The SRA’s latest power grab could turn the regulator into prosecutor, judge and jury, experts warn. Meanwhile the SDT, whose workload is already shrinking, would shrivel still further, reports Catherine Baksi
The low down
No court likes to see its decisions overturned. This was an embarrassment faced by the Solicitors Disciplinary Tribunal following its decision to sanction Ryan Beckwith in the developing regulatory area of sexual misconduct. But even though experts in legal regulation criticise the SDT over individual cases, there is a consensus that its proceedings are fair and transparent. So there is understandable alarm at the fining powers gained, and indeed further aspired to, by the Solicitors Regulation Authority, as the regulator displays an appetite to mark ever more of its own homework. Significant costs incentives for settling cases with the SRA on an ‘agreed outcome’ basis may also be keeping meritorious defences out of the tribunal.
High-profile cases and successful appeals have put the spotlight on the disciplinary regime for solicitors. The work of the Solicitors Disciplinary Tribunal (SDT), the independent body that adjudicates on allegations of misconduct, has also been put under the microscope. A mistake over the lease for its premises resulted in a call to increase its budget, followed by the resignation of its chief executive. Tensions between the tribunal and the Solicitors Regulation Authority have been exposed by the regulator’s call for increased fining powers – a move that would reduce the tribunal’s work. That call has also prompted concern from solicitors specialising in professional regulation that the SRA’s plans would reduce the fairness and transparency of the process and result in the regulator ‘marking its own homework’.
Few outside the profession had heard of the SDT before 2019, when there was intense media interest in the case of Ryan Beckwith. His alleged sexual misconduct with a junior colleague, after a day of heavy drinking that had included a team celebration, saw him fined £35,000 and £200,000 costs by the SDT.
In 2020, however, the High Court overturned the tribunal’s ruling that the former Freshfields Bruckhaus Deringer partner had brought the profession into disrepute. The court decided that the SDT had encroached too far upon the lawyer’s private life.
More recently, in another high-profile case last year, the SRA, which prosecutes disciplinary matters, agreed for the High Court to quash a tribunal ruling against former Capsticks solicitor Claire Matthews.
The SDT struck off the junior solicitor, who represented herself, after she left confidential documents on a train and initially lied to the firm about what had happened.
Matthews’ pro bono legal team obtained expert medical evidence on the impact of her mental health on her actions, in a case that highlighted concerns over the treatment of young lawyers and mental health issues by the tribunal and SRA.
Ultimately, the SRA decided that a rehearing of the case was not in the public interest. Matthews was reinstated to the roll, albeit with conditions on her practising certificate.
'I advise all my clients that the SDT is impartial and fair no matter what they are accused of'
Andrew Blatt, Murdochs Solicitors
Despite these landmark reversals, regulatory specialists perceive the processes of the tribunal, made up of 29 solicitor members and 19 lay members, to be fair.
Andrew Blatt, a professional discipline specialist at Murdochs Solicitors, in London, says: ‘I advise all my clients that the SDT is impartial and fair no matter what they are accused of.’
While many solicitors initially fear the litigation and trial process, he suggests that by the end most believe that they have had a fair trial, even when they disagree with the outcome.
Windsor Chambers barrister Marc Beaumont is also impressed by the SDT’s ‘fair and open-minded approach’, which he says is ‘attuned to human dynamics’.
In that context, specialist lawyers are concerned by what they see as a power grab by the SRA in seeking to increase its fining powers, which will reduce the number of cases dealt with by the tribunal.
Last year, the regulator successfully applied to increase the maximum penalty from £2,000 to £25,000. Subsequently, the government’s Economic Crime and Corporate Transparency Bill included a provision for the SRA to issue unlimited fines for facilitating economic crimes.
Then, in the wake of a Daily Mail sting exposing allegations of lawyers advising clients to lie to bolster their asylum claims, the regulator called for unlimited fining powers for all types of serious misconduct.
The SRA denies the accusation that it is seeking to park its tanks on the SDT’s lawn, insisting that the change will reduce costs for the profession. The tribunal will sit less often, and less serious cases will be dealt with more quickly and cheaply for those involved, it argues.
The Law Society strongly opposes the extension to the SRA’s powers, arguing that there is no evidence to suggest that its current fining powers are insufficient.
President Nick Emmerson tells the Gazette: ‘We are concerned that if such propositions were allowed, the SRA could become the investigator, prosecutor and judge, for the most serious types of misconduct.’
