SRA planning 'more intrusion' into law firms in wake of SSB debacle

The Solicitors Regulation Authority is to consult on new powers to delve further into the workings of law firms in the wake of the SSB Law failure.

Firms may be questioned on the types of work they do, their reliance on certain practice areas and arrangements with litigation funders. The SRA also wants more direct contact with managers rather than compliance officers, to get a better grip of what is happening behind the scenes.

The Legal Services Board last week reported that the SRA had failed to protect clients of SSB Law, who were signed up for no win, no fee cavity wall insulation claims but later pursued for legal costs. The LSB report found the SRA did not act effectively on more than 100 reports relating to SSB, but the solicitors’ regulator believes the scandal has highlighted the need for it to collect and store more data.

Paul Philip, who retires as chief executive next week, told the annual compliance conference on Tuesday that the SRA is asking whether it should be ‘more intrusive’ and change the way it regulates. ‘One of the decisions of the SRA is we don’t know enough about law firms – the work they practise in or certain metrics,’ said Philip. ‘In order to identify more risks and patterns, we need more data. Perhaps we will be asking better questions and demanding better information from those firms.’

The SRA stressed it does not want to make regulation more onerous, but will home in on areas considered high-risk. Philip said this included, but was not limited to, conveyancing, immigration and consumer claims. ‘We need to do something proactive, which is more inspections to deal with these risks before they happen,’ he said. The regulatory response would be ‘much more penetrative’ as a result.

However, the barrister referred to anonymously in the LSB report who complained about SSB Law to the regulator has said that data was not the problem identified. She told the Gazette: ‘The regulator had abundant data, repeated intelligence, and multiple red flags. What failed was not information – it was leadership.’