Posted by Duncan Finlyson, manager of Lawyers Defence Group
Legal Futures‘ revelation that the Solicitors Regulation Authority (SRA) has agreed that professional indemnity insurers will no longer have to pay the defence costs of solicitors facing disciplinary proceedings (see story ) is a major blow to those likely to face sanctions in the future. It provides proof, if proof were needed, of how out of touch with the profession the SRA can be and of the narrow view which it would appear to hold as to the concept of public interest.
To the cynical, the change to the minimum terms and conditions of insurance from 1 October 2010 could easily be seen as yet another example of the SRA attempting to increase the ease with which it can sanction solicitors – by depriving them of the ability to contest those sanctions. Even to those of us who are usually prepared to give the SRA the benefit of the doubt, it is an example of how little the SRA appears to know, or apparently care, about the problems and pressures which face many of those in private practice.
Apparently the SRA regards the change to the minimum terms as “trivial” in the wider context of the minimum terms. For many firms who have had disciplinary proceedings brought against them, or who find themselves subject to investigation or inquiry, rather than trivial this will be the final nail in their coffin.
Often, the existence of the cover is a solicitor’s only chance of defending proceedings or preventing himself or herself from ceasing to be able to practice. Many of those who find themselves subject to investigation are not in a financially strong position – indeed it can be their financial problems that have led to them being in a situation where they have become subject to investigation or disciplinary proceedings.
The SRA’s financial protection committee was apparently unable persuade itself that this was an area where mandatory insurance could be justified in the interests of consumers. Presumably, that means that it is in the interests of the consumer that a solicitor who has mistakenly been accused of misconduct should be struck off because he cannot afford to defend himself. Presumably it is in the interests of the consumer that a person’s livelihood should be taken away because he is unable to afford to protect his position.
The SRA consoles itself with the fact that it would be open to solicitors to negotiate with their insurers to have such cover included. I am sure that most of the firms who might have relied on the cover, many of whom may be having difficulty getting cover in an increasingly difficult market, would relish the challenge of such negotiations.
Solicitors subject to investigation or proceedings will as a result be left in a less advantageous position to defend their livelihood than the criminal clients whom they may have represented in the past.
The increasing vigilance of the SRA means that many more firms are finding themselves subject to disciplinary proceedings. It is inevitable that not all of those investigations and disciplinary proceedings will be properly brought or that many may be as a result of over-zealousness on the part of the SRA.
However, it is not just the fact of the change – it is the lack of any form of consultation or notification that is really going to upset many in the profession. Try as I might, I have been unable to find any reference online to these changes having been proposed or discussed.
Unlike many professionals, such as doctors and dentists, solicitors do not have an effective union that can help them to resist allegations of professional misconduct. Many will be on their own and acting for themselves in an arena where they do not have appropriate skills and expertise. Without the ability to instruct experts to represent them before the Solicitors Disciplinary Tribunal or in relation to the imposition of practising certificate conditions, then many will find that they have been unjustly prevented from practising.
If the profession is to lose the benefit of clause 1.2 of the minimum terms, then it is going to need to think seriously about other ways of providing cover for those who are subject to disciplinary actions and sanctions – for example a defence union of a similar kind to that provided by the Medical Defence Union.
This would be especially useful if it were able to extend its terms of reference to provide assistance and representation to employees facing disciplinary or other interviews with employers. Many solicitors have contracts of employment allowing them to bring a colleague or union representative with them to such a hearing, despite the majority of solicitors not belonging to any union.
A solicitors’ defence union providing funding for the defence of regulatory proceedings would undoubtedly be a difficult beast to fund. The costs would have to be spread widely for it to be financially viable. There would undoubtedly be strong arguments put forward by many that they should not have to fund those who choose to break the rules or who are unable adequately to manage their businesses. Those arguments are, I believe, becoming harder to sustain, especially in the light of the recent news about Halliwells.
So perhaps now is the time for solicitors to put aside their differences and start to look seriously at acting together through a union. After all, who knows where misfortune will strike next?
Lawyers Defence Group is a Legal Futures Associate