This, he says, ‘could potentially undermine the jurisdiction of the Solicitors Disciplinary Tribunal process which is fair, independent and transparent, and which has the confidence of the profession and the public’.
Emmerson argues that the tribunal is ‘the most appropriate jurisdiction to deal with the most serious cases of solicitor misconduct’, stating that it guarantees independence, transparency, objectivity and adequate safeguards.
In addition, he points out, it has much greater powers than the SRA, including the ability to strike off or suspend.
Watching the watchdogs
How legal services are regulated is once again under scrutiny. In the summer, umbrella watchdog the Legal Services Board announced a review of the enforcement and investigative tools available to frontline regulators. Reflecting the LSB’s view that existing penalties may be insufficient to deter ‘wilful and serious misconduct’, the review encompasses higher financial penalties, as well as enabling regulators to gather information and share intelligence to help them detect and address misconduct.
The board already reviews regulators’ disciplinary and enforcement processes and tools, in light of ‘weaknesses’ identified through performance assessments.
LSB chair Alan Kershaw said: ‘The public rightly expects that lawyers in England and Wales will uphold the highest professional standards and ethical conduct.’ The board has for some time ‘been concerned that a lack of effective fining powers among some regulators… may hamper their ability to tackle wilful and serious misconduct. We are anxious to ensure that regulators have the most effective tools available to identify and deal with such misconduct’.
MPs on the Commons justice committee will soon take evidence from the legal professional bodies and regulators. Next Tuesday it will hear from the Bar Council, the Bar Standards Board, the Chartered Institute of Legal Executives and CILEx Regulation, and on 5 December it will take evidence from the Law Society, the SRA and the LSB.
The committee, which last examined the regulation of legal services in 2016, will grill witnesses on matters including: performance of the regulators; professional bodies’ relationships with the regulators; the legal and institutional framework underpinning regulation; the role of regulation in supporting access to justice; how to improve the service provided to consumers of legal services; and the health of the professions.
Andrew Katzen, head of regulatory and disciplinary law at Hickman & Rose, expects that the regulator will ‘make swift and common use of its enhanced fining powers so that it deals with many more cases internally, without referring them to the SDT’.
While ‘no solicitor or law firm wishes to appear before the tribunal’, Katzen believes that the greater use of these internal discretionary powers could result in less transparency and concerns about the SRA ‘marking its own homework’.
Gregory Treverton-Jones KC, a barrister at 39 Essex Chambers and co-author of successive editions of The Solicitor’s Handbook, notes that the SRA has sought to widen its disciplinary powers ever since its 2007 inception.
When it was first created, the SRA had no independent formal disciplinary powers at all, but acquired statutory powers to fine.
'These powers mean that the SRA is prosecutor, judge and jury in its own cause – traditionally a recipe for unfairness and bad decision-making'
Gregory Treverton-Jones KC, 39 Essex Chambers
In addition, in relation to firms set up as alternative business structures, instead of the SDT being the principal disciplinary authority, the SRA took that role. It has the power to fine entities up to £250m and individuals within them up to £50m.
Echoing the Society’s concerns, Treverton-Jones says: ‘These various powers mean that the SRA is prosecutor, judge and jury in its own cause – traditionally a recipe for unfairness and bad decision-making.’
He points to the fact that ‘little is known’ about the regulator’s exercise of its powers in practice, noting that ‘oral hearings do not seem to feature’.
Treverton-Jones favours ‘independent decision-making by an impartial tribunal’, particularly where an individual’s reputation and livelihood may be at stake.
Iain Miller, a regulatory partner at Kingsley Napley, suggests the SRA’s case for increased powers ‘appears to be that bad things are happening and therefore it needs more power to deal with them’. But he questions whether the change would better serve the public interest.
Before any extension is granted, says Miller, the regulator will have to demonstrate that it has the investigation and decision-making processes that would support such powers. He believes the regulator has ‘a lot of work to [do]’ before it is able demonstrate that it can properly exercise such draconian powers in the public interest.
Treverton-Jones also notes the difference in the way that the SRA and SDT calculate fines, with the former adopting a ‘mathematical formula’ in contrast with the tribunal’s use of guideline bands. ‘This entire bifurcated disciplinary structure seems to me to be illogical and unfair,’ he says.
