Tribunal sounds warning over application of proposed suitability test

The Solicitors Regulation Authority should be particularly careful that its application of the suitability test doesn't undermine its duty to act in the public interest, the Solicitors Disciplinary Tribunal has warned in response to the regulator's draft review of the profession's code of conduct.

In an unusual move, the tribunal took the SRA's 'Looking to the Future' consultation as an opportunity to address a number of regulatory and wider sectoral issues, including the introduction of a new suitability test for solicitors.

In a thinly veiled warning, the SDT commented in its response to the consultation that it was only called on to assess the suitability of solicitors when considering whether they should be struck off. What it couldn't say, therefore, was whether such solicitors or entities met the suitability requirement at the point of application for admission.

However, it went on, 'in some instances, the tribunal's strong suspicion is that the SRA's enquiries at that critical point were insufficiently rigorous or that clear warning signs were not heeded by those with decision-making powers'.

Applications by solicitors who have been struck off to be restored to the roll were another potential regulatory hazard, the tribunal added. Restoration to the roll involves an application to the SDT, in which the SRA can intervene. The tribunal said it expected the SRA to apply a public interest approach in accordance with its duty as a regulator when deciding whether to support or oppose such applications.

'In the main the SRA is mindful of its obligations, particularly where a solicitor has been struck off for dishonesty,' the tribunal said, noting that the regulator can also authorise struck-off or suspended solicitors to work in an employed capacity. 'The tribunal trusts the SRA to use its powers judiciously in these circumstances without undermining the tribunal's sanctions imposed for public interest reasons.'

Turning specifically to the proposed suitability test, the tribunal said there was a lack of clarity between conduct in the course of practice and conduct in private. One example was the consumption of alcohol with staff in the office but in the absence of clients. This lack of clarity was 'potentially unfair', the SDT commented, 'leaving outcomes to the exercise of the SRA's discretion which could easily lead to inconsistencies'.

In other places, the SDT's response turned into a plea to support the profession at a time of acute financial stress against a backdrop of reduced access to justice for vulnerable clients. Many of the cases it dealt with, it said, involved smaller firms that have become financially unstable due primarily to market forces. 'This may be because the firm has been meeting the needs of the most disadvantaged in local communities at little or no charge,' it noted.

'Sole practitioners and SMEs form an essential reliable source of legal services for those who could be described as vulnerable,' the tribunal went on. 'The clients of these firms do not always have easy access to technology, or have never been taught how to use the computer in their local library assuming that the library has not been closed.'

And in comments on the disappearance of legal aid, it said: 'High-quality sole practitioners and SMEs currently fill the consumer gap at competitive prices. If those firms are, potentially, to be sacrificed as the price to be paid for an ideology that unmet consumer needs will be satisfied to an equivalent standard by the unregulated sector, the tribunal's view is that this will amount to throwing the baby out with the bathwater. It is an approach that is not to be recommended.'

Jean-Yves Gilg is editor in chief of Solicitors Journal

jean-yves.gilg@solicitorsjournal.co.uk | @jeanyvesgilg