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SRA sets out how it will deliver outcomes-focused regulation

The SRA has today set out how in further detail how it intends to deliver outcomes-focused regulation (OFR) in October 2011, including how risk-based regulation will work in practice.

Delivering outcomes-focused regulation also sets out what consumers, firms and regulated individuals can expect from the SRA under the new regulatory approach. It includes case studies illustrating different situations.

Updated guidance is provided to help those who are looking to launch Alternative Business Structures.

SRA Chief Executive Antony Townsend said: "We remain firmly on target to become an outcomes-focused regulator by October next year. This paper sets out clearly how the SRA is approaching the task, and what this will mean for consumers and law firms.

"Consumers can expect us to uphold the standards of the profession and to provide more information to help them access and use legal services. Firms will benefit from greater flexibility, but will need to show they are delivering the required outcomes.

A key part of the new approach is about facing forwards, identifying risks before they happen, rather than looking backwards, finding and penalising firms who have breached prescriptive rules. The statement explains how we will assess and manage risk, so that we can target our resource at the areas of greatest need.

"I also encourage potential ABSs to contact our new, dedicated ABS team, which is developing the processes by which we will enable new kinds of law firms to obtain a licence from October 2011."

Covered in the paper are:

  • Detail about risk-based regulation – focusing on risks arising from regulated individuals, from individual firms, from the activities of a number of firms together, and from the SRA’s own operational risks. This includes how we will risk assess firms and use that information to tailor our supervision.
  • What the SRA is doing to ensure it is ready to be a successful outcomes-focused regulator.
  • Our future approach to consumer education and support, as we look to provide more information to consumers to help them understand what they can expect from those we regulate.
  • Information about each of the three key regulatory functions going forward, and how these will work together:
    • authorisation – the ways in which we permit individuals and organisations to provide legal services
    • – the ways in which we permit individuals and organisations to provide legal services
    • supervision – how the SRA will oversee those we regulate
    • – how the SRA will oversee those we regulate
    • legal and enforcement – our approach towards enforcement activity taken in the public interest where our regulatory requirements have not been met.
    • – our approach towards enforcement activity taken in the public interest where our regulatory requirements have not been met.
  • Case studies of firms to illustrate how the SRA’s new approach might work in different situations.
  • Analysis of feedback to our April consultation, which prompted 62 written responses.
  • An indicative framework for cost-benefit analysis.
 
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