Closed consultations

Red Tape Initiative: Removing unnecessary regulations and simplifying processes

9 February 2013

Foreword by Charles Plant, Chair of the SRA Board

Charles Plant

Good regulation is essential for businesses to develop and thrive, and to protect consumers and uphold confidence in the market. However, the over-development of regulation can generate unnecessary burdens that can cost time and money, and stifle initiatives.

The SRA’s risk-based outcomes-focused regulation (OFR), introduced last year, allows us to foster a regime that focuses on the issues that really matter. At the heart of our new regulatory approach is the principle that we should only regulate when it is in the public interest to do so.

Where regulation serves little purpose, we need to remove it. Since we introduced OFR we have become increasingly aware there remain some bureaucratic processes which have been carried through from the old, rules - based, approach to regulation. I have personally received a number of anecdotal examples.

It is with this in mind that last month I announced our own 'Red Tape Challenge'. My aim is for the SRA not only to become a more effective regulator, but also to champion better regulation in the legal services sector and beyond. Our initiative challenges us to ensure that we regularly review all of our processes and regulations, not just the old ones. Our work will only be achieved when our Code of Conduct and Handbook contain no more than is necessary to protect the public interest - and what is unnecessary is taken away.

In parallel to this we are also consulting on the application of our Handbook for those firms that have offices based internationally to ensure the SRA Principles are met, whilst simplifying processes and doing away with unnecessarily bureaucratic regulation.

Significant progress has already been made. In this consultation we outline some examples of processes that have either been stripped back or improved. We are now consulting on a wider range of proposals. Training regulations are a major theme in this first 'red tape' consultation where we have identified a number of areas that can be removed or amended ahead of the Legal Education and Training review.

We still have a way to go and I am challenging you to let us know where, in your opinion, our regulations and processes are unnecessary and could be removed, curtailed or simplified, without damaging our ability to regulate in the public interest. We will consider every suggestion that we receive. Where we cannot remove a regulation or process we will explain why and look at how we could do it more effectively. And where we can, we will.

I look forward to receiving your suggestions.

Charles Plant

Chair, SRA Board

Our vision

Our vision is simple; to remove, curtail or simplify regulations and processes which are not demonstrably in the public interest, impeding both those we regulate and our ability to focus on the issues that really matter. This will only be achieved when our Code of Conduct and Handbook contain no more than what is necessary - and what is unnecessary is taken away.

Purpose of the consultation

  • 1.

    The purpose of this consultation is to seek views on our initial proposals to remove, curtail and simplify a number of processes and regulations that do not appear to benefit the public, and to ask where we can make further changes.

  • 2.

    The introduction of risk-based outcomes-focused regulation (OFR) in October 2011 removed the old, rules-based, approach to regulation, replacing it with a regulatory regime that focuses on the high level Principles and Outcomes that should drive the provision of services to clients.

  • 3.

    In order to embed OFR, a number of processes have been removed or simplified - but we know we can do more. We encourage firms to manage their own risks. Many of the proposals in this document are about enabling firms and providers to manage their own risks whilst reducing their administrative burdens at the same time. This is entirely consistent with our new risk-based approach and allows us to focus on the areas of greatest risk and the issues that really matter.

  • 4.

    This consultation is a continuation of our drive to deliver our vision and champion better regulation, but it is by no means the end. We are committed to reviewing all of our regulations and processes, both old ones and new ones, on a regular basis, ensuring they are fit for purpose. This will allow us to focus on the issues that matter most. The proposals outlined in this consultation are focused on those processes which can be removed or amended, relatively easily, in the short term. In the medium to longer terms we are looking at more complex areas where we can reduce bureaucracy and simplify our processes. For example, we are developing the application process for alternative business structures following our experience over the past year. We realise there are areas where we can be more proportionate, and areas where it is necessary to be extremely robust. Consequently, we are looking at how we can take a more risk-based and proportionate approach to applications.

  • 5.

    In this consultation we:

    • Set out an example of some changes that have already taken place.
    • Seek views on our ten initial proposals. Many of these relate to Training Regulations and require changes to our Handbook. We plan to start making changes to the regulatory framework from April 2013.
    • Open up this challenge to all, giving everyone we regulate, those who use the legal services we regulate, and others with an interest in legal regulation, the opportunity to suggest more ways we could remove, curtail or simplify any of our regulations or processes without compromising our ability to regulate in the public interest.
  • 6.

    The consultation runs for 8 weeks. It opens on 14 December 2012 and closes on 8 February 2013. We are setting this deadline for the first phase of our red tape challenge so that we can begin implementation as swiftly as possible; but we will remain open to, and will encourage, further suggestions beyond that date.

Our work to date

The SRA has already reviewed a number of regulations and processes as part of our Red Tape Initiative. As a result, some changes have been made to help firms reduce administrative burdens and make it easier to fulfil our regulatory requirements, saving time and money.

Example: To enable the Authorised Signatories (AUS) and Organisational Contacts (ORC) to manage the regulatory applications and data for all individuals within their firm.

Why was a change in process required?

The SRA received considerable comments about how firms manage the data of individuals employed within their firm. Historically, only the individual applicant has been able to discuss their application with the SRA. We acknowledge that with the introduction of firm-based regulation and the approval of a COLP and COFA, firms wish to have more control over the handling of regulatory applications for their staff. This change enables the firm to be satisfied that all regulated individuals, subject to their consent, are compliant with SRA requirements.

What changes have been made?

  • We have provided the capability for the AUS and ORC to renew the practising certificates and registrations for all regulated individuals within the firm.
  • With effect from 1 November 2012 we have provided the ability for the ORC or AUS to manage the data of the relevant individuals within their organisation through their online mySRA account. This includes notifying the SRA of all leavers and joiners and being able to correct data.
  • We have enabled the firm to have access to all individuals practising certificates and also provided the option to print a practising certificate if necessary.
  • We have changed the approach for resolving queries within the SRA Contact Centre. The nominated AUS/ORC can now discuss an individual's pending regulatory application.

Impact

As a result, firms are now able to manage the data of individuals within their firm more efficiently, saving time and resources within their organisations.

