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SRA decision to hold board meetings in private “may breach Legal Services Act”

Bennett: crucial credibility test

The decision by the Solicitors Regulation Authority to close its meetings to public and press scrutiny [1] appears to be contrary to its obligations under the Legal Services Act 2007 (LSA), a leading regulatory solicitor has said.

The SRA is facing a “crucial credibility test” as it is required by the Act to be “transparent” and “accountable” in each of its regulatory activities, and also to apply good regulatory practice, said Paul Bennett, a professional practices partner in the Shrewsbury office of Aaron & Partners.

The SRA has been heavily criticised by the media for the decision.

He told Legal Futures that the SRA’s current executive team at the SRA has done “a huge amount of good work” – it has “some great ideas to support innovation in the profession, with the occasional awful one, but engage openly with the profession”.

He also praised the individuals and operational teams he dealt with on a day-to-day basis at the SRA. “They are highly professional, are keen to do the right thing and, crucially, on sensitive issues to my clients, to be seen to do the right thing.”

Mr Bennett, former chairman of the Law Society’s small firms division, continued: “On this basis the new lack of transparency from the board is a concern. Good regulation carries the confidence of the profession, and the public, and why the SRA thinks its work is more sensitive than say the General Medical Council or Health & Care Professions Council is unclear and difficult to justify in my opinion.

Section 28 of the LSA requires that regulators “must” comply with this section, which includes obligations to be “transparent” and “accountable” in each of its regulatory activities, “which would include its own decision making to promote public interest and it in obligations to the profession including rule making”, Mr Bennett said.

“In my view not being fully transparent with the press, the profession and consumers is potentially unlawful and the SRA risk someone challenging the board’s decision before the courts to ensure the SRA is open and transparent in its actions.

“Section 28 also requires the SRA to have regard to ‘best regulatory practice’ and closing the doors to its board and its public interest-focused decision-making is difficult, perhaps impossible, to justify against the legal obligations arising from the LSA.

“In particular the transparency of other regulators now put the SRA as not only incompatible in terms of enforcement, which is a long held weakness of the SRA whose disciplinary processes are more onerous, but in terms of a lack of transparency with comparable regulators.”

Mr Bennett said the SRA also appeared not to have considered the Regulators Code – to which it is a signatory – which requires regulators to “ensure that their approach to regulatory activities is transparent”.

He added that the “disconnect” between the SRA board’s approach on to transparency and “its expectations on solicitors, law firms and compliance officers in particular is stark”.

“At a time when the SRA seeks full independence, rather than merely operational independence, from the Law Society, it is risk the SRA board needed not to take and risks damaging its credibility as a regulator which within the solicitors’ profession it is yet to achieve in many aspects.”

Mr Bennett concluded: “Much of what the SRA does is well intentioned, appropriate and done well. However, the overzealous enforcement and the consistent lack of transparency in its actions is a concern and the SRA board has elevated existing concerns [with this decision].

“The SRA board faces a crucial credibility test on this issue: Does it recognise its own misjudgement and will it report it to the profession by reversing an obvious error?”