Liverpool Law January 2014 January 2014 | Page 18

Regulation Update 18 Regulation Here we are at the start of a new year which, given the excitement of the last quarter, shows early promise of being just as unpredictable and action packed as we have come to expect. The Law Society has had little down time over the holiday season and starts the year licking its wounds as it recovers from the drama of the Special General Meeting on 17th December where Nicholas Fluck and Des Hudson were held to account for their representation of the legal profession in discussions with the justice secretary. Without a shadow of doubt the legal aid debacle will inevitably continue to create many headlines over the next 12 months as criminal lawyers fight for survival. This month, rather than just reviewing recent developments, I will offer some of my views on risk and regulatory issues which firms may have to face this year: New Years resolutions for the SRA What better way to start afresh than with a completely new cast of characters to take centre stage. Paul Philip, will have the eyes of the regulated profession on him when he takes the floor in February as Chief Executive and it will be interesting to see whether or not he sticks to the same script as his predecessor or if he embraces the opportunity he has to establish his credibility by answering the SRA critics and shaking the profession out of its apathy towards its regulators. No doubt the SRAs Risk Outlook for 2014, when published, will give us all some food for thought. The referral fee ban in 2014… It is no surprise that the referral fee ban and its consequences continue to rumble on into January. Towards the end of 2013 the SRA announced that it had “engaged” with 45 firms and launched forensic investigations into 10 of them as a result of its probes into referral fee ban breaches. Putting aside for a moment the fact that a forensic investigation can take a considerable amount of time, it is questionable how accurate a snap shot this latest step by the SRA will give us of the level of compliance across the sector. It will be interesting to see how the regulator flexes its muscles over the course of the year - I have Richard Collins’ comment at a conference I attended in November 2013 that “2014 will be the year of enforcement” ringing in my ears! What happened to separation of powers? So, what does everyone think about the SRA’s proposal that it be given the power to increase the fines it can place on traditional law firms to bring the penalties available to it in line with those that can be imposed on an ABS? At present the SRA can only impose fines of up to £2000 on traditional law firms. If it envisages that a more serious penalty is appropriate then it has to refer the matt