The 12 days of legal regulation
By
Michelle Garlick offers a Christmas-themed review of the events of the year – and what to look forward to in 2017
This year the world has given us Brexit and Trump, while the celebrity grim reaper has had a busy time too. But what have our regulators given us in 2016? Here’s a review in true Christmas style:
On the first day of Christmas, the SRA and Law Society gave to me – a battle over independence (which will continue into 2017 and beyond).
On the second day of Christmas, the Legal Services Consumer Panel gave to me – its report on opening up data in legal services, recommending that law firms should be required by their regulators to publish details of complaints and average prices on their websites. The SRA has said it will not be forcing firms to publish pricing information but is considering what additional data about firms it should be publishing.
On the third day of Christmas, the Competition and Markets Authority gave to me – its interim report on the legal services market, concluding that a lack of transparency over price and service was impeding competition in legal services. Watch out for digital comparison tools in the future.
On the fourth day of Christmas, the LSB gave to me – its vision for a future regulatory framework in England and Wales. According to Sir Michael Pitt, ‘a single regulator, covering the whole legal services sector and accountable to parliament, would be best placed to deliver improvement, deregulate, save cost, and act strategically’.
The LSB also gave the SRA – a ticking off in its overview report on regulatory standards and performance reviews over failures in its enforcement work, while also welcoming the ‘substantial progress’ the SRA had made since the first set of reports in 2012, and giving a warning that the overhaul of the handbook ‘may be too much’ for firms and the regulator to cope with.
On the fifth day of Christmas, the Olympics gave us – five gold rings (in fact, more medals than five and a fantastic performance by the British team over the summer).On the sixth day of Christmas, the Ministry of Justice gave to personal injury lawyers – a six-week consultation on proposals to reform whiplash claims and increase the small claims track limit.
On the seventh day of Christmas, the SRA gave to me – seven consultations: ‘A Question of Trust’, ‘Training for Tomorrow: Assessing competence’, ‘The Insurance Act 2015 and consequential changes to minimum terms and conditions of PII’, ‘Removing barriers to switching regulators’, ‘Looking to the Future: Flexibility and public protection’ (including proposals for a shorter, clearer handbook and allowing solicitors to practise in an unregulated business), ‘Looking to the Future: Accounts rules review’, and ‘A new route to qualification: The solicitors qualifying examination’.
On the eighth day of Christmas, the government gave to me – a register requiring all limited liability partnerships and limited companies to provide details of people with significant control.
On the ninth day of Christmas, the Legal Ombudsman gave to me – a decision not to become a certified ADR body (at least for the time being) and a call for evidence on proposed changes to its complaints scheme, including the introduction of a tiered system of case fees depending upon when the case is resolved.
On the tenth day of Christmas, the Solicitors Disciplinary Tribunal gave to the SRA – criticism in relation to its case preparation, the drafting of its allegations, and the quality of the evidence presented. It also gave to 75 solicitors – an order striking them off.
On the 11th day of Christmas, the SRA gave to me – 207 scam alerts and a warning notice on fraudulent investment schemes. The increase in cyber and scam attacks continues, with a Law Society report revealing that more than one in five law firms have been targeted by scammers in the past year, with money being successfully stolen from client account in 8 per cent of such cases.
On the 12th day of Christmas, the courts gave to me – two interesting cases on due diligence and anti-money laundering and the liability of solicitors in fraudulent transactions (Purrunsing v A’Court & Co (a firm) [2016] EWHC 789 (Ch) and P&P Property Ltd v (1) Owen White & Catlin (2) Crownvent Ltd t/a Winkworth [2016] EWHC 2276 (Ch)). They also hinted, in SRA v SDT and Arslan [2016] EWHC 2862 (Admin), that the civil standard of proof should be used in the SDT. The argument between the SRA and SDT over the standard of proof will continue to run for the foreseeable future.And in 2017, watch out for more developments and consultations on the handbook. Work on your data protection procedures will be essential to ensure you are ready for the General Data Protection Regulation in 2018.
Merry Christmas!
Michelle Garlick is a partner at Weightmans and head of the Compli team