Next Steps

We will continue to implement further operational improvements and efficiencies throughout 2013, with a key focus on regulatory applications. Our aim is to:

  • Review all paper-based applications and guidance notes to ensure that they are clear and easier to complete.
  • Enable all non-practising solicitors to complete the annual keeping of the roll exercise online. This will provide all non-practising solicitors the with flexibility to track their application and reduce administrative burdens by saving time and money.

We will continue to bring further paper applications online. Our objective is, where possible, to enable a firm's organisational contact (ORC) to manage the submission of the online regulatory application on behalf of an individual. This will ultimately enable the firm to track the progress of applications, make them aware of any delays to applications and ensure that both the firm and all employees are compliant with their regulatory obligations.

Our challenge to you

We have already made a number of changes but we know we can do more. The proposals outlined in this consultation are just the start of a continuing initiative to ensure that we remove any burdensome regulations and processes that serve no purpose in protecting the public interest.

We are now extending our challenge to everyone we regulate and our question is simple: Where else, in your opinion, could our regulations and processes be removed, curtailed or simplified?

All suggestions we receive will be considered and a full response will be published. Where we cannot remove a regulation or process, we will explain why and look to see if we can do it differently. Consumer protection is paramount, but if there is insufficient evidence that removing or curtailing any of our regulations will impede our ability to achieve our regulatory objectives, we will get rid of it.

Ten initial proposals

This consultation seeks views on the removal or amendment of ten regulations and processes that have been identified since OFR was launched in October 2011. We emphasise that these ten proposals are just a start - we welcome suggestions from across the legal sector, from consumers of legal services, and others with an interest, about other areas where we can remove, curtail, and simplify.

A key priority for the SRA is to ensure that firms and the SRA maximise the benefits of OFR by removing outdated and bureaucratic processes which have been carried through from the old, rules-based approach and are no longer necessary. Some of these are relatively minor changes which are likely to have minimal impact on consumers but will simplify the regulatory landscape for those we regulate and enable firms to manage their own risks more effectively.

We are particularly interested in views on the impact, and unintended consequences, that any of these proposals may have on our ability to protect consumers and uphold confidence in legal services.

A number of the proposals relate to our regulation of the solicitors' qualification framework. We are undertaking a fundamental review of this framework which we will begin consulting on and implementing in 2013, following the publication of the final research report in January. We do not think it would be advisable to make any fundamental changes to the regulatory framework for education and training ahead of the outcomes of the review. However, we have identified a number of regulations and processes which, in the context of our move to outcomes focused regulation, can be removed or amended ahead of the implementation of the review, to more immediately ease unnecessary regulatory burdens on firms and individuals involved in the education and training process.

Where changes are required to our Handbook and Code of Conduct, the draft amendments are included in the Appendix.

Proposal 1 - Remove restrictions on charging by in-house lawyers employed in not-for-profit organisations.

To delete Rule 4.16 (b) (i) and (ii) of the Practice Framework Rules (PFR) to enable in-house lawyers employed by a law centre, charity or other non-commercial advice service, to charge for the provision of legal services.

What was the original purpose of this regulation?

What is now Rule 4.16 (b) (i) and (ii) was initially made as part of a package of changes to enable the provision of legal services by solicitors employed in Law Centres even though they were not working within traditionally structured law firms.

Why are we recommending amending this regulation?

During 2012 we have considered this Rule in the context of our development of arrangements to enable law centres and similar not-for-profit advice agencies to become licensed under the Legal Services Act (LSA) 2007. In April 2012 the Legal Services Board (LSB) published a consultation on the way in which the licensing of these Special Bodies (as defined in the LSA 2007) should take place and the timetable for it. These organisations are licensable under the LSA 2007 if they undertake reserved legal activities but the Act provides for a grace period before the requirement to be licensed takes effect.

In its initial consultation paper the LSB raised the issue of the removal of the current SRA rule that prevents solicitors employed in such bodies from charging clients (unless the client is legally aided or, in contentious cases, costs are recoverable from the other party). In its response to the consultation the SRA did not, at that point, agree that the prohibition should be removed but identified a number of relevant factors and undertook to consider the issue further in the light of further discussions and the timing of the end of the Special Bodies grace period.

Since the response to consultation was made, we have engaged directly in discussions with a range of law centres and advice agencies on this issue and in preparation for developing the Special Bodies licensing arrangements. We have also had the opportunity to consider all of the published responses to the LSB’s consultation and discussed those responses with the LSB. The LSB has now announced that it plans that the grace period for such agencies which enables them to continue to provide reserved legal activities to the public without being licensed will not end before April 2015.

In-house solicitors employed by law centres, charities and other non-commercial organisations play an important role in providing access to justice to some of the most vulnerable members of society. The sector is experiencing significant additional pressures on its resources as a result of changes to legal aid funding and reductions in local authority funding. As a result, many are considering supplementing their resources by charging for some of their services. These decisions are being reflected by the increasing number of applications being received for waivers of this Rule. Those organisations which provide reserved legal activities will be able to charge for services once licensed after April 2015.

In the light of this further consideration and discussion, and having considered the value of maintaining this Rule we are proposing to remove it as:

  • it is not consistent with the principles of better regulation in that it does not address any identifiable regulatory risk that is not addressed by other regulatory provisions;
  • the timing of the implementation of licensing for Special Bodies, now announced by the LSB, means that this issue requires consideration at this point rather than waiting for the implementation of licensing;
  • its maintenance is likely to harm the "access to justice" regulatory objective in the immediate future and disproportionately affect a particularly vulnerable group of consumers;
  • it is consistent with the evolution of these entities as they prepare to become licensed under the LSA. It is clear that a number of these agencies will develop charging arrangements for some clients and areas of their activities in order to support their wider work. Given the planned move to licensing, it is preferable that work on these approaches is undertaken by them before, and in the context of, the implementation of licensing. This will better enable us to identify appropriate regulatory arrangements that address any regulatory risks posed by these bodies in the context of how they, and the services they provide, will operate in the future rather than as they were in the past.

We have considered whether making this change would increase the risk to any of the other statutory objectives and in our response to the LSB’s consultation we questioned whether implementing this change, prior to Special Bodies licensing, would create risks to the achievement of the "promoting competition" regulatory objective, given that the regulatory approach for these bodies would differ from that for recognised and licensed bodies (including the scope and cost of regulatory requirements). However, given the relatively low number of these bodies compared to the number of authorised bodies and the narrow band of legal specialisms on which they focus, we see no basis for a negative impact on competition across the sector.

