Taking the self out of regulation
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Former Law Society president Tony Holland believes that it is time for real debate on the issue of self-regulation. Tony Holland is principal ombudsman at the Personal Investment Authority.
Self-regulation has taken a decided battering of late. First in line was financial services, when the Government swiftly put an end to the prevailing arrangements and created the Financial Services Authority.
There was no preliminary discussion about the existing arrangements and, given the pensions misselling scandal, that was not surprising.
A by-product of this no-nonsense approach has been that the recognised professional status of the Law Society is set to become one of the casualties, and solicitors who practise in this field will be regulated by the Financial Services Authority when the new Financial Services Regulatory Reform Bill is enacted by Parliament.
Now the Fabian Society has blown its whistle on the profession by proposing that regulation should be placed in the hands of a non-self-regulating statutory authority.
It would have considerable lay representation and be very much concerned with the public interest. The reaction of the Law Society was the expected one of immediately rubbishing the report. No harm in that, but a more reflective position might have been adopted.
Let us take a step back and consider today's realities. First, consumerism is here to stay. It will be the dominant force in the new millennium. And why not? After all, we are all consumers and need protecting in our daily activities from those who are dishonest, incompetent, or who muddy the waters with their own vested interests.
To stand in the way of such changes might not be the sensible course. At least we should consider whether such a stance is in the best long-term interests of lawyers and the public alike.
The public are deeply suspicious of self-regulation. Too many blemishes have taken away the smooth and shiny surface of professionalism. Cosmetic changes are unlikely to be adequate enough to restore self-regulation in the eyes of the public.
Secondly, there is the Pandora's Box opened by annual elections for the presidency of the Law Society. All good clean fun, and grist to the mill of legal journals.
However, there are no prizes for guessing why no candidates are trumpeting the public interest. I have yet to read any election manifesto which proclaims that it is essential, for a lawyer to put his client's interest first; that the Law Society should strengthen its practice rules to ensure even more clarity in solicitors terms of business letters; and that solicitors should always have in-house complaints handling arrangements that are efficient, independent and objective.
We maintain that we are a profession that should always be self-regulated. The question that must be posed is, for whose benefit? The independent commentator will suggest that it is more for our benefit than for that of the public.
The annual elections have, in my view, stripped away the last vestiges of pretence in this whole debate about self-regulation.
It is frankly not arguable any longer to pretend that when solicitors vote they have even a tangential regard for public interest when all the candidates, with one notable exception - Kamlesh Bahl - have claimed the ability to do all things known to man to improve the lot of solicitors.
Not that there is anything wrong with that approach but does it not mean that we can no longer sustain the view that our own interests do not drive the whole electoral process? The public suspects this. The media and the politicians know it.
It might be different if our practice rules were founded on an ethical basis but they are not. They are a hotchpotch of rules which first saw the light of day in the 1930s. Since then, they have grown through the council's reactions to events and to court decisions. There is no profound underlying philosophy behind them. The first rules of the 1930s were based on two prime considerations - not to mix your money with your clients (a pretty obvious concept but which, even then, had its opponents) and to protect "property" in clients.
Solicitation of your colleagues' clients was by no means fashionable and woe betide any solicitor who was caught doing it. How far have we come since then? Now it is almost de rigeur to solicit your colleagues' clients. So perhaps the lack of an underlying philosophical basis for our rules is beneficial. We can change them to suit ourselves in the light of the current commercial climate. Do we really need to pretend that they are the fruits of self-regulation for the benefit of the public?
I do not yet have a final view on all this but I do think the time for real debate and cool thinking has arrived.
Either the council leads the profession as it should, and not as a trade union, or it comes to the conclusion that the current pressures upon the profession are such that it is no longer possible to ride the two horses comfortably.