Legal services regulation reform: consultation analysis

Part 2(D) Fitness to Practice

Introduction

Part 2 of the Admission as Solicitor (Scotland) Regulations 2011 sets out that someone may only be admitted to the Law Society of Scotland if they are "a fit and proper person to be a solicitor" and holds appropriate qualifications. The Law Society of Scotland guidance sets out the indicators of whether a person is considered 'fit and proper' to be a solicitor, and includes such factors as personal integrity, lawful behaviour and financial probity.

Similarly, the Faculty of Advocates requires applicants to provide a reference regarding their fitness to hold the public office of advocate, as well as a certificate disclosing:

• Any prior criminal convictions or outstanding criminal proceedings;
• Any complaints of professional misconduct or negligence which have been upheld against them or which are outstanding; and
• Whether they have ever been declared bankrupt, or sequestrated or signed a Trust Deed for creditors, and the circumstances thereof.

The consultation document sought feedback on whether the current 'fitness to practice' system was working well, what changes could be made, and whether there should be a test to ensure that non-lawyer owners and managers of legal entities are fit and proper persons.

Question 21

Q21. To what extent do you agree or disagree that the following aspects of 'fitness to practice' requirements or regulations are appropriate and working well in Scotland?

Of the respondents that provided a response, most agreed that all three elements of the 'fitness to practice' requirements or regulations were appropriate and working well in Scotland:

• Content of the criteria: 85% (n=76) agreed this was appropriate and working well;
• Frequency of career points where the criteria must be satisfied: 81% (n=72) agreed this was appropriate and working well; and
• Transparency and fairness in decision making: 84% (n=73) agreed this was appropriate and working well.

Question 22

Q22. Are there are any changes you would make to each aspect as set out in the previous question?

Very few respondents specified any changes that they would make in relation to the aspects set out in Q21, and several simply commented that they perceived the current fitness to practice rules worked well in Scotland to preserve the professional respect and trust of the public in the profession. Others stressed the importance of those in the legal profession being of the utmost integrity to ensure public confidence but added nothing more specific.

Content of Criteria

In relation to the content of criteria, just a few suggestions were put forward by one or two respondents each, including that:

• The barrier to entry via diploma should be removed or alternative routes provided (as entry into the profession via diploma was considered to be too high and too costly);
• The definition of 'solicitor' needed to be reviewed as part of the broad enablement of the regulation of the legal profession;
• Criminal convictions should be considered on a case-by-case basis rather than as a blanket rule (although it was recognised that this may lack transparency and clarity);
• Changing the requirement to disclose any convictions to a period of within 2 weeks of conviction, and a reconsideration of fitness and properness within a further 2 weeks;
• Any upheld complaint should be followed by a separate consideration of fitness and properness to act;
• Behaviour constituting stalking and harassment, inappropriate online communication, coercive control and domestic abuse related offences, and any civil or criminal protective orders granted in relation to any such behaviour should be considered in background checks; and
• Evidence of repeated complaints against a solicitor or advocate, whether or not upheld, should be taken into account.

One respondent suggested that it may be appropriate for there to be some exemptions to the criteria which may allow individuals with relevant experience, other than in Law, to enter the profession. It was suggested that this would be in the interests of opening up competition and innovation, and giving consumers access to a more diverse range of providers:

"…the LSS [Law Society of Scotland] may wish to consider some exceptions, subject to appropriate safeguards to ensure fitness of ownership, to the experience rule to facilitate new entry, for example, by solicitors with other suitable experience that would equip them to run a firm and introduce innovation to do so… This illustrates the importance of ensuring that the system strikes the right balance between providing consumers with protection while allowing sufficient flexibility to encourage growth and innovation in the sector." (Consumer Organisation, Public Body/Sector)

Similarly, another suggested that any criteria that focused too narrowly on professional accreditation could be damaging to the sector:

"…where fitness to practice is assessed only by reference to a professional title, rather than on the competence and integrity of an individual in relation to the legal services activity being carried out, it is focusing on a limiting condition. Economic growth of the legal services sector will be constrained, access to legal advice and assistance is limited, the regulatory framework retains complexity and cost, and the opportunities for risk-based and proportionate regulation cannot be fully realised." (Individual)

Frequency of Review

Again, very few specific suggestions were made in relation to frequency of review, with most open-ended comments in this regard suggesting that more regular reviews of fitness to practice throughout an individual's career or continuous assessment by the regulator (especially in relation to good character) might be beneficial.

A small number of respondents suggested that Continuing Professional Development (CPD) should feature more strongly as a requirement for practice and/or be more robustly implemented and monitored than at present. Another expressed the view that the initial and continuing competence of a practitioner was as important as the award of professional qualifications/titles:

"I feel that not enough regard is given to continuing professional development. The public should demand a process which ensures that members of the professions are up to date in the disciplines in which they profess and are up to the standards required." (Individual)

"…fitness to practice is really governed by the CPD regime and the majority of that regime currently involves doing twenty hours of education per year…That probably needs to be re-visited - should there be a continuing professional competence regime that might look like other professions? Is there evidence that that is necessary?" (Individual)

Importantly, a small number of respondents also commented that they perceived current CPD requirements to be sufficient.

