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SRA makes several announcements that firms must take notice of
February 21, 2023

1. Introduction

Over the last few days, the Solicitors Regulation Authority has issued several announcements that the Law Society notes as having “far-reaching implications for solicitors”. We look at some of the most significant announcements and how firms can protect themselves and ensure they remain compliant.

2. Strategic litigation against public participation – SLAPPs

Concerns have continued to rise regarding those solicitors and law firms pursuing a type of abusive litigation known as strategic lawsuits against public participation (SLAPPs) on behalf of their clients. The term is now commonly used to describe the misuse of the legal system and the bringing or threatening of proceedings to discourage or prevent public criticism or action. Typically, these cases centre around privacy and defamation laws where an individual’s reputation is scrutinised. The regulator has released further bulletins, publishing guidance and warnings to the profession about SLAPPs and has made their intention to penalise firms pursuing this form of litigation clear. Failure to properly regard this warning notice will likely lead to disciplinary action. The SRA is investigating several cases where law firms might have been involved in abusive litigation, including SLAPPs.

“We expect you to be able to identify proposed courses of action (including pre-action) that could be defined as SLAPPs, or are otherwise abusive, and decline to act in this way. We expect you to advise clients against pursuing a course which amounts to abusive conduct, including making any threats in correspondence which are unjustified or illegal.”

Read the full warning notice here.

3. Conduct in disputes – thematic review

Regarding the regulator’s approach to SLAPPs and its expectations for firms in managing the risks in disputes, the SRA recently published its findings from a thematic review of conduct in disputes. The Conduct in Disputes Thematic Review looked at four main areas:

  1. Knowledge and understanding of SLAPPs
  2. How firms and solicitors manage risks in handling disputes
  3. Whether concerns are reported to the regulator
  4. Continuing competence of those providing dispute resolution services

While it was acknowledged that the thematic review was only a snapshot of the approach of a limited number of firms, the spot checks – carried out by visiting 25 firms – exposed widespread training failures, inadequate Policies, Procedures and Controls, and a misunderstanding among solicitors who advise in defamation and privacy cases of the obligation to report abuses.

Key findings, which covered areas such as managing the risks in disputes, reporting misconduct and training and competence, included:

  • “Despite firms acknowledging that there were potential risks associated with conducting litigation, most did not have any formal policies and procedures in place on how to deal with litigation or reputation management matters. Although firms are not obliged to have policies and procedures in place, they are an important tool to make sure the firm has a clear record of key issues and concerns and all staff understand their obligations and the specific risks that can arise in this area.”
  • “Many fee earners demonstrated they had a good general understanding of SLAPPs. However, we were concerned that knowledge and training did vary – for example, some fee earners thought that a SLAPP could only be bought against an individual.”
  • “We were concerned that 11 Heads of Department we interviewed were not aware of our guidance on reporting and notification obligations, with a further two unsure about whether they had seen it. Disappointingly, only six fee earners were aware of our guidance in this area.”
  • “Training and competence – There is room for improvement in this area. Solicitors should make sure they are aware of our guidance on conduct in disputes so they are meeting the high professional standards public confidence requires.”

Overall, the regulator said Law firms must do more to counter SLAPPs, and its review contains checklists firms can use to ensure they are litigating properly.

Source: Solicitors Regulation Authority – Conduct in disputes thematic review.

4. Changes to fining powers

Following the increase in fining powers by the SRA – now at £25,000, up from the previous limit of £2,000, which came into force last year – announcements were made this month (Feb 2023) confirming that further fining controls are set to be implemented this year. Following a consultation on the regulator’s fining powers, the SRA highlighted that the new powers would include new fixed penalties for lower-level misconduct, means tested fines to be based on a firm’s turnover and a pilot, expected to run for three years, of personal impact statements in cases involving harassment.

The SRA hopes the changes will enable cases to be resolved more quickly, while new fining bands will allow different levels of fine to be issued to a low-earning junior solicitor compared with a senior equity partner. Fines will be up to 5% of a firm’s annual domestic turnover.

Paul Philip, SRA chief executive said: ‘We have engaged extensively on our approach to sanctions and their publication. The feedback from both the public and profession has been invaluable in making sure we arrive at an approach that is effective, efficient and fair to all those involved.’

Source: The Law Society Gazette.

5. Ensuring all staff understand their obligations

Due to the level of regulation that applies to law firms, their management and supervision, setting out how a firm operates, including the conduct expectations of staff, in a series of policies, procedures, and documents is essential for all law firms. Furthermore, training all your staff on the firm’s policies and procedures and regulatory obligations is vital. Once training has been provided, be sure this is recorded as proof and that staff have easy access to policies and support from managers or the firm, especially for remote workers who are distanced from the traditional office environment.

TSP provides this as part of our standard compliance product referred to below.

6. Regulatory Guidance and Support from Industry Experts

If you would like guidance on how your firm should consider staff training and how to approach policies and procedures, including those for SLAPPs, or you simply wish to confirm your firm is achieving the required standard, at The Strategic Partner, we offer a range of solutions which include: –

  • Review – A review of the firm’s approach to regulation and compliance to include all regulatory requirements and AML procedures. The output of this provides the firm with a written gap analysis and solutions to remedy any issues.
  • Training – Whether you seek training on a 1-2-1 or group basis, The Strategic Partner has a range of training courses and mentoring programmes to suit any firm. We can also design any additional bespoke courses that you need. We have provided training to firms of all sizes, and our clients range from sole practitioners through to multi-office, multi-service firms with overseas offices.
  • Auditing – Procedural, staff, systems, and files to ensure the procedures are up to the required standard and being implemented at case level with a report of the outcome.

Solutions – Implementation of robust solutions to ensure the firm achieves compliance and then maintains compliance through the provision of ongoing support and assistance: –

For more information on The Strategic Partner and to discuss how we may be able to assist in accelerating your risk management or compliance and regulation or simply to keep this up to date you can call us on 020 3911 9710 or email us info@thestrategicpartner.co.uk. 

 

View and download the PDF version of this article here. 

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