It is important to note, and we have considered, the fact that prior to licensing, entity regulation does not apply to Special Bodies. This means that the obligations to ensure regulatory compliance (including, for example, compliance with the Solicitors Accounts Rules if client money is held) rest on the individual employed solicitors rather than the entity. Given this, a number of SRA requirements which apply only at the entity level (such as the requirements to appoint compliance officers) do not apply. However, we are satisfied that, given the risks posed by these entities and the low level of identified compliance issues in the past, this approach is appropriate during the remainder of the grace period provided by the Act. All issues regarding the way in which entity-based regulatory requirements should apply to these bodies are being considered in the current development of the Special Bodies licensing regime.

If no change is made to this rule there is a significant risk that this sector will be negatively impacted with a consequent harm to consumers. The only route open for solicitors employed in these agencies to mitigate that risk would be to apply for individual waivers of the provision. That process imposes cost on the applicants and the SRA and lacks certainty and transparency.

Consultation questions

  • Do you agree with the proposal?
  • Are there any consequences, risk and/or benefits that have not been outlined?
  • Are there any costs that have not been anticipated?

Proposal 2 - Allow in-house solicitors employed by local authorities to charge charities for legal services

To amend Rule 4.15 (e) Practice Framework Rules to enable local government in-house solicitors to act for charities and to make a charge for both contentious and non-contentious work

Rule 4.15 (a) permits a solicitor employed in local government to act for another organisation or person to which or to whom the employer is statutorily empowered to provide legal services, subject to the conditions, if relevant, specified in (b) to (g) of that rule. Condition (e) prohibits charging a charity for non-contentious work and in relation to contentious work, requires the employer to indemnify the charity in relation to the solicitor's costs in so far as they are not recoverable from any other source.

What was the original purpose of this regulation?

PFR 4.15 (e) replaced a previous rule and allows in-house solicitors, who would not normally be able to provide legal services to anyone, other than their employer, to provide services to a charity. As charging is not allowed by this exception, it was seen to provide a service that would not otherwise be available to a charity, thereby giving greater access to justice.

Why are we recommending amending this regulation?

Local government is undergoing significant change. In particular, services and organisations that have traditionally been a part of the local authority are being transformed into stand alone entities; often charities. This is particularly the case for schools leaving local authority control to become academies. In addition, local authority departments are being required to manage within tight budgets and, therefore, the ability of council legal departments to provide services to such bodies without, at least, covering their overheads, is severely limited.

We are undertaking a comprehensive review of our approach to regulating in-house solicitors. As a part of that review we have been engaging with solicitors employed within local authorities and their representative organisations. It is clear from those discussions that local authority legal departments, and the solicitors employed within them, are facing new challenges as the nature of local authority service provision generally is changed rapidly and radically.

The basis on which the Practice Framework Rules have been applied to local authority solicitors was one founded on stable organisational structures within local authorities, i.e. that local authorities overwhelmingly provided services from within the organisation. However, this pattern no longer holds as local authorities change their structures and the ways in which they provide all their services to the public. It is this changing structure of local authority provision that our in-house review will need to address during the course of this year. However, our discussions with local authority solicitors have identified one unintended effect of the current rules which we intend to address ahead of the general review.

Solicitors employed by a council currently provide legal services to maintained schools within their local area under service level agreements for which a charge is made in both contentious and non-contentious matters. Many schools have applied for academy status under the Academies Act 2010. By virtue of section 12(1) of the Academies Act, the owner of an academy will be a charity and as a consequence no charge can be made for services delivered.

Amending the provision to allow for charities to be charged would enable solicitors' employed by the council to continue to provide specialist legal services to the academies. Typically those services would include advice on the academies legal obligations under education law, child exclusions, special educational needs, parental access to school records, compliance with data protection law and would include both contentious and non-contentious matters.

In addition, by virtue of this amendment, solicitors employed by local authorities will be able to continue to provide services to other charities and charge for those services, which will provide flexibility to continue to provide services to other charities assuming roles previously undertaken within the local authority itself. Any services offered must be in compliance with the relevant legislation with note being given to section 15 of the Legal Services Act.

Having considered the value of maintaining this Rule we are proposing to amend it as it is not consistent with the principles of better regulation in that it does not address any identifiable regulatory risk that is not addressed by other regulatory provisions. No downside risks have been identified.

If no change is made to this rule there is a risk that local authority solicitors will be prevented from delivering services in a way which is in the public interest unless waivers are granted. That process incurs time delay and cost and lacks certainty and transparency.

Consultation questions

  • Do you agree with the proposal?
  • Are there any consequences, risk and/or benefits that have not been outlined?
  • Are there any costs that have not been anticipated?

Proposal 3 - Approval of RELs and RFLs as new managers and owners

It is proposed that changes are made to the SRA Authorisation Rules 2011 so that Registered European Lawyers (RELs) and Registered Foreign Lawyers (RFLs) are deemed to be approved as suitable to be managers or owners of authorised bodies. This would be subject to strict notification requirements on the part of the individuals concerned and additional safeguards including the possibility of withdrawal of the approval where the individual is not considered to be suitable for that appointment.

What was the original purpose of these requirements?

The SRA Authorisation Rules contain requirements about the approval of new managers and owners. Currently RELs and RFLs are required to apply for approval whereas solicitors, provided that they satisfy certain criteria, are deemed to be approved. The SRA has the right to refuse such applications for approval, grant an application subject to conditions, or ask for any further supporting documentation from the applicant.

Why are we recommending amending these provisions?

Currently, an individual applying to become a REL or RFL would need to complete the initial application process and be registered before that individual is able to apply for approval as a manager or owner of an authorised body. This creates extra administrative burdens for both the applicant and the SRA, which has cost and resources implications for both parties.

It is proposed that the SRA Authorisation Rules should be amended so that RELs and RFLs are deemed to be approved as suitable to be owners or managers in the same way that solicitors are currently deemed to be approved. The RELs and RFLs would only be deemed where they satisfy certain criteria including no conditions on their registration and prior notification requirements. Additional amendments would need to be made to make it clear that the SRA may, at any time, require the production of information or documents in order to satisfy itself that a person who has been approved (including by way of a deemed approval) meets or continues to meet the criteria for approval. The SRA may withdraw such approval if it is not so satisfied.

