Decisions, decisions, decisions: Referrals to the SDT

In November 2015, the Solicitors Disciplinary Tribunal (SDT) budget was increased following a 69 per cent rise in cases. Has the legal profession had a collective rush of blood to the head? I very much doubt it, but there must be some reason for this apparent increase.

One possible explanation might be the process by which matters are referred to the SDT. It used to be that following an investigation a report was produced and the solicitor was asked to respond to the report and related allegations. There was then lengthy correspondence in respect of the matter before a further report was put to an adjudicator or an adjudication panel, who decided whether or not to refer the matter to the SDT. This report was disclosed to the solicitor concerned, who had the opportunity to make further representations prior to a decision being made. There was also the possibility of appealing that decision. In some cases there could be years between the commencement of an investigation and the final decision to refer a solicitor to the SDT. It has to be said that this process was far from perfect - a dishonest solicitor might accept that they were going to be struck off but delay as long as possible if they could continue to benefit financially from their misconduct.

Authorised officer decisions

In the last few years the process has changed, and changed quite dramatically. When the investigation has been concluded, the case worker still writes to the solicitor, disclosing the investigation report and asking the solicitor to respond to the allegations. Once the response has been received, it has been our experience that the case worker will not enter into any further correspondence. This has been the case where we have raised issues in relation to factual inaccuracies in reports or made offers in respect of a regulated settlement agreement. The case worker then prepares an internal memo for an authorised officer (an employee of the Solicitors Regulation Authority (SRA) with delegated authority to refer matters to the SDT), who decides whether or not to refer the matters to the SDT. The memo prepared by the case worker for the authorised officer is never disclosed to the solicitor under investigation and there is no appeal against their decision.

In response to a Freedom of Information request concerning decisions to refer matters to the SDT, the SRA provided the following data on 30 November 2015:

*Year to date

While the figures show a rise in the total number of referrals to the SDT and that the majority of decisions are made by an authorised officer, it is still difficult to extrapolate anything meaningful from the data. This is because in response to the Freedom of Information request the SRA made two interesting statements.

First, it said that the data provided did not give 'a complete picture of all referrals to the tribunal. This is because the SRA has not got the type of decision maker recorded on its system for every referral', which suggests that some proceedings are being issued at the SDT without there being a clear audit trail to show how the matter reached the point of prosecution.

Second, in its response to the request for the number of cases where the authorised officer did not follow the case worker's recommendation to refer the matter to the SDT, the SRA stated it was unable to provide this data as 'data is only entered when the decision is made and the SRA does not hold data where a recommendation is not followed'. The decision not to follow the case worker's recommendation and not to refer a matter to the SDT is every bit as much a decision as a decision to refer a matter to SDT. The absence of this data does beg the question of how the SRA monitors the quality of the case working and authorised officer decision-making process.

No 'one size fits all' solution

The longer process for referral to the SDT had its faults and so does the current process.

The SRA will no doubt be keen to point to key performance indicators demonstrating that it has reduced the time between the commencement of an investigation and referral to the tribunal, and kept costs down. At the same time, though, the costs of running the SDT have increased.

It appears to me that the problem here might be that there is no 'one size fits all' solution.

My view has always been that the overwhelming majority of the profession are compliant. Of those who do not comply, the majority do not present a significant risk to the public interest. While I do not condone it (others work hard at and incur the cost of being compliant), it is fair to say that some non-compliance could rightly be described as low level or inadvertent.

There is, however, a small number who do represent a real threat to the public interest, clients, and the profession generally. They are also a burden on the compensation fund. If the SRA were able to satisfy the profession that it could distinguish between those who need - for want of a better description - a clip round the ear and those who need to be removed from the profession as a matter of urgency, then maybe we could move on to have a sensible discussion about increasing the level of sanction the SRA could impose without recourse to the SDT.

It is noted that following the publishing of a report by the Insurance Fraud Taskforce, the SRA endorsed the suggestion that the burden of proof at the SDT should be reduced from 'beyond reasonable doubt' to the 'balance of probabilities'. Does it have to be one or the other? For a breach not involving dishonesty, where the likely sanction is a £5,000 fine, is the balance of probabilities acceptable? If the breach involves dishonesty, or is of such a serious nature that the sanction could be striking off, ought the SRA not be required to prove such serious allegations beyond all reasonable doubt?

Nobody really wants to talk about investigations and the SDT, and that is quite understandable. The vast majority of the profession will never meet the lovely people at the SRA's Forensic Investigation Unit or have to make that trip to Ludgate Circus, home of the the SDT. Unfortunately, uncomfortable as the topic might be, it does need to be discussed, because one way or the other it is the profession that pays for it, be that through practising certificate fees, compensation fund contributions, or increased indemnity insurance premiums. It is a tiny minority that cause the vast majority of problems. How much would you be willing to pay to get rid of them? SJ

Martina Hogg is lead compliance consultant at Weightmans