Council Member Report - Linda Lee

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.

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; • 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

obligations are not made clear, as is the case with these proposed rule changes. The fear of being second guessed by the regulator cannot be underestimated.

Fitness to Practise

It appears that the SRA is taking a different approach to medical regulators in terms of fitness to practice. The SRA is focusing on what it says are an increase in cases, ‘where a solicitor’s health issues impacted on their ability to practise safely or participate in disciplinary proceedings to address concerns about their practice’. It goes on to say that, ‘it means a hearing before the Solicitors Disciplinary Tribunal (SDT) cannot fairly take place, allowing the solicitor to continue to practise when their fitness to do so is in question’.

In terms of fitness to practice, it is proposed to amend the rues to explicitly state that health issues affecting a solicitor’s ability to practise or to meet their regulatory obligations are grounds to restrict admission to the solicitors profession, or to impose conditions if the SRA are satisfied that a solicitor is likely to put at risk the interests of clients or others, or that they will not comply with its regulatory arrangements. Conditions, may for example, restrict the solicitor from carrying on particular activities or holding a particular role, or the SRA may refuse to issue a practicing certificate (which to all intents and purposes would have the same impact as striking someone off the Roll). It is not clear from the consultation what rights of appeal would lie from such decisions.

Conditions might include a requirement for the individual: • to follow treatment recommendations of an appropriate healthcare practitioner • to work under the supervision of a senior solicitor • to limit their practice to a certain area or function.

The conditions would be reviewed annually and could also be reviewed at any time at the request of the individual or on the SRA’s own initiative. The conditions could be amended or lifted if medical evidence shows that (in the SRA’s opinion) the risk being managed by the conditions has been successfully addressed.

Where conditions have been imposed in response to a health issue which adversely affected the individual’s ability to participate in a disciplinary process, the lifting of conditions could then lead to the disciplinary process being resumed where appropriate.

Keeping of the Roll

Following a consultation in 2014, the annual keeping of the Roll exercise was abandoned. Prior to 2014 each solicitor who did not hold a practising certificate was asked if they wanted to stay on the Roll and, if they did, they were required to pay a £20 fee to remain on the Roll. If no response was received, the names were published in the Gazette before the solicitor was removed, in case contact details had been lost.

Abandoning the fee was supported by the Law Society but it opposed the SRA failing to keep the Roll up to date. Following the consultation, the SRA also considered whether it should commit to running the process at set intervals of every 3 or 5 years and concluded that it would be preferable to run the process when it deemed it necessary. It has not run such a ‘keeping of the Roll’ process since 2014.

At conferences, SRA senior executives spoke optimistically of relatives or possibly the probate registry informing the SRA when a solicitor died. There is no evidence that this approach was successful.

The SRA have now launched a fresh consultation which proposes restoring the annual keeping of the roll exercise from April 2023 with the reintroduction of an associated administration fee of between £30 and £40.

The SRA say that if anyone to who it applies does not complete a keeping of the Roll return, they would from that point lose the right to refer to themselves as a non-practising solicitor or access to ‘ the associated benefits this title brings’.

Interestingly the SRA’s rationale for reintroducing the exercise is two-fold - the first is that General Data Protection Regulation (GDPR) require the SRA to only hold current data and the second is that the SRA now has a ‘modernised IT system, particularly the user interface. This will make the process of maintaining personal records considerably less arduous for solicitors than it was.’

The SRA now acknowledge that the failure to maintain the Roll caused significant problems, including the SRA’s statement that it had an inability to contact those who may be affected by the closure of SIF.

As at February 2022, there were 214,032 solicitors of whom 153,840 had a practicing certificate. This means that there are over 60,000 solicitors without a practicing certificate. Some will be working as a solicitor perhaps in house, without the need for a practicing certificate, but many could have different careers, some may be retired, and some may well have died. However, if this is incorrect and in fact, they are all alive and well and keen to remain on the Roll, it could result in a new source of income worth £2.4 million. Hopefully if the Roll is maintained and the database is accurate it would see an end to the need for solicitors to contact the Law Society to ask for certificates marking their 50th and 60th anniversaries on the Roll.

The consultation closes on 20 May 2022.

Linda Lee

Council Member March 2022

Linda Lee has been Council Member for Leicestershire, Northamptonshire and Rutland since 2003. She is a past President of the Law Society of England and Wales and is the current Chair of the Professional Indemnity Insurance Committee and a member of the Policy and Regulatory Affairs Committee, the Regulatory Processes Committee and Access to Justice Committee. She is current Chair of the Solicitors Assistance Scheme. Linda is an experienced litigation solicitor and is a Consultant at Radcliffesle Brasseur where she specialises in solicitors’ disciplinary, compliance and regulatory work. She can be contacted by email at: lindakhlee@aol.com

i) https://www.sra.org.uk/sra/consultations/ consultation-listing/health-wellbeingprofession/?s=o ii) https://www.sra.org.uk/solicitors/guidance/ workplace-environment iii) https://www.sra.org.uk/sra/consultations/ consultation-listing/restoring-annual-keepingroll-exercise