Decisions on when further information may be sought will be driven by our assessment of the risk to delivering our regulatory objectives. For example, the appointment of a new RFL or REL manager to a firm with a poor regulatory history or poor history of compliance or proper risk management. Making the change proposed will place an increased onus on firms taking responsibility for proper due diligence and checking of applicants before appointment. These changes are therefore consistent with the development of risk-based outcomes-focused regulation, with the primary responsibility for compliance and good risk management lying with regulated entities.

The SRA will also review the initial application and renewal processes for RELs and RFLs to ensure that they are sufficiently robust to address any increased risks associated with the proposed approach.

Consultation questions

  • Do you agree with the proposal?
  • Are there any consequences, risk and/or benefits that have not been outlined?
  • Are there any costs that have not been anticipated?

Proposal 4 - COLPs and COFAs in related entities

Where there is a main UK-regulated body, it is proposed that it should be possible for the Compliance Officer for Legal Practice (COLP) and the Compliance Officer for Finance and Administration (COFA) for that body to be able to apply to be the COLP and COFA for any related entities, without the need to be a manager or an employee of the related entities. It is also proposed that it should be possible to complete applications to the SRA relating to multiple related entities in one process.

What was the original purpose of this regulation?

Under the SRA Authorisation Rules every authorised body must have a COLP and a COFA. Candidates for these roles must meet certain criteria set out in Rule 8 and submit to the application process in Part 4 of the Rules. These include that the proposed compliance officer must be a manager or employee of the authorised body. Similar provisions in the SRA Practising Regulations 2011 apply to recognised sole practitioners.

The purpose of these requirements is to ensure that the SRA is able to consider whether the nominated individual is a suitable person to be a compliance officer of the entity with reference to the SRA Suitability Test and other requirements. The process allows the SRA to grant or refuse the application or to make it subject to conditions. The requirement for the compliance officers to be managers or employees of the authorised body is important to ensure that the individuals have sufficient authority in the body to ensure compliance with the requirements.

Why are we recommending amending this regulation?

The current requirements mean that an approval is granted to an individual in respect of a specific entity. It is not transferable to any other entities and this means that an individual seeking approval as the COLP or COFA of any related entity needs to submit a new application in respect of each entity. An individual will also not be able to be a COLP or COFA in a related entity if that individual is neither a manager nor an employee of that related entity. A number of firms have structures whereby they operate, effectively, as a single entity although they comprise a number of separate authorised bodies. For good control and risk management reasons it may be appropriate for these entities to have a single COLP or COFA operating across all of the technically separate entities in the group. However, at present, because they may be a manager of only one of the entities (or the employee of a single entity) they need to apply for a waiver of the "manager/employee" provision and complete multiple applications. These requirements, and the need to make separate applications, have financial and resource implications for both the applicant and the SRA.

Therefore, we propose that the SRA Authorisation Rules and the SRA Practising Regulations are amended so that the requirements for the COLP or COFA to be a manager or an employee of an entity will not apply in certain limited circumstances. This will not mean that the approval will be automatic; the SRA will still be able to grant or refuse the application or make it subject to conditions.

It is also proposed that amendments will be made to the application forms so that an applicant can make one application to cover multiple entities. This will enable us to receive applications for more than one entity, but we would still be able to refuse all or any part of the application or request further information.

Consultation questions

  • Do you agree with the proposal?
  • Are there any consequences, risk and/or benefits that have not been outlined?
  • Are there any costs that have not been anticipated?

Proposal 5 - Remove the need for SRA approval for trainee secondments

To amend Regulation 11 of the SRA Training Regulations to remove the need for training establishments to apply for approval to second their trainees to other organisations.

What was the original purpose of this regulation?

Any organisation wishing to take trainee solicitors has to be authorised by the SRA specifically for that purpose and must meet certain regulatory requirements. We refer to these organisations as authorised training establishments.

The current Training Regulations require authorised training establishments to apply for our approval prior to seconding trainees to organisations that are not authorised by us to take trainees, and for any secondment lasting for more than one year. Secondments for less than one year, to overseas branch offices or any other organisation that are already authorised to take trainees do not require such approval.

This regulation was originally made in order to avoid trainees undertaking significant proportions of their training at organisations not authorised by us as training establishments, or even regulated by us at all. Its purpose was to reduce the risk that a trainee would receive inadequate training during their training contract and that the training received did not meet our regulatory requirements. The ultimate objective being that a trainee should be competent to practise as a solicitor at the end of the training contract period.

Why are we recommending amending this regulation?

We have seen a significant growth in the use of secondments for trainees and those firms which are able to offer secondments see them as a clear opportunity and benefit in terms of experience and development for the trainees who take them up. All authorised training establishments are required to nominate an individual as a training principal and the training principal has a regulatory responsibility to ensure that the training undertaken by the trainees meets our requirements. The training principal also has a responsibility to sign off the trainee at the end of the training contract period but they must only do so if they consider the trainee to be competent to practise as a solicitor.

A significant proportion of authorised training establishments now also have in place the added protections of licensure or recognition and the regulatory roles of COLP and COFA. We consider, therefore, that the question of whether or not a proposed secondment will enhance a trainee's training experience or detract from our regulatory requirements is best managed by the training principal and the authorised training establishment rather than by the SRA. Any potential risks can be managed through our new regulatory regime and the amendment will remove an unnecessary regulatory burden for training establishments.

Consultation questions

  • Do you agree with the proposal?
  • Are there any consequences, risk and/or benefits that have not been outlined?
  • Are there any costs that have not been anticipated?

Proposal 6 - Introduce a lifetime authorisation for training establishments

To remove the requirement for authorised training establishments to seek reauthorisation every three years

What was the original purpose of this regulation?

Regulation 2 of the SRA Training Regulations 2011 Part 2 - Training Provider Regulations requires any training establishment or any other applicant wishing to take a trainee to be authorised by the SRA for that purpose. Our policy is that authorisation must be renewed every three years. The purpose of the requirement for reauthorisation was to check whether any significant changes had been made within the firm since the original authorisation which would impact on the firm's capability to provide adequate training to trainees.

