Finers partner slams SRA's new rules on defending solicitors
Finers Stephens Innocent (FSI) partner Ian Ryan has quit his role on the Solicitors Regulatory Authority (SRA) panel in protest at new rules that he claims restrict his practice.
Ian Ryan
Ryan, a partner and head of business crime and professional discipline at FSI, refused to agree to new terms in his contract that would have stopped him defending solicitors appearing at tribunals.
Under the new terms the SRA requires its prosecutors to agree not to defend accused solicitors.
Ryan and FSI have now ended their 15-year association with the regulator.
Ryan said he had “grave concerns” about the SRA limiting access to the best practitioners in a niche area of law.
He said: “I don’t think it’s fair to members of the profession to be denied access to a number of advocates when they’re facing the full weight of the SRA.
“It’s a matter of great regret that I’ve had to leave, but I feel very strongly about this. Anyone who prosecutes for the SRA should be independent and the concern is if you take that away it makes prosecutors less able to exercise judgement.”
Historically, solicitors on the tribunal panel for the SRA have been able to defend clients if instructed as well as prosecute for the SRA.
Ryan was the only one of approximately 18 lawyers from around 15 firms to step down after the changes were imposed this month.
The restrictions do not apply for counsel.
According to the SRA the new rules have been put in place to prevent conflicts of interest, but Ryan believes that the disciplinary watchdog is simply increasing its chances of winning cases.
Jennifer Johnson, SRA head of legal and enforcement, said: “Just as law firms need to identify risks and amend policies accordingly ahead of time, so the SRA needs to regularly review its practices and the terms of its commercial relationships. We’ve identified there’s a risk with our panel of solicitors conducting disciplinary prosecutions that confidential information could be disclosed to them that could place them in a position of conflict if they subsequently accept instructions to act for a respondent.
“We’re looking to appoint a new panel in January 2013 and will be starting a tender process later this year. For the reason given above, when we go out to tender, bidding firms will be told that in looking to secure a position on our panel, they’ll have to agree that they’ll not during the period of the contract accept any new instructions to undertake work for firms or individuals facing regulatory investigations or SDT prosecutions. The tendering process will be open to all and there’s no guarantee the firms on the current panel will secure a position on the next one, or indeed that they’ll all apply for such a position.
“That in itself undermines any claim that such a condition ensures the SRA ‘keeps all the best firms for itself’. However, it also needs to be said that there are many firms in England and Wales that are highly competent in dealing with prosecutions and regulatory investigations who are available to be instructed by respondents. It would be surprising to suggest that only firms on the current SRA panel are up to the job of representing respondents properly and ensuring they get a fair hearing.”
Readers' comments (6)
Frank Maher | 2-Apr-2012 10:41 am
The SRA's stance is understandable but that does not make it desirable. As well as the confidential information issue they identify, it also raises a significant question in relation to independence, as a number of those who prosecute may now derive close on 100% of their income from one source. Nobody questions employed solicitors' entitlement to do the same, but the SRA does question firms' independence when they receive >20% of their work from one introducer. Independence will also be a significant issue for ABSs, where, for example, a claims management company teams up with a law firm to become an ABS, or a financial institution (e.g. mortgage lender) owns an ABS which provides services to its customers as well as itself . The interpretation of 'independence' was considerably broadened by the guidance to rule 1.03 of the Solicitors' Code of Conduct 2007, amended on 31 March 2009. I don't accept the view that it only reflected what was always the case; it was amended to deal with the perceived threat of firms 'jumping the gun' before ABSs were permitted and is not repeated in the new Code. If the principle always meant what was set out in that amendment, it gives rise to interesting questions in relation to ABSs. What is meant by 'independence' in the SRA Principles is perhaps now ripe for wider and more open debate.
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Anonymous | 2-Apr-2012 10:52 am
The SRA, like any organisation given too much power and left unaccountable, is abusing its power and is out of control and innocent solicitors (mostly from small firms as that's who they naturally and unjustifiable pick on) are suffering the effect of this.
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Andrew Hopper QC | 2-Apr-2012 2:25 pm
Thanks Frank - erudite as always; though I am not convinced about "understandable". What struck me was the very long self-justification...
It seems very odd that a perceived conflict of interest has just arisen when the panel system has existed since at least the 1970s without anyone spotting it before. It has always been thought that defending makes you a better prosecutor and vice versa, and of course this could not be imposed on the Bar. It also seems odd that the SRA cannot, seemingly, trust its own lawyers to identify a conflict should one arise on a case by case basis, which is the way the rest of the legal world manages to operate.
However, the alternative scenario, which the excessively cynical might suggest, that the SRA does not really like defending advocates to know too much about what goes on in the organisation, is of course untenable, as I am sure that we all agree, because as we all know the SRA is a completely transparent operation.
The reality, as Ms Johnson knows, is that the pool of "defence only" firms and advocates who are really experienced in this field is very small; I am acutely aware of that when I need to recommend or refer, and removing all those who choose to prosecute, as well as defend, from the experts available to assist solicitors in their dealings with an all-powerful regulator is a very negative development by any measure.
Independence is engaged in both the respects identified by Ian and Frank - in the sense of the 'prosecution only' mindset, and in over-dependence on a single client. This is not healthy.
It is also unnecessary - how curious that the SRA which sets the rules, including those relating to conflicts of interest, should feel that those rules are inadequate in relation to its own relationship with the profession as a consumer of legal services, though they are wholly adequate in all other respects...
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Frank Maher | 2-Apr-2012 3:46 pm
Thanks Andrew. As for ‘understandable’…I was hoping to keep going a bit longer! Seriously, though, it does demonstrate that clients, even it seems the SRA, are sensitive to conflicts (including confidentiality issues here) in a way lawyers do not always perceive. There is an interesting quote in the biography of Steve Jobs by Walter Isaacs noting Jobs' dismay that Google ended up competing with Apple after Google's CEO had been on Apple's board. The author reports how Jobs felt 'betrayed' and 'ripped off'. But I don't condone the imposition of a prosecution only rule on solicitors. I do not believe it assists either the administration of justice or the perception of justice being fairly administered.
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Anonymous | 2-Apr-2012 8:32 pm
"We’ve identified there’s a risk with our panel of solicitors conducting disciplinary prosecutions that confidential information could be disclosed to them that could place them in a position of conflict if they subsequently accept instructions to act for a respondent."
Let's think this through: presumably the SRA will be duty bound to seek to injunct any firm which has previously acted in a prosecution capacity but then seeks to defend a solicitor, because of the risk of a "position of conflict"? No, I thought not: because Ms Johnson is talking nonsense.
"...The tendering process will be open to all and there’s no guarantee the firms on the current panel will secure a position on the next one, or indeed that they’ll all apply for such a position."
So all these former panel firms will be unable to act to defend solicitors, because of the risk of a conflict of interest (unless the SRA gives informed consent)? No, I thought not.
This is misguided. Ms Johnson's self-serving 16-line attempt at justification rings hollow. Bad call, SRA.
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Anonymous | 3-Apr-2012 6:58 pm
Yes, this is a clear abuse of the SRA's power.
Even HMRC don't argue that barristers who advise taxpayers on tax avoidance schemes should not be used by HMRC to challenge tax avoidance schemes (as long as the barrister has not been involved in the tax avoidance scheme in point and is not otherwise conflicted of course).
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