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
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