The Solicitors Regulation Authority of England and Wales outlines new online threats in Risk Outlook Report

The Solicitors Regulation Authority’s new Risk Outlook report shows that email remains a significant vulnerability for law firms, involved in more than four out of five of all reported cybercrime incidents.

The report outlines new threats as criminals look to exploit new technology. It shows that 83 per cent of cybercrimes reported in 2021 involved email – for instance, through email phishing attacks. Conveyancing has been the most common target for such attacks, but we are now seeing cybercriminals targeting a wider range of practice areas.

The report warns about the changing risks of ransomware. In 2021, the SRA received relatively few – 18 – reports of ransomware attacks. Traditionally ransomware simply encrypted data which meant attacks would not have involved a breach to report. Newer ransomware steals data as well as encrypting it, with criminals likely to pressure targets by threatening to release sensitive information. The SRA are now receiving reports from law firms of this activity.

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Check My Legal Fees wins informed consent court case against Slater & Gordon

Solicitor/own client claims entity Check My Legal Fees (CMLF) has won its case against Slater & Gordon, opening the door to millions of former personal injury firm clients to recover deductions.

Mr Justice Ritchie ruled that Slater & Gordon had to make significant disclosures to CMLF, including of the phone calls in which it signed up clients to check whether they gave informed consent. The Justice said: “One only has to listen to the audio recording of the sign-up process for Mr Turnbull to feel uncomfortable about lack of informed consent for the [unrecovered costs] clauses in the CFA.”

Mr Justice Ritchie was ruling on appeals against two decisions made by Costs Judge Rowley.In Edwards, a group of 144 claimants challenges the process S&G used to sign them up and whether the clients gave informed consent; Raubenheimer, involving 140 claimants, concerns the allegation that S&G received a secret commission from an after-the-event (ATE) insurer.

Slater & Gordon lost the first appeal with the judge ruling the costs judge had the power to order disclosure in a part 8 claim during a solicitor/own clients assessment.

Further to the Raubenheimer appeal, CMLF said they believed secret commissions had been widespread in the market since 2013. This could lead to up to 1.4 million former clients bringing claims against their solicitors.

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Solicitors Regulation Authority of England and Wales publishes first ethnicity pay gap report

The Solicitors Regulation Authority has published its first ethnicity pay gap report. The ethnicity pay gap shows the difference between the mean or median hourly pay received by White staff and staff from a Black, Asian and minority ethnic background, employed at the regulator.

Around nine out of ten staff disclosed their ethnicity, with 66 per cent of the workforce being White and 26 per cent from Black, Asian and other minority ethnic backgrounds.

The 2021 report shows that the mean pay gap is 21.5 per cent, and the median pay gap – which is the difference between the midpoint in the ranges – is 15 per cent. The gap is driven by a higher proportion of White staff in more senior positions (88 per cent of the upper pay quartile).

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The Independent Review of Legal Services Regulation has released a supplementary report on consumer harm and legal services

The catalyst for the Review was the market study carried out by the Competition and Markets Authority in 2016. The CMA concluded that the legal sector was not serving the consumer well.

This supplementary report fills in some of the gaps left by the final report. Chiefly, the final report assumes the nature of consumer harm without exploring what this means in reality. This report examines what the types of consumer harm are in the legal sector, and the causes and consequences of this harm.

Read the full paper here.

Solicitors’ rights of audience, competence and regulation: a responsibility rights approach

Ching, Jane. “Solicitors’ rights of audience, competence and regulation: a responsibility rights approach.” Legal Studies 41.4 (2021): 585-602.

This paper takes as its context the decision of the Solicitors Regulation Authority in England and Wales to abandon before the event regulation of lower court trial advocacy. Although solicitors will continue to acquire rights of audience on qualification, they will no longer be required to undertake training or assessment in witness examination, by contrast with other, competing, legal professions. Their opportunities to acquire competence outside the classroom will remain limited. The paper first explores this context and its implications for the three key factors of rights to perform, competence and regulatory accountability. The current regulatory system is then displayed as a Hohfeldian network of rights and duties held in tension between stakeholders intended to inhibit the incompetent exercise of rights to conduct trial advocacy. The SRA’s proposal weakens this tension field and threatens the competitive position of solicitors. The paper therefore finally offers a radical alternative reconceptualisation of rights of audience in terms of Waldron’s ‘responsibility rights’ as a solution, albeit one with significant implications for the individual advocate. This model, applicable globally, is closer to notions of societal good and professionalism than to those of the competitive market, whilst inhibiting incompetent performance and remediating the SRA’s approach.

