A look at the regulation aspects of the Clementi review

Question 1

Why is the Clementi Review concentrating on regulation?

As I mentioned in my previous article, the regulatory record of the Law Society of England and Wales over, say, the last 10 years is not well regarded. I could enter into protracted discussion as to whether this is perception or reality, but I have to say in my seven years at Drumsheugh Gardens I have seen dozens of headlines describing LSEW as being “in the last chance saloon” on complaints handling.

We could also debate whether moving complaints out of LSEW’s mainstream work into the semi-autonomous Office for the Supervision of Solicitors, based in Leamington, has been positive or negative for the profession in England. The bottom line is that notwithstanding the impressive nature of the current operation – and in fairness the English have devoted a lot of resource to OSS recently – there is a strong “unshiftable” perception in the mind of the press, public and politicians that complaints are not being dealt with adequately.

I am convinced that part of the LSEW problem is the sheer size, scale and nature of the profession in England and Wales, where 110,000 solicitors interact with approximately 50 million clients. As far as I am aware there is no other regulator of legal professionals anywhere in the world on the same scale as LSEW.

In addition there is no doubt that OSS suffers from a complaints culture which is even more pronounced in England and Wales than in other comparable jurisdictions. By contrast the Law Society of Ireland is the beneficiary of the fact that this culture has not hit their profession. Direct statistical comparisons cannot be made outwith the context in which the complaints arise. It is therefore in my view unfair to compare the “apples” of Chancery Lane with the “pears” of Drumsheugh Gardens – or even the “oranges” of Blackhall Place, Dublin.

Question 2

What about our own regulatory record?

First of all, regulation is more than just complaints. The reputation outwith Scotland of the Scottish legal profession is outstanding. It is held in extremely high regard in relation to all aspects of regulation and especially the Master Policy, the complaints system and the Guarantee Fund.

Our Master Policy is greatly admired for the protection it affords to the public and the profession. In addition to this, our claims record is, notwithstanding an increase in the last 18 months or so, exemplary when compared to other relevant professions.

I am also proud to say that the profession is, demonstrably and objectively, exceptionally honest. Guarantee Fund payments over the last seven or eight years have been at an extremely containable level.

There are other aspects of regulation such as admission to the profession, but it is clear that when regulation is discussed in Government circles or the media it does mean almost exclusively complaints.

As I mentioned, the Justice 1 Committee of the Scottish Parliament concentrated its analysis on our complaints handling procedures – MSPs accepting our invitation to attend Council to see how matters were handled – and concluded that whilst in need of some improvement the system continued to operate in the best interests of the profession and the public. Indeed it has to be remembered that the system exists, to use the current jargon, “free at point of delivery for the public”.

Can I stress that the Society has no discretion in relation to dealing with complaints. They sit with us as an absolute statutory obligation. Our duties in terms of section 1 of the Solicitors (Scotland) Act 1980 are balanced and I sincerely believe that our Client Relations Office does a robustly fair job looking at each case on its merits and balancing the interests of the profession and the public.

There has been an upswing in the number of complaints dealt with by the Society. There are various factors which could easily have been anticipated – for example the inception of the Scottish Parliament, the robust approach taken by the current Ombudsman and the spillover from the English situation. Our profession is not alone in noticing a discernible complaints culture growing in Scotland.

Our response has been to provide additional resource in the Client Relations Office in terms of the number of case managers, managerial resource and also remunerating reporters (at, I have to admit at this stage, a relatively nominal rate) in order to increase what I have always conceded as being the only discernibly weak part of the system and that is its velocity. Solicitors and clients are equally concerned to have matters decided as soon as possible. All research indicates that satisfaction with the system – both by solicitors and clients – is likely to be higher if a decision is reached quickly.

It is too early to give definitive statistical confirmation, but my impression is that the benefits to be brought by the Council of the Law Society of Scotland Act 2003 which allow us to delegate will be clearly seen within the next 9-12 months.

Question 3

Does that mean that the Society will continue to defend the status quo in relation to complaints handling?

That is what people will expect. This issue has brought to the fore the essence of what we call “the section 1 debate”. I have had little difficulty over the last few years in defending our ability to act in the interests both of the profession and of the public in relation to that profession because I have until recently seen it as a very strong community of interest rather than a conflict of interest. Recent developments have however caused us to question this. It has to be said that in the current climate in Scotland regulation is very, very difficult. It is a classic “no win” scenario. It is very stressful for our Client Relations Office staff, and in particular case managers, dealing with dissatisfied members of the public – but more disturbingly, solicitors who can be quite simply difficult and even abusive to deal with. Complaints make us unpopular with our members.

Some say we should seize the Clementi debate as an opportunity to rid ourselves of complaints handling. This is the essence of the debate – does that mean the loss of professional status or is there life beyond regulation? We also must remember that what Scottish solicitors and the Law Society of Scotland want is not necessarily what the Clementi review may deliver. We are not masters of our own destiny – though we will do what we can to ensure that proper consideration is given to the Scottish position.

Question 4

All aspects of complaints?

