Northamptonshire Law Society
Council Member’s Report, Apr.‘22 At the time of writing, there was no announcement from the SRA regarding its decision in relation to the Solicitors Indemnity Fund (SIF). However, the SRA had reported that it had received over 300 responses to the consultation, which was unprecedented and as a consequence, it is likely that the SRA decision will be delayed. However, there was no suggestion from the SRA that its response is likely to be positive, despite what appears to be overwhelming opposition to the closure of SIF including from the Legal Service Board’s Consumer Panel. The Legal Service Board itself does not appear to object to the closure of SIF and still intends to review the operation of the professional indemnity insurance (PII) market across all legal services. The Council for Licenced Conveyancers (CLC) consultation regarding a review of the PII arrangements for licensed conveyancers closed on 25 February 2022 and the outcome is awaited. The options under consideration include their position regarding run off and post six year run off cover (PSYROC). At present, after the six-year period of run-off cover, clients with a claim can apply to the Compensation Fund managed by the CLC and funded by its regulated community and there have been only a small volume of claims from firms that have ceased. It will be interesting to see how the CLC decide to address PSYROC for the future and how the LSB will respond to the CLC decision. Rule changes on health and wellbeing at work The SRA launched its consultation on health and wellbeing at work and this closes on 27 May 2022. The SRA state that the purpose of the proposed changes is to make it clear that those it regulates must treat colleagues with respect and dignity, and that if they fail to do so, the SRA will act, where necessary, to protect the interests of clients and the public. The SRA are also considering rule changes to support its ability to take ‘appropriate and proportionate action’ where necessary to deal with concerns over practitioners’ health affecting their fitness to practise.
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Treating colleagues with respect and dignity: Under the current rules, the SRA say they will take regulatory action where there is: • abuse by an individual of their position of authority, or behaviour that amounts to discrimination, victimisation or harassment • a pattern of the abuse of authority by senior staff that has been left unchecked by the firm • a complaint of discrimination, victimisation or harassment that is not dealt with by the firm in a prompt and fair way • ineffective systems and controls, including failure to supervise or support staff leading to serious competence or performance issues or delivery failures. However, the SRA now wishes to go further and introduce to the Codes of Conduct an explicit requirement to treat people fairly at work, adding an explicit obligation both on individuals and on firms to treat colleagues fairly and with respect, and not to bully, harass or unfairly discriminate against them. The SRA also propose adding a requirement that firms and individuals challenge behaviour which does not meet this standard, with the aim of fostering a collegiate approach and a culture in which poor behaviours are not tolerated. The difficulty is obvious in that whilst some behaviours may be clearly inappropriate, others will not be, and will require a judgment to be made as to what is or is not inappropriate behaviour. The SRA have published new guidance, this gives more examples of situations where it will take action, such as: • a pattern of the abuse of authority by senior staff that has been left unchecked by the firm; • a complaint of discrimination, victimisation or harassment not dealt with by the firm in a prompt and fair manner; • complaints of bullying raised with the firm over a period of time involving a number of staff and inadequate action taken by the firm as a result; • evidence that the incidents had not been brought to light sooner because of the firm’s culture and/or inadequate reporting and disciplinary procedures;
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• a firm pressurising staff to withdraw their complaints; • ineffective systems and controls, including failure to supervise or support staff leading to serious competence or performance issues or delivery failures; and • the imposition of wholly unreasonable workloads or targets. The SRA have also produced accompanying case studies. The first case study concerns a paralegal who felt that their performance management had not been conducted in a fair way. After investigation, the SRA concluded that the concerns were not sufficient to warrant a breach of regulatory requirements. Part of the decision-making appears to have centered on whether or not there had been previous complaints about the firm to the SRA. The SRA go on to say that whilst a successful Employment Tribunal claim would not of itself trigger regulatory action, the SRA may revisit the situation if the tribunal made any adverse findings about the partner’s actions, or the firm’s culture or procedures. This is a rather unusual approach. It seems to say that whilst the SRA may investigate and not deem behaviour inappropriate, if another body subsequently looks at the same evidence but comes to a different conclusion, the SRA will revisit its own decision and take action. The second case study relates to a concern where someone was passed over for promotion and the third relates to matters which impacted on clients. There is no guidance as to what individuals who witness potential potentially poor behaviour should do or what the parameters are. Undoubtedly, the subjective nature of the assessment of behaviours, will lead to increased levels of uncertainty and concern about potential regulatory involvement, particularly in the context of the requirement on individuals to challenge such behaviour. The SRA appears to underestimate the stress and concern its investigations cause, even if ultimately there is no further action - in many cases these take place over a prolonged period. Even when investigations have not commenced, many solicitors are in fear of investigation, particularly where