Why are we recommending amending this process?

As discussed above, all authorised training establishments must nominate a training principal who has a regulatory responsibility to ensure that the training undertaken by trainees meets our regulatory requirements. In addition, the vast majority of training establishments now have the additional protections of licensure or recognition, as well as the COLP and COFA roles, and they have a regulatory responsibility to notify us of any material changes which might affect the firm's capability to operate effectively, including to train and manage their staff. We consider, therefore, that adequate protections already exist to require authorised training establishments to provide an adequate level of training for their trainees without the need for periodic reauthorisation.

There are a small number of authorised training establishments which are not licensed or recognised bodies, e.g. commerce and industry organisations and local government departments. These organisations do not have the additional regulatory requirements of licensed/recognised bodies but they do have the regulatory role of training principal. We are also open to discussion about the possibility of removing the requirement for periodic reauthorisation as a training establishment for these organisations on the basis that the regulatory responsibility falls to the training principal to ensure that adequate provision is made for training trainees. We would welcome views on this suggestion.

The proposed amendment would represent the removal of a significant regulatory burden for authorised training establishments but would represent a low risk due to the added protections now in place under our new regulatory regime.

The current drafting allows lifetime and periodic authorisation, as well as conditions and, ultimately, removal of authorisation if we find that training provision is inadequate. No formal amendment to the regulations is required because Regulation 2.4 Part 2 allows authorisation for "such period as we consider appropriate".

Consultation questions

  • Do you agree with the proposal?
  • Are there any consequences, risk and/or benefits that have not been outlined?
  • Are there any costs that have not been anticipated?

Proposal 7 - Remove half-equivalence provisions in training contract reductions

To amend Regulation 7 of the SRA Training Regulations 2011 Part 2 - Training Provider Regulations to remove the 'half-equivalent' provision which recognises previous legal experience but only allows a reduction in the period of a training contract by half of this time.

What was the original purpose of this regulation?

All trainee solicitors must complete a two-year training contract prior to seeking admission as a solicitor. Authorised training establishments are able to grant a reduction in the period of a trainee's training contract in recognition of previous experience gained in the legal sector prior to the start of the training contract. A number of restrictions apply in relation to this provision, including a limit on the maximum reduction of time to six months and a requirement that the previous experience must be sufficiently recent, relevant and appropriately supervised. In addition, the time reduced from the training contract is counted at half-equivalence. In other words, in order to gain the maximum six months reduction a trainee must demonstrate twelve months relevant experience.

The aim of the restrictions was to enable authorised training establishments to recognise and give credit for prior relevant experience but, at the same time, to require the trainee to complete a significant period of their learning and development within a formal training contract. The perceived risk was that the experience which had taken place outside the formal training contract could have lacked the supervisory and structured requirements of the training contract.

Why are we recommending amending this regulation?

As already discussed, all authorised training establishments have to nominate a training principal who is responsible for ensuring that trainees have adequate training during their training contract and ensures that they are only signed off at the end of their training contract if the training principal considers them to be competent to practise as a solicitor. We consider that the training principal is best placed to make a judgment about the quality of the trainee's previous experience and to assess the risk involved in agreeing to a reduction in time from the training contract and training principals already decide whether or not a trainee should be granted a reduction of time from their training contract for previous experience. This proposal logically extends the discretion given to training principals in relation to the quality of previous experience. Allowing authorised training establishments to fully recognise previous experience (i.e. not at half-equivalence) but retaining the limit of six months reduction will enable individuals to be rewarded like-for-like for previous legal employment and create a more appropriate balance between requiring the trainee to serve a significant period of time in a formal training contract whilst at the same time providing full recognition (up to a maximum of six months) of the trainee's previous experience. Removal of this restriction will remove an artificial barrier for prospective trainees but represent a low risk due to the protections afforded by the regulatory role of the training principal.

Consultation questions

  • Do you agree with the proposal?
  • Are there any consequences, risk and/or benefits that have not been outlined?
  • Are there any costs that have not been anticipated?

Proposal 8 - Remove the time limit or an academic award to remain valid

To amend Regulation 4 and 5 of the SRA Training Regulations 2011 Part 1 - Qualification Regulations to remove the time limit on certificates of completion of an academic award.

What was the original purpose of this regulation?

The validity period of the academic award (i.e. Qualifying Law Degree, Graduate Diploma in Law or a Common Professional Examination) in terms of eligibility to commence the Legal Practice Course (LPC), is set at seven years, although the SRA has the discretion to revalidate certificates of completion of the academic stage if we are satisfied that an individual has undertaken ongoing legal updating and exceptional circumstances exist. The purpose of this time limit was to minimise the risk that graduates from the academic stage of training would commence the vocational stage of training without the necessary underpinning knowledge to do so. It did this by giving the academic qualification a "shelf-life" beyond which it would be considered out of date. The ultimate objective was to minimise the risk of individuals who were not competent being admitted as a solicitor.

Why are we recommending amending these regulations?

The existing regulation means that the SRA assumes responsibility for management of the risk of whether someone is fit to proceed from the academic to the vocational stage of training and we do so by use of a universal time limit which applies to all. However, the time limit is not based on any specific evidence regarding decline of knowledge and currency following degree level study. We consider that both the vocational stage provider, through their admissions policies and the information they provide to students wishing to embark on the vocational course, as well as the graduate themselves are best able to monitor and assess the risks of investing the time and resource in the vocational stage of training some years after completing the academic stage.

The effect of this proposal is that individuals with a Certificate of Completion of the Academic Stage from the SRA will be able to proceed onto the vocational stage of training at any time after successful completion of the academic stage. The risks associated with an individual whose academic stage of training is not up to date will be to the individual themselves in terms of the time and cost of the vocational stage of training rather than to clients or the public because safeguards exist in the form of the Legal Practice Course and the training contract through which an individual must demonstrate that they are competent and up to date before qualification as a solicitor. Whilst the risks of removing this restriction are considered to be minimal, the amendment will represent the removal of an unnecessary regulatory requirement and barrier to qualification for some individuals.

Consultation questions

  • Do you agree with the proposal?
  • Are there any consequences, risk and/or benefits that have not been outlined?
  • Are there any costs that have not been anticipated?

