Banking StandardsLetter from Antony Townsend, Chief Executive, Solicitors Regulation Authority
I was grateful for the opportunity to provide evidence to the Parliamentary Commission on Banking Standards earlier this week. I hope our experience and approach as the largest regulator of legal services has been valuable in your consideration of proposals to regulate bankers. I am writing to provide you with the further information I committed to make available to the Commission.
(1)The Commission was interested in the appointment and composition of the Solicitors Disciplinary Tribunal, the body to which we refer disciplinary cases. The Solicitors’ Disciplinary Tribunal is constitutionally independent of both the Solicitors Regulation Authority and the Law Society, the approved regulator, and is established by virtue of Section 46 Solicitors Act 1974. It is largely funded by a levy imposed by the Law Society. Its members are appointed by the Master of the Rolls and are either solicitors of not less than 10 years’ standing or lay members who must be neither solicitors nor barristers. There is no statutory limit on the total number of members of the Tribunal but at present it comprises forty solicitor members and twenty lay members. For the purpose of hearing and determining applications, the Tribunal members sit in divisions of three, comprising two solicitor members and one lay member. A solicitor is the Chairman of the division. We have no say in its composition; we are simply the prosecutor before the tribunal.
(2)I was asked how many solicitors have been struck off or suspended. To give you an indication, I can confirm that from 1 May 2011 to 30 April 2012 52 solicitors were struck off. Reasons included misappropriating clients’ money, criminal convictions, grossly misleading clients and failing to discharge their professional duties honestly. In this time 18 Solicitors were suspended indefinitely, 29 Solicitors were suspended for one year or more and 13 Solicitors were suspended for less than one year. These were cases where the solicitor’s offences were very serious but were not considered sufficiently serious to justify permanent removal of a right to practise. In the case of an indefinite suspension, the solicitor may apply for the period of suspension to be brought to an end in specified circumstances. As I mentioned in my evidence, many cases in the less serious category do not get as far as the tribunal and can be disposed of by the SRA with appropriate sanctions.
(3)One of the most important aspects of changing or putting in place a regulatory system is trying to identify what the drivers are that aid compliance. As I outlined in my evidence, the SRA undertook extensive research into attitudes to compliance in 2011. I enclose the full copy of this report as requested by the Commission. The research, involving 200 firms, highlights some important findings which may be helpful to the work of the Commission.
The research found that firms accept the rationale behind regulation but a strong motivator for compliance is professional pride. Many firms accept regulation because of their pride in being part of the solicitor’s profession, and the role in regulation in upholding standards. The research found that the fear of reputation damage, and the denting of professional pride, appeared to be of greater significance than the risk of receiving a sanction, but for those not motivated primarily by pride, sanctions were an effective deterrent.
(4)We will shortly be publishing the findings of follow-up research on this issue, to see if our new risk-based and outcomes-focused approach is beginning to percolate through the profession. As soon as this is published I will make it available to the Commission.
14 January 2013
