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A Handbook for Better Outcomes

Solicitors Regulation Authority consults consumer organisations and the profession on Outcomes Focused Regulation

The Solicitors Regulation Authority (SRA) has released a consultation document asking practitioners and the public to comment on a new approach to regulating legal services. A new Handbook, out today, is designed to modernise the relationship between solicitors' firms, their clients, and the SRA. A series of consultation events, Freedom in Practice: better outcomes for consumers, with solicitors and consumer groups are already underway. The programme includes a series of 10 regional road shows, allowing solicitors from across England and Wales to discuss the changes with senior SRA staff. One of the road shows will be available to view online.

October 2011 will see a radical change in legal regulation with the introduction of Outcomes Focused Regulation (OFR) and Alternative Business Structures (ABSs). OFR is a regulatory regime that focuses on the principles and outcomes that should drive the provision of services for clients. It is backed by firm enforcement action where required. ABSs will allow new ways of providing legal services that enable lawyers and non-lawyers to share the management and control of the business providing those services.

OFR will be based around the simplified Handbook, explaining how solicitors and their firms, in serving their clients, must comply with broad principles, rather than detailed rules. This comes as part of moves to ensure that regulation focuses on providing good outcomes for clients. At the same time, the SRA will protect consumers by focusing on the greatest areas of risk. The Handbook will include examples and guidance to show how the outcomes can be achieved.

The proposed Handbook will allow solicitors' firms greater flexibility in the way that they work, letting them do new and better things for their clients. The new system will not reduce standards, and firms which flout the rules will face tough sanctions. Enforcement will be targeted, so that the SRA will spend less time dealing with low-level matters, allowing a focus on the things which matter most to consumers.

It is the SRA's view that most solicitors already follow the spirit of the new principles as part of good business practice.

The principles state that solicitors and their firms must:

  • Uphold the rule of law and proper administration of justice
  • Act with integrity
  • Not allow their independence to be compromised
  • Act in the best interests of each client
  • Provide a proper standard of service to clients
  • Behave in a way that maintains the trust the public places in them and in the provision of legal services
  • Comply with their legal and regulatory obligations and deal with their regulators and ombudsmen in an open, timely and co-operative manner
  • Run their businesses and carry out their role in the business effectively and in accordance with proper governance and sound financial and risk management principles
  • Promote equality and diversity within their businesses and not discriminate unlawfully in connection with the provision of legal services
  • Protect client money and assets

Detailed rules will still apply in areas such as accounts, where the potential risk to the public is greatest. This will ensure that consumers have the highest possible level of protection on the issues which are most important to them.

All those with an interest in the Handbook, including solicitors and clients' representatives, will be able to respond to the consultation. The SRA is keen to get the widest possible range of views.

SRA Chair Charles Plant said:

"We are transforming the way solicitors and their firms are regulated for the benefit of consumers. A simplified rule-book and freedom to practise innovatively will be good for clients and solicitors' firms alike as it will provide the flexibility needed to do new and better things.

"The SRA's enforcement of the new system will be targeted and risk-based. Firms which are willing to work with us to deliver good legal services to clients will benefit from greater flexibility. However, firms who are unwilling or unable to engage with us to deliver good outcomes will face tough sanctions.

"There will be no reduction in standards, as the risk-based approach will focus on the things which really matter to consumers and practitioners."

Notes to editors

1. The timeline towards implementation of OFR and ABSs is set out below.

Date Action
May – June 2010 10 regional road shows take place to allow solicitors across the UK to discuss the changes with senior SRA staff.
May – June 2010 Consultation with consumer groups on the effects of the changes on clients
28 May 2010 Publication of the first consultation paper on the Handbook
27 July 2010 Closing date for written responses to 'Outcomes-focused regulation: Transforming the SRA's Regulation of Legal Services' 
20 August 2010 First Handbook consultation closes
October 2010 Publish second consultation on the Handbook.
October 2010 Policy statement on 'Outcomes-focused regulation: Transforming the SRA's Regulation of Legal Services' with the timetable setting out the transition to OFR, the full cost-benefit analysis and equality impact assessment
January 2011 Second Handbook consultation closes
March/April 2011 Publication of final Handbook
June/July 2011 Expected designation of the SRA as a Licensing Authority for ABSs
6 October 2011 First ABSs licensed and implementation of new Handbook

2. For further information please contact Hannah Marwood on 020 7067 0424

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