Plans for English courts to strike off acquitted solicitors backfire after legal threats

A plan by the Attorney General to allow lawyers in England & Wales who were acquitted of criminal charges, to be struck off by Crown Court judges has been dropped after threats of legal action from the legal profession.

If only such powers existed in Scotland … rather than leaving the Law Society to fumble the profession into regulatory oblivion …

From the Solicitors Journal :

Acquitted solicitors will not be struck off

24 March 2009

A plan to allow Crown Court judges to strike off solicitors acquitted of criminal charges in fraud cases has been quietly dropped by the Attorney general.

Judges will now be permitted to discipline solicitors, including striking them off for up to 15 years, only if they are convicted. The new power will apply to other professionals, such as financial advisers and estate agents, but not barristers.

Lawyers had warned of human rights challenges by defendants if the plan included those acquitted of offences (see “SJ News” 29 July 2008).

In the same way the Attorney general has agreed to limit the Crown Court’s new power to wind up companies to cases where solicitors are convicted.

Responding to a consultation, a spokesman for the Attorney general said that more than half of respondents were opposed to professional disqualification in the case of an acquittal or as an interim measure pending determination of criminal charges.

In a related development, Baroness Scotland issued guidelines last week to prosecutors on plea negotiations in fraud trials. Informal discussions about pleas already take place but do not include sentencing.

“This plea negotiation framework is specifically designed for our criminal justice system and is not about offering discounts, immunity or incentives to fraudsters,” she said.

“It doesn’t require a defendant to assist the prosecution, and is careful to avoid a perception of plea ‘bargaining’ associated with the US. It highlights the importance of judicial discretion to agree, reject or alter the agreed plea, and to impose an appropriate sentence.”

She went on: “In one complex fraud case, the Serious Fraud Office estimated that £1.5m in prosecution costs alone would have been saved through a successful plea negotiation.”

The issuing of guidelines to prosecutors followed a consultation on plea negotiations ( see “SJ News” 8 April 2008 ).

Dean of Faculty wants Scotland’s class action restrictions removed to sue Banks

Richard Keen QC, the current Dean of the Faculty of Advocates, has come out in favour of scrapping Scotland’s infamous restrictions on Class Action lawsuits.

The Dean, however, only seems to feel Class Actions should be allowed against Banks & financial institutions … which seems to indicate the cosy relationship between the legal profession and the Banking sector has hit the rocks … no more cheap finance lads ? – Ed

We noticed an interesting version of the Class Actions story over on Peter Cherbi’s “A Diary of Injustice in Scotland” here : Dean of Faculty calls for class actions against banks as Scots legal profession turns against financial sector

The Scotsman reports :

QC: Allow class actions against banks

Published Date: 26 January 2009
By Jane Bradley and John Forsyth

ONE of Scotland's most senior lawyers is calling for ministers to scrap the restriction banning class actions in Scots law, a move that could see a wave of claims against banks.

The suggestion by Richard Keen, QC, the dean of the Faculty of Advocates, would open up the prospect of challenges by groups of shareholders against financial institutions over a lack of information about the state of their business.

It is understood that Scotland's legal profession believes there could be a raft of actions against Royal Bank of Scotland and other financial institutions on the basis that the information given out at the time of rights issues had been inadequate.

Mr Keen said: "The absence of class action certification inhibits pursuit of remedy. It is difficult to fund major litigation of that kind unless you can put together a class action."

Mr Keen's comments follow a string of calls from politicians demanding legal and political action to tackle the crisis – with RBS most in the firing line. Alex Salmond, the First Minister, said yesterday that he believed a parliamentary inquiry should be carried out into the banking crisis in Scotland.

He said any investigation should cover the Financial Services Authority and the role of politicians in overseeing the administration of the financial sector "to ask them why they were asleep on the job".

He said: "I'd rather favour a parliamentary investigation, not just into the Royal Bank of Scotland – that would be daft, as the Royal Bank of Scotland is only one of hundreds of banks worldwide which has got into serious trouble – but into the financial sector."

It emerged at the weekend that Christine Grahame, an SNP MSP, has written to Lothian and Borders Police, demanding that an investigation be carried out into RBS's conduct over its two rights issues last year, while Tavish Scott, MSP, the leader of the Scottish Liberal Democrats, has called for an investigation by the Serious Fraud Office.

Under the leadership of Sir Fred Goodwin, RBS carried out its first £12 billion rights issue in April last year, when thousands of investors forked out £2 a share for a tranche of new stock in the firm. A second rights issue, in November, was shunned by investors and the government had to underwrite the £15 billion issue. RBS's fortunes have nosedived in recent months, with investors watching shares plummet, to close at 12.1p on Friday.

Mrs Grahame's letter told police she believed RBS "appeared to have committed a fraud".

RBS revealed last week it was on course for the biggest loss in UK corporate history, as it expected to write down as much as £20 billion on the falling value of its assets.

Mr Scott said: "I think the banks across the UK must have known what their financial position was much earlier than they were letting on, and that particularly applies to RBS.

"At the time they were asking investors for more money to help their financial position, as RBS giving a full picture of how strong or weak they were as a financial institution? I genuinely don't know, but I believe that the Serious Fraud Office should have a look at it."

He warned that a political inquiry could turn the crisis into a partisan issue and could detract from solving the question of whether investors were misled.

Just last week, the veteran lawyer Ian Hamilton lodged a small-claims action against RBS, saying he had been persuaded to buy 640 shares at the £2 offer price in its 2008 rights issue.

A spokeswoman for RBS refused to comment.