Liverpool Law Bulletin December 2013 December 2013 | Page 18

Regulation

Regulation Update

The latest regulation news from Michelle Garlick of Weightmans
As the dark nights draw in, we reach
the end of 2013 and take a moment to
reflect on what a manic year it has
been for the profession and a sobering
end for those firms who were unable
to find professional indemnity cover
and who are having to wind down. I
am sure I am not alone when I say
that I hope 2014 is more uplifting and
that the legal profession will dust itself
off and come back fighting.
Don’t become too focused on
compliance with LASPO
Six months on from the
implementation of the referral fee ban,
the SRA issued a warning notice to
personal injury firms based on its
findings from supervising compliance
with the new rules. The concern is
that a number of firms are
concentrating solely on compliance
with the primary legislation and
forgetting to ensure that their
arrangements must also comply with
the Code of Conduct and the SRA
Principles.

A worrying trend is for CMCs to
charge claimants a proportion of their
damages in return for being pointed in
the direction of a suitable law firm. The
law firm is then asked by the CMC to
either make arrangements to deduct
their fee from the damages or to
forward the whole amount of damages
over to the CMC for it to deal with.
Such arrangements, as well as having
the potential to fall foul of LASPO,

carry the risk of breaching the
Principles and Outcomes contained in
the Code of Conduct such as the
requirement to act in the best
interests of the client, deal with
conflicts appropriately and obtain the
relevant client consents to any
deductions.

I echo the SRA’s concerns as we have
come across a number of poorly
thought out “back of fag packet”
schemes that fail to consider the full
range of issues. We have been able to
steer these firms in the right direction
but for those who have yet to fully
consider the SRA’s warning, you need
to do so sooner rather than later as
the visits are now taking place and in a
conference I attended recently,
Richard Collins of the SRA
commented that 2014 would be the
year of enforcement for those firms
breaching the ban.
All for one and one for all
Well maybe not exactly but 2014 will
see us a step closer to finding out
what the future holds for the
regulation of the profession. By way of
a reminder …back in the autumn the
Law Society, in its response to the
MoJ’s call for evidence on the
regulation of Legal Services in England
and Wales, set out its vision for the
future and made it clear that it saw no
benefit to be gained from creating a
single independent regulator to
oversee the professions. It argues that

the expense of creating such a beast is
prohibitive along with the practical and
financial consequences for firms that
will result from the inevitable creation
of yet another set of regulatory
changes for them to absorb.

Whilst the Law Society may have made
some valid points about the pace of
change witnessed by legal professionals
over the past 10 years its submissions
were slammed by the wider
community and in particular the SRA.
The SRA, whilst not calling for a single
regulator, calls for one that stands out
as truly independent from both the
profession and parliament and holds
back no punches when it comes to
describing the current model with its
eight approved regulators as outdated
and fragmented. What is clear is that
over the next 12 months we all need
to watch the regulatory landscape very
carefully. The Clementi report and
subsequent passing of the Legal
Services Act 2007 have started a
catalyst that will change the profession
forever and it is only those firms quick
enough to keep pace that will survive
to represent the profession in the next
decade.
The consultation remains open and if
you have any views on how you want
to be regulated, now is the time to
speak up.

Data Deadline Looms
How are you getting on with collecting
the requisite diversity data from your
workforce? Remember the deadline
for submitting your firm’s diversity
data to the SRA is 31st January 2014,
which may sound a long way off but
once the dust from th R