Regulatory Reforms announced by SRA
A package of reforms created to provide law firms and solicitors with greater flexibility has been finalized by the Solicitors Regulation Authority (SRA).
Informed by key public consultations, the Looking to the Future programme has been developed over four years, with the involvement of 35,000 stakeholders, as well as members of both the public and profession.
The SRA state that the reforms are underpinned by a simpler set of Principles, Codes and rules for professionals, with the core focus being on prioritization of high standards. Stating that it aims to eradicate the unnecessary complex rules which can be a constraint on firms, the new Handbook will be 130 pages long – less than half the current 300 page length.
In an announcement made today, the regulator set out the changes to be introduced on a gradual basis from 2019:
- The creation of separate Codes of Conduct for firms and solicitors, as well as simple Account Rules which focus on the safety of client money.
- Freeing up solicitors to carry out ‘non-reserved’ legal work working within a business not regulated by a legal services regulator. The SRA state that these solicitors would be bound by their Code, along with all solicitors regardless of where they work, they would not be able to hold client money, nor would they need to have indemnity insurance. They also need to make clear to their service users what kind of protections they have in place – this includes not providing access to the SRA Compensation Fund.
- Allowing solicitors to deliver reserved legal services on a freelance basis. They would not be able to hold client money or employ staff, but must have appropriate indemnity insurance. These freelancers must also inform clients which regulatory protections apply.
- The introduction of a new enforcement strategy, providing greater clarity on when and how the SRA can take action against a solicitor or firm.
Across other areas, the regulator states that it has made changes to its original proposals having listened to various concerns.
These amendments include:
- Retaining and clarifying rules requiring solicitors in charge of a firm – or operating on a freelance basis – to have a minimum of three years experience.
- Dropping proposals to publish data about client complaints to firms, due to the need for contextual information.
- Changing plans around client money definitions, in order to allow the vast majority of firms to continue to function as they do currently.
In addition, the SRA has also published a series of Better Information reforms, with a view to improve access to legal services through increased transparency and service information.
Commenting on the plans was SRA Chief Executive, Paul Philip. He stated: We have worked closely with the profession and the public to develop our proposals over the last four years, engaging with more than 35,000 people. I am pleased there was widespread support for our overall approach and that we received so much useful feedback.
“We are now ready to make the changes that are needed to modernise both our regulation and the legal market. Our reforms focus on what matters: the high professional standards that offer real public protection rather than unnecessary bureaucracy that generates costs, constrains firms and hinders access to legal services. We believe that the changes will make it easier for firms and solicitors to do business and to meet the needs of those who need their services.”