Probably not. There are three elements to regulation. The first is the making of the rules – which I would always robustly defend as the job of the professional body. The second is dealing with conduct matters and again I see that as being the preserve of the Law Society of Scotland, prosecuting as it does before an independent tribunal. The third area, the area in which the English are in some difficulty, is in relation to service matters. I see this as less central to the concept of professionalism and something which the profession could consider shedding.

I think the bulk of dissatisfaction lies in relation to matters of inadequate professional service – which was a statutory graft in the late 1980s. We have considerable non-solicitor input into our Client Relations system and it is always said – correctly – that non-solicitor members are (contrary to public perception) less hard on our members than the solicitor members. This I think goes to show that standards of professionalism are taken very seriously by solicitors in Scotland.

Question 5

Will Mr Clementi’s proposals affect only solicitors in England or barristers as well?

One of the difficulties in assessing our response to Mr Clementi’s consultation paper – which we anticipate will be issued in February 2004 – is that there has been no attempt yet to define clearly what “legal services” actually are.

There is no doubt however in my mind that the new regulatory framework will affect the English Bar Council as much as it affects the LSEW. Indeed some readers may have noticed a recent exchange of views between Stephen Irwin QC, the incoming Chairman of the English Bar Council, and Janet Paraskeva, the Chief Executive of LSEW.

These two bodies take profoundly different views of the benefit of the “Tesco Law” proposals and it is quite clear to informed observers that the Bar Council feel sore as they see it being possibly dragged down by the solicitor complaints issue. As Mr Irwin was quoted recently in the Financial Times, “why on earth should we do the thing well ourselves and yet pay for other people’s mistakes?” Scottish solicitors are likely to have considerable empathy with this view.

It was to be anticipated that the legal press in England would try and identify the differences between the Bar Council position and the position taken by LSEW on the joint questions of regulation and Tesco Law. Indeed in Scotland if the “read across” as identified by the Scottish Executive is to apply to any Clementi proposals, the Faculty of Advocates is also likely to require to consider its position.

Question 6

Mr Clementi despairs of the “regulatory maze” as he sees it. Can you describe to us what this is?

Much of the in-depth scoping study for the regulatory review of legal services prepared in March 2003 for Clementi concentrates on a framework map for regulation. This acknowledges the external pressures of the Westminster Parliament, the European Union and the World Trade Organisation and analyses the English market place as comprising:

(a) Super regulators
(b) Professional bodies
(c) Other professional bodies
(d) Service regulators
(e) Purchasers of legal services (see box below)

This must be operationally unwelcome even for the Law Society of England and Wales itself. It must be a lot more confusing for the profession and almost unfathomable for the average member of the public who feels some sense of grievance. There is no doubt that the maze is not the fault of LSEW. Much has grown up on a piecemeal basis over the years – some of the bodies being grafted on by legislation. Perhaps a rationalisation is necessary to end the confusion, but the probability is that the matter is being looked at critically only because of the perceived failure in the existing system – the sharp end of which is the OSS.

Question 7

Is there such a regulatory maze in Scotland?

Not a maze as such but our system, as we emphasised to the Justice 1 Committee in response to their inquiry, is one of co-regulation rather than unfettered self-regulation by the Society. This is exactly how it should be and it would be entirely untenable for the Society to be free of checks and balances in this area. Although we are the primary regulator for solicitors in Scotland in compliance with the 1980 Act as amended, there are other parties relevant to the situation, namely:

  1. the Lord President, who requires to sign off on our rules and heads up the court to whom our members owe duties and to whom we apply for admission;
  2. the Scottish Solicitors’ Discipline Tribunal, which is an independent tribunal made up of solicitor members appointed by the Lord President and lay members appointed by the Scottish Ministers. This is funded by the Society but independent of it in terms of decision making. The Society’s role in the Tribunal is as prosecutor;
  3. the Scottish Legal Services Ombudsman, who has a statutory role in relation to complaints handling;
  4. the criminal courts – in the rare event that any solicitor’s conduct is of a criminal nature;
  5. the Financial Services Authority;
  6. the Office of the Immigration Services Commissioner;
  7. the Scottish Legal Aid Board.

Obviously complaints against advocates are handled by the Faculty and we have recently become responsible for regulating the small number of licensed conveyancers in Scotland. It is far less confusing than south of the border, but when you consider that the OISC, SLAB, FSA and SCESB are all relatively recent additions to the regulatory picture in Scotland you can see a growing trend.

Question 8

What should solicitors now do?

Inform themselves of the issue. Discuss them with colleagues. Participate in the various roadshows which we are putting on – or contact me for a visit to their area. Think about the value of professionalism. Think about the core values. Realise that the Law Society of Scotland may not be your regulator in future. Consider the alternatives. Is this a threat or an opportunity? Express your views in the letters page of the Journal. As Mr Clementi said: “The only option not up for grabs is the status quo.”

Next month, Douglas Mill will look more directly at the Tesco Law proposals – their commercial and regulatory implications – opportunities or threats?

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