One respondent also suggested that more could be done with regard to the testing of fitness during the qualification period (i.e. for the LL.B. and Diploma in Legal Practice):

"There appears to be an ever increasing of number of law graduates without question of their potential fitness to practice." (Organisation, Legal Services Provider)

Transparency and Fairness

Again, there were few specific comments made in relation to transparency and fairness (other than the points noted above in relation to potential for narrowing the market if criteria were too rigid). Other comments from just one or two respondents each included that:

• There should be a specific duty to self-report serious criminal convictions; and
• Where fitness to practice is not beyond doubt, the regulator should have the power to suspend or remove an individual's right to practice, or impose additional conditions (such as supervision, or medical or similar certification) on the continuing right of the individual to work within the regulated sector.

Two respondents raised concerns linked to mental health and wellbeing. One suggested that there should be a duty of candour to disclose to the regulator any changes to fitness to practice that might be linked to physical or mental illness, alcohol or drug dependency, or pending criminal or disciplinary charges. The other suggested that specific protocols be developed to deal with such cases:

"…we would note the absence within the current legal regulation model of a 'health procedure' which allows failings by a practitioner, perhaps due to mental health issues, to be dealt with in a specialised way, rather than through the use of conduct and service complaints (which tackle symptoms, but not cause, and do not fully recognise the vulnerability of the practitioner). There are examples of this type of approach in other sectors and jurisdiction that might provide helpful models for this." (Consumer Organisation, Public Body/Sector)

A small number of respondents again suggested that both this question and the linked preceding question were unclear, asking two separate things under one umbrella (i.e. for judgements in relation to both appropriateness and whether the system was working well). Specifically, there was no scope to indicate if the system was perceived to be 'appropriate' but not 'working well'.

One respondent suggested that the notion of 'fitness to practice' requirement or regulations was unclear as they did not believe there was a 'fitness to practice' regime currently operating for legal services, beyond the requirements for initial entry into the profession, financial inspections and the complaints process. This same respondent did, however, perceive that a genuine fitness to practice regime would be a helpful addition to the regulatory landscape in Scotland.

Observations were also made that the reference to 'exemptions' had been overstated and reference to 'admissions' had been misrepresented in the consultation paper. It was also noted that issues linked to peer review had been omitted from the consultation, but that the introduction of a system of quality monitoring of peer review may not be proportionate.

Again, a small number of respondents noted that they felt unqualified in this area and/or that insufficient information was provided in the consultation to allow them to provide an informed view.

Question 23

Q23. To what extent do you agree or disagree that there should be a test to ensure that non-lawyer owners and managers of legal entities are fit and proper persons?

Base: 103

Most of the respondents who provided a rating agreed (94%, n=97) that there should be a test to ensure that non-lawyer owners and managers of legal entities are fit and proper persons. Only 6% (n=6) disagreed with this.

Those who agreed indicated that this measure would be in the interests of fairness and transparency (i.e. making standards for non-lawyer owners and managers equitable with lawyers). It would also help prevent unfit persons from operating in the sector (protecting the public) and ensure standards of accountability, integrity and probity, it was suggested. Such a test may also help to minimise the risks of criminal enterprise by such parties, it was felt. Caveats to support included that this may be costly and administratively challenging and that it must be targeted and proportionate:

"If non-lawyers are able to participate in the owning and managing of legal entities, then they, like lawyers, should be subject to a fit and proper person test." (Organisation, Third Sector for the Profession)

"A law firm should be a professional, trusted and respected business. The public must have faith that any owner/manager of a legal entity, (whether they be a lawyer, or non-lawyer), should pass a stringent fit and proper test." (Individual)

Other comments made by those in support included that the regulator should be able to sanction non-lawyer owners and managers, the possibility of publishing details of those found unfit to practice, and similar tests being used as those already employed by the Financial Conduct Authority when individuals apply to be an authorised person for the provision of financial services. It was also noted that this mirrored the requirements relating to non-solicitor investors within a licensed legal services provider under the Legal Services (Scotland) Act 2010.

Very few respondents who disagreed with this proposal gave additional comments. Among those who did, the main views were that professional standards are higher than those that operate in business generally and this could therefore be unfair (or that lower standards may be relevant), and that professional standards were of more relevance to the individual professionals/practitioners than employers/ business owners. Two respondents expressed views that non-lawyer owners should not be permitted, and that the legal profession in Scotland should not be further commercialised. Finally, one respondent suggested that this question appeared to assume that non-solicitor ownership of solicitors' practices currently operates in Scotland but felt that this was not the case, and therefore felt that the consultation was misinformed/ flawed in this regard.