Spooner: Highly unusual step

The Solicitors Disciplinary Tribunal (SDT) has made unprecedented public criticism of the Solicitors Regulation Authority over how it presented last week’s decision to fine US law firm Locke Lord a record £500,000.

The case involved the alleged involvement in dubious investment transactions of Jonathan Denton, a one-time partner, and his use of the firm to facilitate it.

In a statement, Andrew Spooner, who chaired the tribunal that heard the case, said: “I am taking the highly unusual step of explaining the background to our decision which has resulted in some erroneous coverage in the media which occurred before the publication of the tribunal’s judgment.

“For the public and the profession to have confidence in its regulators, it is essential that they act accurately and with integrity. This extends to comments/observations that they may wish to make in the media.

“Regrettably, it appears in this case that inaccurate and misleading quotations emanating from the SRA and/or one of its executive directors, David Middleton, have been made. None of these comments were seen or approved by the Solicitors Disciplinary Tribunal before their release. If this had been done, any inaccuracies could have been noted and corrected.”

Last Wednesday, the SRA held a media briefing about issues that had been before its most recent board meeting (now that such meetings are held behind closed doors).

As its notice of the Locke Lord ruling was due to be published at 2pm that day, Mr Middleton also briefed the three journalists present, including Legal Futures editor Neil Rose, on the case.

He suggested that the tribunal’s decision was a sign that it was “waking up to the importance of deterrence” over dubious investment schemes.

However, Mr Spooner – a previous president of the SDT – revealed that the SRA and Locke Lord had originally agreed a fine of £250,000, but that the tribunal rejected it, saying the figure “did not reflect the seriousness of the matter”. Mr Middleton did not mention this in his briefing.

The tribunal indicated that it considered £500,000 to be appropriate and a couple of weeks later it approved a revised agreed outcome of that amount.

An SRA spokesman said: “When speaking to the media on specific cases, we are always careful not to discuss anything that was debated in a private session at tribunal. In this instance, the Tribunal subsequently published details of those private discussions. 

“We have regularly warned solicitors about the risks and seriousness of becoming involved in questionable investment schemes. We proposed a fine that would have been the joint highest ever imposed on a firm. In all agreed outcome cases, the final decision rests with the tribunal.”

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