SRA supervision results

SRA supervision results

As part of the SRA’s new outcomes focused approach, a pilot supervision project ran from January to September last year.

The project focussed on over 100 firms of various sizes across the country and has shown positive feedback from the profession.

The aim of the pilot was to test, define and develop the new approach to particular themes and events using either desk-based or visit-based supervision, or a combination of the two.

The SRA assessed the risk the firm posed and then decided on which approach to select.

Supervisors were encouraged to contact firms firstly by telephone followed by email, fax and letter, to discuss how they assessed and dealt with risks they faced.

Historically the SRA has used a written approach which was both time-consuming and impresonal.

Within the pilot sample, supervisors within the SRA’s taskforce identified and categorised six key risk areas affecting the firms;

£· Operational risks — 46%

£· Instability/financial failure —25.2%

£· Competency, fitness and propriety — 12.4%

£· Fraud/dishonesty affecting —8.9%

£· External perception — 4.5%

£· Market risks — 3%

Risk levels were shown to decrease during the supervision pilot period in most firms.

The pilot included more in-depth research into several areas such as first-tier complaints handling; orderly wind-down; treatment of third parties; payment protection insurance; mental health work contracts; and reaction to the Legal Services Board proposed Equality and Diversity questionnaire launched in July 2012.

Marc Baker, Director of Supervision, said: "The pilot we carried out was to test our new outcomes-focused approach so that we could concentrate resources where we believed there to be a serious or potentially high risk, rather than minor or low risk matters.

"The study certainly came back with a strong message that constructive engagement with firms helped them to identify and tackle risks, leading to a positive impact on their overall risk levels.”

My Baker said that the majority of those involved commented on how efficient the process had been.

Since October the Supervision team have been putting the new approach into action and reaction from the profession has continued to be positive.

Philip Horn of Plainlaw said of his experience in dealing with the SRA: " I would describe the SRA in its new role following the recent move to an "Outcomes” based system of regulation of the profession as FFF (Firm, Fair and Friendly).”

Reports on the Supervision process, and the detailed results of the pilot study can be downloaded from here

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