Representation matters

Des Hudson’s recent article, Reputation matters, clarified a number of issues regarding the regulation and discipline of the profession (see NLJ, 3 April 2009, p 488). It is, however, worth reflecting on some further issues. Schemes such as the Solicitors’ Assistance Scheme (SAS) and Law Care provide an invaluable service, but whether they can level a playing field dominated by a well resourced regulator is doubtful.

Help from the SAS
SAS panel members provide an hour’s free advice either by telephone or in person advising about regulatory matters, partnership, money laundering and other compliance related issues. Until the recent shake-up of the Law Society, after Sir David Clementi’s review of the regulatory framework for legal services in England and Wales, the scheme was financed by the Law Society. Recently, however, the SAS has suffered a swingeing cut in this support with only limited meeting expenses being provided by the Law Society.

SAS committee members provide a helpline and support network for solicitors facing professional crisis, however, the scheme’s resources are limited and, after that free hour, further support has to be paid for at commercial rates unless funding can be found from an insurer which, despite what the chief executive suggests in his article, is not widely available. Mr Hudson refers to the “availability of schemes which solicitors can purchase to insure against the costs of representation in the event of them having to face investigation” by the Solicitors’ Regulation Authority (SRA) or appearance before the Solicitors’ Disciplinary Tribunal (SDT).

Insurance drawback
Before the event legal expenses (BTE) insurance policies are available from well known BTE providers. However, the drawback with these products is that they usually require there to be reasonable grounds for defence before an indemnity is made available. In most regulatory investigations there will be a breach of one kind or another and therefore almost no cases in which reasonable grounds for defence may be found to qualify a solicitor for the benefits of cover. It would be good to see the society negotiating with insurers to provide BTE cover which overcame this drawback.

Regulatory defence scheme
It is surprising the SAS is not better supported by the society and even more surprising that no regulatory defence scheme has yet been put in place. This is the kind of service I believe most solicitors would expect their representative body to provide. Medical practitioners have no problem with this recognising as they do that in times of professional difficulty a representative body exists to support its members with relevant services.

The Law Society does, of course, require insurers providing the primary layer of professional indemnity insurance to abide by the minimum terms and conditions. These terms cannot be avoided by insurers when meeting claims and provide for defence costs, including the cost of defending any investigation, inquiry, or disciplinary proceeding to be met irrespective of excess.

However, such cover only arises if a claim has been made or notified. In many cases a notifiable claim does not arise because there is no allegation of professional negligence. Hence the pressing need for proper support for the SAS and a regulatory defence scheme for solicitors.

Improvements
The SDT is independent from the Law Society but is nevertheless funded by the society. Over the past 12 months or so much has been done to improve facilities with proper client consultation rooms for the first time, air conditioning and an additional hearing room. Reducing delays in the time between the end of a hearing and the publication of written findings will help but so would more staff.

Enforcement philosophy
Further concerns relate to a change of enforcement philosophy within the SRA. In-house solicitors and many solicitors in private practice are left aghast at the pedantic approach adopted by the SRA to regulatory issues all in the name of the public interest—but often in cases where the public would be astonished at the resources that have been devoted. A sense of proportion is absent which is damaging both the profession and the authority.

A set of published rules for the conduct of investigations and a tariff of sanctions for particular breaches would help restore the profession’s faith in the authority. A start has already been made on this but more can be done. The publication of the SRA’s Comprehensive Risk Scores on its website informs the regulated community and others about which breaches are accorded priority and where the authority will invest resources. Lord Hunt’s review may hasten this process of increased transparency. I hope that the Law Society will fulfill its role as a representative body and I welcome the chief executive’s invitation for contributions. I look forward to hearing more about how the society intends to deliver the services that are desperately needed by an ever more regulated profession.

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