legal practice in any of the ways described in its decision, except in accordance with the regulator’s permission.

SDT should not have proceeded against conveyancing solicitors

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The present SDT rejected the SRA’s core contention that there were individual and cumulative signs of potential fraud which should have been obvious to a conveyancer of Ms Egoh’s experience.

“At first sight there was a considerable array of unusual features in this matter and the [SRA] relied on their cumulative effect…

“However having examined the factors based on all the evidence which was now before it… the tribunal did not find it proved on the evidence to the required standard that [Ms Egoh] had facilitated or acquiesced in a conveyancing transaction that bore the hallmarks of fraud and accordingly the associated allegation that she failed to act with integrity and/or acted in a way likely to undermine the public trust fell away.

“By way of example, the text of the undertaking given by [Ms Egoh] looked less than candid: but on inspection it was simply the document that she was asked to sign.

“The actions of Mr M, the solicitor who had sent the mortgage money without any of the actions a conveyancing solicitor would expect of the solicitor to a mortgage lender in such a matter, and who then on request simply removed the search supposed to protect those mortgage advances (and that it was the wrong search anyway), were so utterly extraordinary that no solicitor could be expected to contemplate the possibility that the moneys were actually mortgage advances.”

The tribunal said it “entirely understood” the SRA’s initial suspicions about the two solicitors, but continued: “However, it considered the actions of Mr M were so extraordinary that it was entirely understandable that the [Ms Egoh] would not realise that there was a problem.

“She was a transactional lawyer trying to get through a transaction. The tribunal considered that once Mr M’s case was determined, it was clear what he had done: there was then no reason [for the SRA] to proceed with the other allegations.”

The SDT also rejected the allegation that Ms Egoh had not co-operated with the SRA.

The pair were, however, found guilty of a “technical breach” of the accounts rules because the payments were improper as they were from monies which as a matter of fact did not belong to the firm’s clients, and they admitted that they allowed their client account to be used as a banking facility.

Sanctioning them, the SDT said Ms Egoh had undertaken numerous transactions “without difficulty or complaint or sanction”, while Mr Khalique had “an unblemished record and was not alleged to be personally responsible for the actions in question”.