Whitmarsh: SRA should do less and do it better
The Solicitors Regulation Authority (SRA) has been told to leave employment issues such as bullying, harassment, discrimination and sexual misconduct to law firms and the courts.
Birmingham Law Society urged the regulator “to do less and do it better”, including stronger triaging of reports to ensure that “spurious or vexatious complaints are dismissed at an early stage”.
Cary Whitmarsh, chair of its professional regulation committee, said: “The committee is firmly of the view that that the SRA should do less and do it better by focusing resources on the areas of greatest risk to consumers and to the rule of law, rather than expanding into areas outside its core remit.”
Birmingham Law Society is the country’s largest local law society, with 9,000 members, and the letter to SRA chief executive Sarah Rapson follows the vision for the future that she set out last month.
She highlighted four priorities: operational excellence, improving collaboration, proactive identification of risk, and a focus on big issues.
Mr Whitmarsh, head of compliance at Trowers & Hamlin, acknowledged the “significant” challenge ahead for the regulator, including the need to address the perception that the SRA was “a draconian organisation lacking understanding or empathy for hard working legal professionals”.
Backing the focus on the big issues, the committee agreed with Ms Rapson that the SRA’s assessment threshold test needed to be reviewed.
“We think that the SRA does not do enough to triage complaints made about solicitors or firms, so that spurious or vexatious complaints are dismissed at an early stage.
“We have noted an increase in firms reporting one another in litigation matters as a way to ‘weaponise’ the proceedings. This is becoming a common tactic to create leverage, and the SRA needs to act to discourage it.”
The committee argued that firms should only report to the SRA “serious breaches of the regulatory obligations”, supported by training and guidance for compliance officers “so that they have the confidence to deal with matters appropriately”.
Mr Whitmarsh went on: “The committee is strongly of the view that that the SRA should leave employment issues such as bullying, harassment, discrimination and sexual misconduct to be dealt with by firms and appropriate courts or tribunals.
“These investigations are resource heavy and, more often than not, result in ‘no further action’. This is usually because of the reluctance of complainants and witnesses to become involved in another investigation by the SRA following an internal investigation by the firm.
“The SRA should not be required to act as a supplementary employment tribunal. It is a waste of both the SRA’s and the profession’s resources.”
However, firms should remain under a duty to inform the SRA of the outcomes in serious cases so that it could consider enforcement action, he said.
Mr Whitmarsh said the committee also agreed with Ms Rapson that the SRA has been too reactive in addressing risks.
“We have seen in the past the SRA seeking to expand its regulatory remit into areas that have moved up the political or media agenda. For example, SLAPPs, NDAs, sexual misconduct and issues relating to equality, diversity and inclusion.”
Instead, the SRA should focus on the rule of law and proper administration of justice, maintaining high professional standards, and protecting clients and consumers.
The latter should focus on the protection of client money. “The current accounts rules are inadequate to properly protect client money,” Mr Whitmarsh wrote.
“We think that the SRA should introduce technology to assist with financial analysis to assist its people to take appropriate and proportionate regulatory action. The financial health of a firm is often the most important indicator of regulatory compliance.”
As an alternative to investigations, the committee also called for the return of the practice standards unit – scrapped in 2021 – to visit firms and give guidance and support on conduct issues, and to act as a “valuable intelligence gathering tool”.
Where there were investigations, the SRA needed to be clearer from the outset about who and was were under scrutiny.
“In our experience it is too often the case that allegations of dishonesty and a want of integrity are made when there is no, or too little, evidence to support such an allegation.”
What about the cases where it is the Firm that is being reported to the SRA? My understanding is the SRA often takes action against the individual, concurrently with employment tribunal proceedings, but says it won’t do anything in respect of employee reports until the outcome of the tribunal proceedings. It’s a ridiculous double standard. Firms have also demonstrated repeatedly they are incapable of marking their own homework. We desperately need a regulator who is capable of getting a grip of this stuff.