Proposal 9 - Remove the need for student re-enrolment after 4 years

To amend Regulation 14 of the SRA Training Regulations 2011 Part 1 - Qualification Regulations to remove the need for student re-enrolment after 4 years.

What was the original purpose of this regulation?

All students have to enrol with the SRA before starting the Legal Practice Course. This process acts as an early check on a prospective solicitor's character and suitability. We also require students to apply for periodic re-enrolment to manage the risk involved in character and suitability issues.

What changes have already been made?

In version 1 of the Handbook, in 2011, we moved from an annual requirement for student re-enrolment to a four-year enrolment period.

Why are we recommending amending this regulation?

The purpose of the requirement for re-enrolment was for the SRA to make a periodic check on a student's suitability before their admission and to reduce the risk of unsuitable individuals qualifying as a solicitor. This risk is now being managed through the enhanced admission process which includes Criminal Records Bureau disclosure and the enhanced Suitability Test. These enhancements, together with the ongoing requirement for students to notify us of any new information which might affect their character and suitability, minimise the risk of unsuitable individuals being admitted. In addition, data collected over recent years suggests that only a very small proportion of applications for re-enrolment indicate new character and suitability issues. Amending the regulations to remove the requirement for re-enrolment for students is very low risk, therefore, but will remove a regulatory burden for the individuals concerned.

Consultation questions

  • Do you agree with the proposal?
  • Are there any consequences, risk and/or benefits that have not been outlined?
  • Are there any costs that have not been anticipated?

Proposal 10 - Remove the need for QLTS certificates of eligibility in certain, specified circumstances

To amend Regulation 2.5 and add a new Regulation 2.6 to the Qualified Lawyers Transfer Scheme Regulations (QLTSR) 2011 to enable us to allow applicants who do not need to take any of the QLTS assessments to progress to admission without a certificate of eligibility being issued.

What was the original purpose of this regulation?

The vast majority of applicants under the Qualified Lawyers Transfer Scheme (QLTS) will have to take some formal assessments prior to applying for admission as a solicitor. For this reason, we require QLTS applicants to follow a two stage process: firstly they apply to us for a certificate of eligibility to take the assessments and secondly, once they have successfully completed the assessments, they are required to apply to us for admission as a solicitor. The requirement to apply for the certificate of eligibility was introduced to ensure that applicants have their eligibility checked by us before they register with the assessment body and proceed to the assessments. The intention was to minimise the risk of unsuitable individuals taking the assessments only to be refused admission at a later date. The ultimate objective was to reduce the risk of unsuitable individuals being admitted as a solicitor.

Why are we recommending amending this regulation?

Some QLTS applicants, notably, at the moment, Republic of Ireland solicitors who benefit from Directive 2005/36 and Northern Irish solicitors, do not always have a requirement to take any of the formal assessments prior to applying for admission and yet they still have to apply both for a certificate of eligibility as well as for admission. We are proposing this amendment to remove the onerous costs and regulatory burden for applicants who do not have to take any assessments and to ensure there are no artificial barriers to gaining admission which would put us in breach of Directive 2005/36. The risks associated with this amendment are minimal since these applicants will still be subject to a full assessment of eligibility and suitability prior to admission.

Consultation questions

  • Do you agree with the proposal?
  • Are there any consequences, risk and/or benefits that have not been outlined?
  • Are there any costs that have not been anticipated?

Appendix 1: Proposed amendments to regulations (where applicable)

Proposal 1 - Remove restrictions on charging by in-house lawyers employed in not-for-profit organisations

Removal of charging provisions in Rule 4.16 (b)

Law Centres, charities and other non-commercial advice services

  • 4.16

    If you are employed by a law centre or advice service operated by a charitable or similar non-commercial organisation you may give advice to and otherwise act for members of the public, provided:

    • (a)

      no funding agent has majority representation on the body responsible for the management of the service, and that body remains independent of central and local government;

    • (b)

      no fees are charged save:

      • (i)

        where the client is publicly funded; or

      • (ii)

        where the organisation indemnifies the client in relation to your costs insofar as they are not recoverable from any other source;

    • (c)(b)

      all fees you earn and costs you recover are paid to the organisation for furthering the provision of the organisation's services;

    • (d)(c)

      the organisation is not described as a law centre unless it is a member of the Law Centres Federation; and

    • (e)(d)

      the organisation has indemnity cover in relation to the legal activities carried out by you, reasonably equivalent to that required under the SRA Indemnity Insurance Rules.

Proposal 2 - Allow in-house solicitors employed by local authorities to charge charities for legal services

Local government

  • 4.15

    If you are employed in local government you may act:

    • (a)

      for another organisation or person to which or to whom the employer is statutorily empowered to provide legal services, subject to the conditions in (b) to (g) below;

    • (b)

      for a member or former member of the local authority, provided that:

      • (i)

        the matter relates to or arises out of the work of the member in that capacity;

      • (ii)

        the matter does not relate to a claim arising as a result of a personal injury to the member;

      • (iii)

        you are satisfied that the member does not wish to instruct some other lawyer; and

      • (iv)

        no charge is made for your work unless those costs are recoverable from some other source;

    • (c)

      for a company limited by shares or guarantee of which:

      • (i)

        the employer or nominee of the employer is a shareholder or guarantor; or

      • (ii)

        you are, or an officer of the employer is, appointed by the employer as an officer of the company, provided the employer is acting in pursuance of its statutory powers;

    • (d)

      for lenders in connection with new mortgages arising from the redemption of mortgages to the local authority, provided:

      • (i)

        neither you nor any other employee acts on behalf of the borrowers; and

      • (ii)

        the borrowers are given the opportunity to be independently advised by a qualified conveyancer of their choice;

    • (e)

      for a charity or voluntary organisation whose objects relate wholly or partly to the employer's area, provided that there is no charge to the charity or voluntary organisation in non-contentious matters, and in contentious matters the employer indemnifies the charity or voluntary organisation in relation to your costs insofar as they are not recoverable from any other source;

    • (f)

      for a patient who is the subject of a Court of Protection Order where you are acting for a work colleague (under Rule 4.4 to 4.6 above) who is appointed as deputy for the patient; or

    • (g)

      for a child or young person subject to a Care Order in favour of the employer on a application to the Criminal Injuries Compensation Authority

Proposal 3 - Approval of RELs and RFLs as new managers and owners

Proposed amendments to the SRA Authorisation Rules.

