Council Member's Report

The Council Member’s Report

Peter Watson-LeeLaw Society Council Member for Dorset

Extraordinary Times

The fallout from the Axiom Ince debacle rumbles on. As you’ll recall, this is the firm from which £60 million in client funds mysteriously vanished, triggering a massive claim against the solicitors’ compensation fund—an expense we’ll all be contributing to.

Despite initial efforts by the SRA to sidestep accountability, the Legal Services Board—our regulatory top dog —has issued a series of Binding Directions to the SRA. This represents a serious sanction.

Meanwhile, we await the report into the collapse of another firm called SSB Law. The expectation is that it may prove even more toxic and more damning in its assessment of the SRA.

Departures Galore at SRA and LSB

It’s hard to believe that the exodus of senior leaders from our regulators is purely coincidental. Paul Philip, longtime Chief Executive of the SRA, is “retiring.” In recent months, several other senior executives have quietly exited. The one constant is Anna Bradley, Chair of the SRA Board, who held a leaving party last year—only to be reappointed, presumably to steer through the incoming tide of change.

Over at the Legal Services Board, the Chair stepped down earlier this year citing “personal considerations.” More disappointing is the sudden and unexpected resignation of the Board’s relatively new Chief Executive—the very individual who had held the SRA to account over Axiom Ince.

New SRA Chief

Sarah Rapson has now been appointed Chief Executive of the SRA, receiving the £414,800 salary the post pays (financed by our practicing certificate contributions). Unfortunately, there’s no sign that she has any experience of legal practice or the solicitor’s profession. Formerly a civil servant, she arrives from the Financial Reporting Council. 

That said, we mustn’t prejudge—and I would certainly not envy the overflowing in-tray waiting for her.

Yet More Regulation?

So far, there’s little evidence that these changes will ease the regulatory burden on solicitor’s firms. On the contrary, the fallout from Axiom Ince is expected to lead to:

• Restrictions on individuals occupying multiple roles across 

   ownership, management, and compliance

• Expanded requirements for annual accountant reports

• New notification obligations when there are mergers or 

   acquisitions

Some positive news…

Amid the regulatory mayhem, a rare ray of sunshine. The government’s newly published Industrial Strategy recognises that the legal sector is one of the UK’s thriving areas of growth.

It has acknowledged that the money laundering regulations that we operate under are a burden and that the rules need to be proportionate to the risks involved. As a result the government is saying that it will bring forward a package of changes to the money laundering regulations by the end of the year. No details are given, but it is one straw of hope to cling onto. 

Peter Watson-Lee

Law Society Council Member for Dorset

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