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Agency over technocracy: how lawyer archetypes infect regulatory approaches: the FCA example

Clark, Trevor, et al. “Agency over technocracy: how lawyer archetypes infect regulatory approaches: the FCA example.” Legal Ethics (2022): 1-20.

In this article, we look at the contested role of in-house lawyers in regulated organisations in the financial sector. A recent Financial Conduct Authority consultation on whether to designate the head of legal of banks, insurance companies and other financial firms as ‘Senior Managers’ and the decision which flowed from it, reflected a flawed view of lawyers as a neutral technocracy of mere legal technicians; we show how the FCA’s decision is potentially damaging to the public interest and failed to take into account that in-house lawyers are often important decision-makers and influencers within their organisations. We put the case for an alternative view; that in-house lawyers are professionals, with agency that requires them to act in accordance with ethical norms and means they should be made more accountable for their conduct.

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The Legal Services Board of England and Wales publishes statement for regulators to empower legal services consumers

The Legal Services Board (LSB) has published a statutory statement of policy on empowering consumers to better access information about the service and quality of legal services providers. Developed following a consultation and engagement with legal services regulators and others across the sector, the statement outlines how the regulators should ensure that individuals and small businesses who need legal advice have the information they need to shop around and choose the provider most suited to their legal needs.

With the published statement, the LSB has set expectations for regulators to ensure legal services providers offer useful information to consumers about the cost and quality of their services and on redress and regulation.

Findings from the 2020 Individual Legal Needs Survey suggested that 3.6 million people in England and Wales had an unmet legal need involving a dispute each year. Findings from the 2021 Small Business Legal Needs Survey suggested that only a quarter of small businesses obtain professional help to deal with legal issues, while half try to handle them alone or take no action at all.

The statement sets out actions for regulators to implement effective programmes of activity to support public legal education, focusing on activities that support people to understand when they have a legal problem and how to access the professional help they need to resolve it. This includes, for example, contributing to cross-sector initiatives like the Legal Choices website to increase public understanding of citizen’s legal rights and duties.

Read the full article here.


The Legal Services Board of England and Wales launches consultation on a new framework for regulation in the legal services sector

The Legal Services Board has begun a consultative exercise on how best to create more efficient regulation of legal services. The new system places greater emphasis on leadership, delivering the regulatory objectives and running effective operations.

The proposed new framework comes after several years of the existing one, feedback from the regulators, and research into other systems. It places responsibility on regulators and their boards to provide assurance that they are well-led and effective in their approach to, and delivery of, regulation for the public.

The proposed framework is intended to:

  • Place sufficient emphasis on effective leadership, capability and capacity of regulators.
  • Encourage regulators to take ownership of the regulatory objectives and hold them to account for putting these at the centre of what they do; and
  • Be sufficiently flexible to account for developments in the legal services market and the policy environment.

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Solicitors Regulation Authority of England and Wales launches consultation on annual ‘keeping of the roll’ exercise

The Solicitors Regulation Authority of England and Wales has launched a consultation on the possible reintroduction of the requirements for non-practising solicitors to complete an application to remain on the roll.

The need to reintroduce an application process for those without practicing certificates comes from a change in the law on the handling of personal data. It also gives the SRA the opportunity to ensure all of their data is up to date.

The consultation proposes reintroducing the ‘keeping of the roll’ exercise from April 2023 and would involve an administration fee between £30-£40.

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The Solicitors Regulation Authority of England and Wales is consulting on proposed changes to its wellbeing standards

The consultation, running from the 4 March – 27 March follows increased concerns about the level of stress solicitors are experiencing as well as reports of bullying and harassment.

The consultation addresses two key issues:

  • The SRA has seen instances of serious, unfair and inappropriate treatment in the work place.
  • There has been an increase in cases in which a solicitors health issues have impacted their ability to conduct their work safely, potentially endangering the general public.

The proposed changes would provide explicit regulatory obligations to individuals and firms to treat colleagues with respect and dignity and to equip the SRA with the ability to take appropriate action where a solicitor’s health affects their fitness to practise.

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