  • 13.2

    The SRA will deem a person to be approved as suitable to be a manager or owner of an authorised body under this Part if:

    • (a)

      that person is:

      • (i)

        a solicitor who holds a current practising certificate; or

      • (ii)

        an authorised body;

      • (iii)

        an REL; or

      • (iv)

        an RFL

    • (b)

      there is no condition on the person's practising certificate, registration or authorisation as appropriate, preventing or restricting them from being a manager, owner or interest holder of an authorised body or being a sole practitioner;

    • (c)

      the SRA is notified on the prescribed form at least 7 days in advance of the person becoming a manager or owner of the authorised body; and

    • (d)

      the SRA has not withdrawn its approval of that person to be a manager or owner under Rule 17.

Move Rule 14.8 to become a new Rule as follows:

Production of information or documentation

  • 14A

    The SRA may at any time require the production of information or documentation from:

    • (i)

      a person who has been approved as an owner, manager or compliance officer under this Part (including a deemed approval under Rule 13.2);

    • (ii)

      an authorised body of which that person is a manager, owner or compliance officer; or

    • (iii)

      the body which originally obtained approval for that person and holds information and documentation under Rule 14.2(c); in order to satisfy the SRA that the person met, meets, or continues to meet the criteria for approval.

Proposal 4 - COLPs and COFAs in related entities

Proposed amendments to the SRA Authorisation Rules.

  • 8.5

    Compliance officers

    • (a)

      An authorised body must have suitable arrangements in place to ensure that its compliance officers are able to discharge their duties in accordance with these rules.

    • (b)

      Subject to Rule 8.5(h) an authorised body must at all times have an individual:

      • (i)

        who is a manager or an employee of the authorised body;

      • (ii)

        who is designated as its COLP;

      • (iii)

        who is of sufficient seniority and in a position of sufficient responsibility to fulfil the role; and

      • (iv)

        whose designation is approved by the SRA.

       
    • (d)

      Subject to Rule 8.5(i) an authorised body must at all times have an individual:

      • (i)

        who is a manager or an employee of the authorised body;

      • (ii)

        who is designated as its COFA;

      • (iii)

        who is of sufficient seniority and in a position of sufficient responsibility to fulfil the role; and

      • (iv)

        whose designation is approved by the SRA.

       
    • (h)

      An authorised body is not required to comply with Rule 8.5(b)(i) where the individual designated as its COLP:

      • (i)

        has been approved by the SRA as a COLP for a related authorised body; and

      • (ii)

        is a manager or employee of that related authorised body.

    • (i)

      An authorised body is not required to comply with Rule 8.5(d)(i) where the individual designated as its COFA:

      • (i)

        has been approved by the SRA as a COLP for a related authorised body; and

      • (ii)

        is a manager or employee of that related authorised body.

Proposed amendments to the SRA Practising Regulations

  • 4.8 Compliance officers
    • (a)

      A recognised sole practitioner must have suitable arrangements in place to ensure that the firm's compliance officers are able to discharge their duties in accordance with these regulations.

    • (b)

      Subject to regulation 4.8(h),Aa recognised sole practitioner’s firm must at all times have an individual:

      • (i)

        who is:

        • (A)

          the sole practitioner; or

        • (B)

          an employee of the firm of sufficient seniority and in a position of sufficient responsibility to fulfil the role;

      • (ii)

        who is designated as its COLP; and

      • (iii)

        whose designation is approved by the SRA.

       
    • (d)

      Subject to regulation 4.8(i),Aa recognised sole practitioner’s firm must at all times have an individual:

      • (i)

        who is:

        • (A)

          the sole practitioner; or

        • (B)

          an employee of the firm of sufficient seniority and in a position of sufficient responsibility to fulfil the role;

      • (ii)

        who is designated as its COFA; and

      • (iii)

        whose designation is approved by the SRA.

       
    • (h)

      A recognised sole practitioner’s firm is not required to comply with regulation 4.8(b)(i) where the individual designated as its COLP :

      • (i)

        has been approved by the SRA as a COLP for a related authorised body; and

      • (ii)

        is a manager or employee of that related authorised body.

    • (i)

      A recognised sole practitioner’s firm is not required to comply with regulation 4.8(d)(i) where the individual designated as its COFA :

      • (i)

        has been approved by the SRA as a COLP for a related authorised body; and

      • (ii)

        is a manager or employee of that related authorised body.

Proposed definition of related authorised body to be added to the SRA Handbook Glossary
"related authorised body
means an authorised body which is:

  • (i)

    a partnership with whom you have one partner in common;

  • (ii)

    an LLP or a company without shares with whom you have one member in common; or

  • (iii)

    a company with shares with whom you have one owner in common."

Proposal 5 - Remove the need for SRA approval for trainee secondments

Regulation 11 of the SRA Training Regulations 2011 Part 2 – Training Provider Regulations

  • 11.1

    You may arrange a secondment in accordance with regulation 11, even where you can provide the range of experience set out in regulation 10.1(a) or (b).

  • 11.2

    If you are a training establishment, and you arrange a secondment for a trainee, you must ensure that the secondment complies with the requirements in regulation 10.

  • If you are a training establishment, and you arrange a secondment for a trainee, you must:

    • (a)

      ensure that the secondment complies with the requirements in regulation 10; and

    • (b)

      include details of the secondment(s) on the certificate of training at the end of the training contract.

  • 11.3

    If you are a training establishment, you may not arrange a secondment:

    • (a)

      for a period of longer than one year; or

    • (b)

      to an organisation that is not authorised to take trainees without approval of that secondment from us.

  • 11.4

    You do not need to seek our approval for a secondment of up to one year if it is to:

    • (a)

      another solicitor's office in England and Wales;

    • (b)

      an overseas branch office; or

    • (c)

      any other organisation that is authorised to take trainees.

  • 11.5

    If you intend to second trainees on a regular basis to an organisation that is not authorised to take trainees, such as a law centre or a client company, you must apply for our approval for that arrangement.

