In April 2013 the Solicitors Regulation Authority (SRA) consulted on proposals to meet the cost of interventions from the Compensation Fund.
In the consultation introduction, the SRA say that ‘the continued, difficult economic environment has increased the number of interventions carried out by the SRA and has also given rise to additional and exceptional intervention costs. There is a clear risk this trend will continue in 2014 and onwards. As the cost of interventions is ultimately met by the regulated community, it is important to raise this issue and for the SRA to seek views on this proposal.’
Junior Lawyers Division response to SRA consultation
The JLD has had the opportunity to read the Law Society’s substantive response to the consultation.
We agree with the content of the Society’s response in full.
Further, we are concerned that junior lawyers may be adversely impacted should the trend in interventions continue. Clearly, should more firms close due to the economic climate, there will ultimately be less ability for junior lawyers to practise. The JLD has already raised concerns that the regulator should be doing more to support trainees (for example) whose training contracts are cut short due to firm collapse. While it is correct that trainees have been “rescued” from failing firms such as Cobbetts and Halliwells, there is no regulatory requirement for firms to recognise training undertaken in other establishments.
In addition, those junior lawyers working in firms which have been intervened in may have their careers cut short. Again, should an intervention happen, jobs may be lost or the quality of the establishment questioned. The SRA should consider alternatives to interventions where possible, in line with their risk-based approach to regulation.
The SRA’s overall “root and branch” review of funding of such interventions and, more broadly, in consumer protections, should be concluded, including an impact assessment. This assessment would include the matters set out above, before the funding of interventions is permanently changed to draw from the Compensation Fund.