SRA sets out plans for reforming regulation
1 June 2009
Two key papers proposing reforms to the regulation of legal services under the Legal Services Act are published by the Solicitors Regulation Authority (SRA) today, representing the next stage in the SRA's delivery of its strategic plan. The proposals support the Act's objectives of protecting and promoting the public interest and ensuring that the work of the regulator is seen to be independent of the activities of the representative body.
Delivering alternative business structures and firm-based regulation
The SRA today publishes its views on how alternative business structures, the radically new type of law firm enabled by the Legal Services Act, should be regulated.
In a discussion paper, the SRA asserts that ABSs should be subject to the same ethical standards, standards of service and consumer protections as any other kind of law firm. Risk should be mitigated by having appropriate risk-based entry requirements and more developed supervisory arrangements within firms. There should be as few restrictions on types of business model as is consistent with avoiding conflicts of interest which would harm consumers.
The paper also indicates a broader shift in the style of the SRA's regulation, towards a focus upon the organisations delivering legal services and the outcomes for consumers.
Firms able to demonstrate that they had strong consumer safeguards in place might be given greater freedom in the way they meet regulatory requirements. It is proposed that there should be pilot schemes in the coming months.
SRA Chief Executive Antony Townsend said: "We look forward to working closely with firms of all sizes, from the City to the High Street, to establish this new regulatory approach, which will allow greater flexibility in how firms meet their obligations, without compromising consumer protection. We shall be looking for new skills to deliver this shift in regulatory approach, which represents a radical shift from the traditional approach to the regulation of solicitors."
MoreConsultation: Regulating alternative business structures
Regulatory independence
The SRA is also responding today to the consultation being held by the Legal Services Board (LSB) on the rules necessary to ensure regulatory independence, as required by the Legal Services Act.
In the foreword to its consultation, LSB Chairman David Edmonds says: "Our work now is about ending, once and for all, any perception that lawyers run the regulatory system for themselves. It is about entrenching a regulatory agenda that is in the public and consumer interest."
The SRA strongly supports the LSB's proposals. SRA Chair Peter Williamson says: "Rules of the kind proposed by the LSB are essential to maintain public confidence in the legal sector, and to ensure that the regulatory organisations can discharge their duties in the public interest.
"The current constitutional arrangements of the Law Society, in particular those relating to governance, control of resources, and the appointment of the regulatory board, are no longer sufficient to ensure that confidence. Our proposals are designed to achieve the proper separation of regulatory and representative functions, in accordance with the Legal Services Act and the LSB's proposals. This will enable regulators to work explicitly in the public interest, while allowing representative bodies to pursue their proper functions, and to engage in constructive dialogue with the regulators."
"Without independence, Parliament's intentions when it passed the Legal Services Act cannot be achieved and consumers of legal services will remain the poorer."
MoreSRA response to the LSB consultation
Editor's notes