  • 11.6

    If you are a training establishment, and are making an application to us for approval for a secondment, you must provide us with:

    • (a)

      the name of the organisation where the trainee will be seconded;

    • (b)

      details of the type of work the trainee will be doing;

    • (c)

      the name and experience of the person who will supervise the trainee during the secondment;

    • (d)

      the time period of the secondment; and

    • (e)

      confirmation that the requirements of these regulations will be adhered to during the secondment.

Proposal 7 - Remove half-equivalence provisions in training contract reductions

Regulation 7 of the SRA Training Regulations 2011 Part 2 – Training Provider Regulations

  • 7.1

    If you are a training establishment you may grant a reduction in the period of the training contract in recognition of previous experience only if you are satisfied that:

    • (a)

      the trainee's experience on which you base the reduction:

      • (i)

        was equivalent to that gained in a training contract;

      • (ii)

        was in English law, and in one or more areas of law;

      • (iii)

        was gained in the three years immediately preceding the commencement of the training contract;

      • (iv)

        allowed the acquisition of one or more of the Practice Skills Standards; and

    • (b)

      the trainee:

      • (i)

        was adequately supervised;

      • (ii)

        was appraised; and

      • (iii)

        worked either full-time or not less than two and a half days per week (or the equivalent).

  • 7.2

    If you are a training establishment, you may grant a reduction in the period of the training contract in recognition of previous experience:

    • (a)

      of not less than one month (30 days) and no more than six months (183 days);

    • (b)

      the reduction in the period of the training contract is to be calculated as half the period of the previous experience on which the reduction is based.

  • 7.3

    If you are a training establishment you must notify us of any reduction in the period of the training contract you have granted under regulation 7.2.

    • Guidance note:
    • (i)

      You have no obligation to accept previous experience and any reduction in the period of the training contract is entirely at your discretion.

    • (ii)

      In 7.2(b) this half-equivalence means that 12 months’ experience can only result in a six month reduction.

    • (iii)

      If you are calculating a reduction in the period of the training contract on the basis described in regulation 7.2 (b) for part-time workers, experience should be calculated pro rata on a half- equivalence basis. For example, a trainee who had worked two and a half days per week for 12 months could be granted a maximum of three months’ reduction in the period of the training contract.

    • (v) (ii)

      When complying with regulation 7(3), you may notify us either:

    • (a)

      on the online form when you register the training contract or;

    • (b)

      after registration via our website.

Proposal 8 - Remove the time limit of an academic award to remain valid

Regulation 4 and 5 of the SRA Training Regulations 2011 Part 1 – Qualification Regulations

  • 4.1

    If regulation 3.1 applies to you, you must apply to us for a certificate of completion and lodge such evidence as we may require.

  • 4.2

    We will not grant a certificate of completion on an application made later than seven years after 1 October in the year in which you satisfactorily completed a QLD, Diploma in Law or a CPE unless we are satisfied that:

    • (a)

      special reasons exist for granting the certificate; and

    • (b)

      you have complied with such requirements as to courses of study, written tests or otherwise as we may have imposed as a condition of granting the certificate.

  • 4. 32

    Subject to regulation 4.2, iIf we are satisfied that you have satisfactorily completed a QLD, a Diploma in Law or a CPE, we will issue a certificate stating that you have completed the academic stage of training.

  • 4. 43

    If we refuse your application for a certificate in respect of a degree or diploma, we may accept your degree or diploma as entitling you to take a CPE under regulations 6 and 8.

  • 5.1

    A certificate remains in force once granted.for ten years after 1 October in the year in which you satisfactorily completed a QLD, Diploma in Law or a CPE.

  • 5.2

    If you wish to qualify as a solicitor and your certificate of completion of the academic stage has expired, you must satisfactorily complete the full CPE.

    • Guidance note:
    • (i)

      We have the discretion to revalidate expired certificates of completion of the academic stage if we are satisfied that you have undertaken ongoing legal updating. This may include active engagement in legal work or a role as a legal educator throughout the period after completing the QLD, Diploma in Law or CPE.

Proposal 9 - Remove the need for student re-enrolment after 4 years

Regulation 14 of the SRA Training Regulations 2011 Part 1 – Qualification Regulations

  • 14.1

    A first certificate of enrolment, is valid for the remainder of the calendar year in which your application is made plus another four years, as specified in the certificate. once granted, is valid for the lifetime of the applicant subject to the cancellation provisions in regulation 33.

  • 14.2

    Any other certificate of enrolment is valid for four years from the date of issue. A certificate of enrolment will automatically expire upon admission as a solicitor.

  • 14.3

    Notwithstanding regulations 14.1 and 14.2, a certificate of enrolment which is in force when you commence a training contract shall remain valid for the duration of that training contract.

Proposal 10 - Remove the need for QLTS certificates of eligibility in certain, specified circumstances

Regulations 2.5 and 2.6 of the SRA Qualified Lawyers Transfer Scheme Regulations 2011

  • 2.5

    If we are satisfied that you are eligible, we must issue a QLTS certificate of eligibility to that effect. and we have determined that you must pass one or more of the QLTS assessments, we must issue a QLTS certificate of eligibility to that effect.

  • 2.6

    If you do not hold a QLTS certificate of eligibility, you may not register with the assessment organisation to take any of the QLTS assessments. Where Regulation 3.3 applies, if we are satisfied that you are eligible, and we have determined that you do not need to take any of the QLTS assessments, then you may proceed to Admission.

Appendix 2: Glossary

Acronyms used in this paper

  • AUS - Authorised Signatory
  • COLP - Compliance Officer for Legal Practice
  • COFA - Compliance Officer for Finance and Administration
  • LSA 2007 - Legal Services Act 2007
  • LSB - Legal Services Board
  • OFR - Outcomes-Focused Regulation
  • SRA - Solicitors Regulation Authority
  • RFL - Registered Foreign Lawyer
  • REL - Registered European Lawyer
  • QLD - Qualifying Law Degree
  • CPE - Common Professional Examination
  • CRB - Criminal Records Bureau
  • ORC - Organisational Contact
  • QLTSR - Qualified Lawyer Transfer Scheme Regulations
  • QLTS - Qualified Lawyer Transfer Scheme

The Solicitors Regulation Authority (SRA) is the independent regulatory body of the Law Society of England and Wales. We protect the public by regulating law firms and individuals who provide legal services.


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