Rogers: what goes around comes around
Posted by Brian Rogers, director of regulation and compliance services at Legal Futures Associate Riliance
The Solicitors Regulation Authority (SRA) recently published data showing a 47% increase in the number of solicitor-on-solicitor complaints received in 2013 (2,698); it also provided data that showed a four-fold increase in the number of self-reports made (1,019).
It is worth noting that the solicitor-on-solicitor complaints were part of a total of 12,000 complaints received by the SRA, which suggests that a significant number of firms will be on the SRA’s risk centre radar for one reason or another.
The number of self-reports, which includes whistleblowing by staff, also indicates that staff are taking their compliance responsibilities seriously.
Law firms have a duty under the SRA Code of Conduct to report misconduct, whether it relates to internal misconduct or the conduct of others outside the firm, so much of the reporting is likely to be attributed to COLP/COFAs who want to ensure they meet their obligations under the authorisation rules.
But could reporting a fellow firm be seen as a means of dealing with the competition?
I have come across a number of cases where firms have been the subject of visits by the SRA due to a report made by another local firm unhappy about the fact that ‘their’ client had been poached.
One case involved a firm that obtained a new client because they were on the conveyancing panel of the client’s mortgage lender; the client’s ‘normal’ law firm was not on the panel and therefore lost out. The losing firm was apparently so upset by the loss of the client that it made a report to the SRA alleging breaches of the referral code; this in turn led to an SRA investigation, with all the consequences that flowed from it, for example, having to report the investigation to insurers and other interested third parties, the loss of fee-earning time to deal with the investigation, etc.
Although most firms try to ensure complete compliance with the code of conduct, there will always be ‘known unknowns’ hanging around the firm; these are the issues/problems you know could exist but won’t know it for certain until the SRA visits, such as whether your interpretation of the code of conduct over whether a referral is legal or not is different to that of the SRA.
It is on this basis that most firms will want to avoid being the subject of an investigation, even though the SRA’s hard line modus operandi has changed from the old days.
Those firms perhaps contemplating the use the SRA reporting system for the wrong reasons should consider the unintended consequences of doing so. As the saying goes, what goes around comes around, and they themselves could end up being the focus of the regulator if they have not done what is expected.
However, every client of a solicitor has a right to make a direct application to the Disciplinary Tribunal, and it is not necessary to have the complaint dealt with in the first instance by the Law Society.