The Review of the Regulatory Framework for Legal Services in England and 
Wales

      Response from the Campaign for the Reform of the      
               Office for the Supervision of Solicitors

Introduction
Rule 6 of The Solicitors' Practice Rules 1990 lays down strict 
guidelines for the avoidance of conflicts of interest. Yet the Law 
Society itself is guilty of the most blatant conflict of all; it acts as 
both regulator and representative for its members when those two 
functions are clearly irreconcilable. As a result the representation of 
solicitors has become secondary to the Society's duty to regulate.
The principle of self-regulation may have been an attractive 
characteristic for a professional body when the Law Society was given 
its Royal Charter in 1845 but such a system has no place in the days of 
improved accountability and transparency of the twenty first century.
Whilst the protection of the public remains inevitably and obviously 
paramount, solicitors themselves need protection from their own 
professional body.
There are three particular areas which demand an immediate review in 
order to make the Law Society's statutory powers compliant with the 
Human Rights Act 1998 namely the processes of decision making, the 
Solicitors' Disciplinary Tribunal and the statutory power given by the 
Solicitors' Act 1974 to intervene into a solicitors' practice.

Decision Making
The Law Society currently makes decisions pertaining to a solicitor's 
conduct through a labyrinth of internal procedures involving 
caseworkers, adjudicators and committees.
The Solicitors Complaints Bureau, the Office for the Supervision of 
Solicitors and now the Compliance Directorate, all of which are funded 
by the Law Society, has made important decisions which affect the 
livelihood of a solicitor and his or her family often without the 
solicitor having the opportunity to answer or even comment upon the 
allegations in person or even, sometimes, in writing. The absence of any 
right to make oral representations is manifestly unjust and , in the 
light of a right to a fair hearing which is now enshrined in statute, 
illegal. To a greater or lesser extent practically every firm of 
solicitors, either inadvertently or otherwise, breaks one or more of the 
Practice Rules in some respect at some time. Many of the present Rules 
are vague and capable of wide and variable interpretation. It is not 
difficult for an investigation to find a breach of a Rule somewhere. The 
Law Society, no doubt with its own targets to reach, can effectively 
choose which solicitor(s) to prosecute and when.
A combination of a lack of resources to monitor large practices and the 
desire to demonstrate its presence and its effectiveness to the public 
results in small firms becoming the main target. The Society is quick to 
publicize its actions, often in a style which belittles the solicitor.
Moreover the Society's powers are often used by external authorities who 
influence such decisions which further demonstrates the Law Society's 
lack of independence and unwillingness to protect its members.
Within the system there is great inconsistency. There is evidence that 
serious breaches of professional rules are not always prosecuted whereas 
relatively minor infringements often are.
There are many accusations that the Law Society's investigators, who are 
almost invariably unqualified, are over-zealous and even aggressive in 
their work. Impartial policement cannot emerge amongst those whose 
salary and status flow directly from the targets of surveillance.
The Law Society's regulation of solicitors has become bureaucratic but 
the cost is passed back onto the profession resulting in escalating 
practising certificate fees. In New York, for example, the cost of a 
practising certificate is approximately one fifth of the cost of a 
certificate in England and Wales.
The Solicitors' Disciplinary Tribunal
Matters of more serious professional misconduct are referred to the SDT 
by the Law Society which not only makes the rules but administers the 
Tribunal for interpretation of them by recruiting and remunerating its 
staff and appointing prosecutors. Despite the fact that the burden of 
proof for the prosecutor should be 'beyond reasonable doubt' the 
conviction rate is 98.5%. In reality it is neither an independent or an 
impartial tribunal as required by the European Convention on Human 
Rights.
There is evidence that the SDT sends its Findings in draft form to the 
Law Society for approval before sending them to the respondent 
solicitor.
The proceedings are quasi-criminal yet the respondents have fewer rights 
than those charged with criminal offences despite, in many cases, having 
more to lose.
Interviews with solicitors by the Society's so-called 'investigation 
accountants' are admitted in evidence despite them not being conducted 
under caution.
Legal aid is not available which means that respondent solicitors, 
sometimes with no experience of contentious work, are forced to 
represent themselves against the unlimited specialized resources of the 
prosecution. There is only one trial centre, in London, to which 
respondents must travel from all corners of the country having sometimes 
lost their livelihood beforehand.
There is no effective right of appeal because as a matter of policy the 
High Court rarely interferes with SDT decisions.
The body which makes rules for the profession should no longer be the 
body which implements and interprets those rules.
Interventions
Under the Solicitors Act 1974 the ultimate sanction where a practice is 
accused of some form of professional misconduct is to close the firm 
altogether with negative consequences for the public and the profession 
and disastrous ones for the solicitor(s) concerned who are thereby 
automatically suspended from practice yet invariably without any 
experience in any other field of work. There are presently only two 
grounds for such a draconian step; either a mere suspicion of dishonesty 
or any breach of the Solicitors' Accounts Rules. Between 80 and 100 
firms are dealt with in this way each year at an estimated cost to the 
profession of ten million pounds.
The decision to administer an intervention, a form of remedy which is 
unique to England and Wales, is often taken by single members of the Law 
Society to whom power has been delegated. There is often no opportunity 
for the solicitor to put forward his case before action is taken and 
although the current legislation enables him to make an application to 
the High Court within 8 days for an order that the intervention be 
withdrawn in reality this remedy is illusory since no solicitor among 
the five per cent or so who try has ever succeeded.
Any solicitor making such an application will not know the specific 
allegations which are leveled against him and must therefore try to 
anticipate such allegations in his supporting evidence. There cannot be 
many forms of litigation in any civilized legal jurisdiction where one 
party is disadvantaged in this way.
The very nature of an intervention is that it is devastating to the 
solicitor(s) concerned. His office is closed, his possessions are 
removed, his accounts are frozen, his staff made redundant overnight and 
he becomes prima facie liable for the Law Society's solicitor agent to 
administer the distribution of client files, the destination of which is 
not disclosed to the defaulting solicitor(s).
The solicitor's right to dispose of his practice was unilaterally 
removed in December 2001 without any consultation with the profession. 
Clients' documents are thus removed from a place of their choice to a 
place which is not of their choice, often some distance away. In the 
process of removal files often become misplaced.
Clients' affairs can come to a standstill. The effect is particularly 
damaging to those who have monies standing to their credit in the 
defaulting solicitor(s) client account.  Sometimes such clients are mid-
stream in litigation having paid monies on account of costs which they 
find difficult to replace when their new solicitor requires it. Often 
they will be conveyancing
clients whose transactions cannot proceed or at the very least may be 
delayed at
their cost as a consequence of the intervention.
The process of recovering such monies from the Law Society which has set 
up a
Compensation Fund for this purpose can become cumbersome and time 
consuming.
Payments from the fund are discretionary. The applicant must show that 
the solicitor
has either been dishonest or has failed to account to them when in fact 
neither
scenario may be true. The Law Society makes no attempt to trace clients 
who do not
make claims thereby realizing a profit in many instances.
Intervention agents' charges are another highly contentious issue. 
Despite assertions
to the contrary the Law Society does not scrutinize its agents' invoices 
adequately or
in many cases at all. Commonly the invoices themselves lack sufficient 
detail for
scrutiny. Until a Court of Appeal decision in 2002 the defaulting 
solicitor had no right
to a detailed assessment of such bills under section 70 of the 
Solicitors Act 1974.
The right which now exists can be curtailed by the Law Society holding 
on to the
bills for a period of one month before passing them on to the solicitor 
from whom an
indemnity is sought.

