Price Transparency And The SRA’s Risk Score System
It seems as though the conveyancing sector spent most of 2018 discussing and fretting over price transparency changes that came into force on December 6th.
Now that the deadline has passed, and regulated law firms are obligated to comply with the new regulations, many firms have questioned whether their efforts constitute compliance and what will happen if their changes are deemed unsatisfactory.
Immediately following the deadline, regulators, like the SRA were quick to reassure firms that this process is collaborative. Whilst the CLC “will assist firms to come into compliance, if the practice does not cooperate or act within an agreed timescale, we will take action based on the individual circumstances.”
The SRA have now disclosed its updated Risk Score Table which highlights the scores it attributes to various rule violations. Each rule breach is scored out of 10 with severe and serious breaches accruing a higher score.
In terms of price and service transparency, failure to publish details will mean a score of 3 in each area being added to a firm’s ongoing risk score; if this is a persistent issue, the sanction score could be reapplied at a further date.
In addition to price publication, inadequate costs information will also incur a risk score of 5.
If a firm’s complaints procedure information is not adequately placed or published clearly, the offending firm would also be given a score of 3. However, under the section entitled ‘relationship with regulator,’ failing to comply with regulators, including the Legal Ombudsman (LeO), could trigger a score of 8. Any firm failing to work alongside LeO in regard to complaints procedures could rack up many points that would then trigger more serious sanctions from the SRA.
Although the deadline for the digital badge is some time in Spring 2019, if a firm flouts this regulatory decision, it will also mean a risk score of 3 adding to the firm’s total.
Whilst a single infraction may not cause immediate investigation, it would seem that the scoring system could cause non-compliant firms to amass a lot of points very quickly which could then lead to further sanctions being taken.
Brian Rogers, Director of Regulation and Compliance at Riliance, said: “I have undertaken a significant amount of work in this area, and am frequently asked if a firm can find out their risk score. The answer is: not at present. However, be careful what you wish for as your insurers would be very interested in this data and it could lead to an increase in PII premiums or withdrawal of cover if your score is too high!”
Whilst regulators are insistent that, at least in the short-term, they are committed to collaborating with firms to achieve compliance, the SRA also has a clear scoring system that firms need to consider in order to avoid further sanctions in relation to price and service transparency.
Is your firm confident that it is compliant? What could these scores mean for the conveyancing sector?