Treverton-Jones also contends that the current system gives the SRA enormous de facto power because solicitors have a strong commercial incentive to reach an agreement with the regulator rather than contest allegations.
Solicitors acquitted at the SDT, he explains, are unlikely to recover their costs from contesting the case, and so will ordinarily be financially better off by entering into an agreed outcome.
Rules introduced in 2019 reducing the standard of proof from the criminal to the civil have further stacked the odds against solicitors, nudging more to an agreed outcome.
So what could the future hold in store for the tribunal? Says Miller: ‘It would be reduced to hearing cases that might lead to a suspension or strike-off and appeals from SRA decisions.’ The debate is too focused on the regulator’s position rather than the public interest, he adds.
If the SRA were to be granted even more powers, Miller suggests that it would be sensible for the tribunal to take on the role of supervising the regulator’s decision-making, through a wider appeal jurisdiction or having a formal role in this regard.
There is ‘some logic in the SDT taking on appellate roles in relation to the other approved regulators which would lead to a consistency of approach’.
Weightmans partner Susanna Heley says the SRA’s bid for increased fining powers is a ‘distraction’ from the real issues. She cites the lack of trust that the profession has in the regulator and the summary nature of its published decisions. Another key problem, she says, is the climate of fear which deters solicitors who have erred from admitting the fact.
Having reviewed all the decisions made by the SRA and SDT in the last year, Heley observes a ‘sad trend’ in the high number of solicitors sanctioned as a result of drink-driving offences. ‘For there to be such a persistent core says something about the state of the profession and how people are coping in it,’ she says.
The SDT itself is not beyond criticism, of course. Last year, following its landlord’s withdrawal of the offer of a 10-year lease of its current premises in London’s Farringdon Street, it was forced to ask the Legal Services Board for an extra £1.1m – a 34% increase in its annual budget.
A fortnight after revealing that it was being evicted, the SDT announced the resignation of chief executive Geraldine Newbold, who had been in post for more than four years.
A paper presented to the LSB for approval of the coming year’s budget revealed that the SDT had applied for a significantly reduced sum – £2.52m – 41.3% down on 2023.
Excluding exceptional expenses relating to its relocation, the report shows that on a ‘like-for-like basis’, the tribunal’s costs will still be down by 19.5% next year.
The application states that the reduction ‘reflects the SDT’s efforts to deliver value for money’ and is driven in particular by savings to ‘building and staff costs’. But lawyers suggest that the fall is linked to the declining number of cases expected to be dealt with by the tribunal as the SRA’s purview widens.
The SDT expects to receive a maximum of 108 cases in 2024 and to require 260 sitting days. For 2023 it initially forecast that it would need 270 sitting days, which later fluctuated before settling on 262 days.
Caseloads have fallen from 136 in 2021 and 118 in 2022, with the tribunal sitting for 239 days in 2021 and 180 the following year. The SDT has concluded that its current five courtrooms and staffing area are ‘surplus to requirements and [do] not provide best value for money’.
By the end of 2023, the tribunal is expected to announce a lease for new accommodation, with ‘one large courtroom which can be split into two court rooms’.
Speaking to the Gazette, Deborah Baljit, who took over as chief clerk and chief executive of the tribunal in July, denied its lower caseload and diminished premises are ‘aligned to a reduction in work’.
Rather, she insists that they are ‘borne out of a root-and-branch look at the organisation in 2023, looking at working in innovative, more hybrid ways that would provide more value for money to the profession and public’.
The pandemic, which saw the tribunal switch overnight from in-person to remote hearings has, says Baljit, changed the way that the SDT works. It simply needs less physical space.
‘We have completed on the lease for our new premises and the fit-out is currently under way,’ she adds. ‘We are remaining in the same area of London and will be announcing the details in due course.’
Stressing that there will always be a place for in-person hearings, Baljit says that remote hearings are more transparent as there is no space restriction, enabling wider attendance by the press and public.
While the tribunal ‘robustly opposes’ the SRA’s bid for increased fining powers, Baljit insists that the two bodies have a ‘positive and healthy relationship’. They collaborate through monthly, virtual meetings.
The tribunal, she states, is ‘committed to open justice, due process, transparency and access to justice’. Baljit believes that the most serious cases of professional misconduct should always be dealt with by the SDT in public. It plans to respond to the SRA’s bid for new powers in due course.
Catherine Baksi is a freelance journalist