There is no consistency in terms of the duration of an intervention and 
no definition
of its ending. Some last only a few weeks, others for several years. 
Intervention
agents' fees range from a few thousand to hundreds of thousands of 
pounds and the
Law Society's policy of aggressive recovery often results in the 
bankruptcy of the
paying solicitor thereby piling further misery on top of his or her 
other significant
problems. The personal consequences often go on to include personal 
relationship
difficulties and even illness.
It is conceded that in rare circumstances prompt and effective 
regulatory action is
required. The death or serious illness of a sole practitioner or the 
abandonment of a
practice must of course justify the involvement of a professional body 
but an
effective alternative to contentious interventions needs to be found 
urgently.
One suggestion has been the appointment of a Receiver to administer the 
winding
down of the practice and to safeguard at least some of the defaulting 
solicitor(s)
interests but this has been dismissed by the Court of Appeal in the 
light of the 1974
Act.
If interventions are to remain then the two aforementioned grounds upon 
which they
can be based should be scrutinized. The public would have no less 
protection if the
Society had to have actual evidence of dishonesty rather than a mere 
suspicion or if
the Account Rules breaches needed to be significant or substantial 
rather than just
technical.
Moreover, in view of the seriousness of the consequences the Society 
should be
compelled to apply to the High Court with supportive evidence for an 
injunctive
freezing order. At least the solicitor will then know precisely what is 
alleged against
him. In urgent circumstances an interim ex parte order could be sought.
Intervention agents' charges should be limited, fixed or capped.
Interventions in their present form are widely regarded by counsel, 
including leading
counsel, not to be Human Rights Act compliant.
Conclusion
Although the terms of reference of the current review are extremely wide 
it
represents the best opportunity the legal profession has had for many 
years to pull
itself by its black gowns into the twenty first century.

The medical profession is a useful guide to us with its separate 
regulatory and representative bodies.
In the interest of justice the present system of the regulation of 
solicitors cannot be
allowed to continue. The Solicitors Act 1974 which gives the Society its 
powers is
simply too one sided and primary legislation is urgently needed to 
redress the
balance. Although the plight of solicitors with professional 
difficulties attracts little
public sympathy, a society which purports to care for all of its members 
would
encompass a more balanced regulation of its professionals.
The regulator itself now requires regulation.
3rd June 2004
Michael Harvey
CROSS
74 George Street
Luton
LU1 2BD
Tel:(01582)458567
Fax: (01582)456725


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