When “Sorry” won’t do : Criminal law should be used to protect the public from the 'off the hook' style self-regulation empires of banking, finance, legal and key public services

Broken regulation applies to many more services than just banks. During a week in which England’s NHS regulator, the Care Quality Commission (CQC) was forced to admit (in response to a review) it had covered up information relating to the deaths of babies at a hospital in Cumbria, and at Westminster, the Cross-party Parliamentary Commission on Banking Standards report recommended bankers found guilty of a yet to be created criminal offence of “reckless misconduct” be jailed, it is not too difficult to put forward the point once more that regulation as we know it is ineffective and does not pose any deterrent to those it purports to regulate.

Let’s face it, if regulators are happy enough to cover up the deaths of babies in hospitals, and profit from such a cover up, what chance does any of us have in getting justice against any complaint lodged with any of the current regulators of any profession or public service ?

Diary of Injustice has previously reported on cases in Scottish hospitals where in one particularly case of the death of baby McKenzie Wallace at an NHS Forth Valley hospital reported HERE, regulation in the form of the Scottish Public Services Ombudsman (SPSO) ‘Complaints Reviewer’, Eileen Masterman, did nothing to explain the tragic events, other than to produce a ‘whitewash report’ which only contributed further to the hospital’s cover up.

Time and again, we are promised change, told “lessons will be learned” and what happened will never happen again, but it does, whether it’s another avoidable death in a hospital, or an avoidable rip off of consumers and those who should face a court and be found guilty escape with a big fat pension while their victims are left to pick up the pieces.

The recommendations of the Parliamentary Commission on Banking Standards tell a story many consumers have known for years when it comes to regulation. With particular regard to the creation of a criminal offence of reckless misconduct, such a move should not only be limited to bankers, rather also it should be applied to all those professions where the long standing cosy clubs of self regulation have seen the public are let down time & again.

The key recommendations of the report on Banking standards could well be applied to the legal system, where client’s lives are regularly ruined by legal ‘professionals’ who rely on their system of self regulation to get them off the hook just as the bankers have so far escaped punishment for their actions :

* A new Senior Persons Regime, replacing the Approved Persons Regime, to ensure that the most important responsibilities within banks are assigned to specific, senior individuals so they can be held fully accountable for their decisions and the standards of their banks in these areas

* A new licensing regime underpinned by Banking Standards Rules to ensure those who can do serious harm are subject to the full range of enforcement powers;

* A new criminal offence for Senior Persons of reckless misconduct in the management of a bank, carrying a custodial sentence;

* A new remuneration code better to align risks taken and rewards received in remuneration, with much more remuneration to be deferred and for much longer;

* A new power for the regulator to cancel all outstanding deferred remuneration, along with unvested pension rights and loss of office or change of control payments, for senior bank employees in the event of their banks needing taxpayer support, creating a major new incentive on bankers to avoid such risks.

Just imagine if the ‘independent’ Scottish Legal Complaints Commission called for the same powers, and demanded the added protection of criminal law for clients whose finances are regularly wiped out by solicitors free to do it again and again …

Similarly, the key points of the report on Banking standards also tell the same story of problems in the legal profession, and those others in the justice system who work in, manage, and rule over our “Victorian” courts system.

* Given the misalignment of incentives in banking, it should be no surprise that deep lapses in standards have been commonplace. The Commission’s Final Report, ‘Changing banking for good’, contains a package of recommendations to raise standards.

* The recommendations cover several main areas including: making senior bankers personally responsible, reforming bank governance, creating better functioning and more diverse markets, reinforcing the powers of regulators and making sure they do their job.

Just as in banking, when there is no incentive to be honest in our justice system, whether you are a member of the judiciary, a court clerk, a solicitor or even a member of a self regulator of solicitors, the same deep lapses in standards have also become commonplace because there is no deterrent in current regulation and no fear of being caught.

The full report on banking standards by the cross party Committee on Banking Standards can be found at the following links :

• Report: Changing banking for good - Volume I (HTML)
• Report: Changing banking for good - Volume I ( PDF 592 KB)
• Report: Changing banking for good - Volume II (HTML)
• Report: Changing banking for good - Volume II ( PDF 2.5 MB)
• Parliamentary Commission on Banking Standards

If we are going to charge the bankers with reckless misconduct for ruining the banks, we may as well also charge the lawyers who ruin countless clients, and get away with it in the same way the bankers have done up to now.

If this were to happen, and the likes of the John O'Donnell's and countless other reckless lawyers in Scotland face a custodial term for their wholesale thieving, attitudes within the prosecution service would also have to change, particularly in Scotland where our own Lord Advocate’s Crown Office refused to prosecute FOURTEEN lawyers for legal aid fraud.

But of course, when these events happen around the fringes of a stone age legal system where our top judge would rather listen to organ music and play ‘fly me to the moon’ than show up to answer questions in our sovereign Parliament about transparency in the judiciary, and perhaps give an indication as to why judges seem to think they are above the law, then what can we expect ?