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SRA: The path to outcomes-focused regulation

The Solicitors Regulation Authority and legal services enter a new era today (Thursday, 6 October) with the move to outcomes-focused regulation (OFR).

OFR, which is based on a risk-based approach to regulation, rather than the traditional prescriptive regime, represents a major change in the way in which the SRA engages with solicitors and practices across England and Wales. It is designed to result in better outcomes for consumers of legal services.

Antony Townsend, chief executive of the SRA, said: "We have worked to a punishing schedule, and we are a more effective organisation as a result. I should like to pay tribute to the legal community, the Law Society and the Legal Services Board (LSB), consumer representatives, and others for working with us to reach the milestone that OFR represents.

"I am proud of what we have achieved over the past two years. Staff have demonstrated outstanding levels of commitment and resourcefulness in delivering significant changes to such tight timescales. But we are not complacent, while we have laid the OFR foundations, our real work now begins."

Chris Kenny, chief executive of the LSB, welcomed the launch today of the SRA's revised approach to regulation and added: "Moving to outcomes-focused regulation represents an important shift in focus for the SRA, for solicitors and those they serve. It promotes ethical behaviour and innovation by placing responsibility for achieving regulatory outcomes squarely on the shoulders on legal services providers and giving them the freedom to achieve them in different ways."

Some of the milestones and achievements include:

  • The context of OFR and its implications were set out in the 'Freedom in Practice: Better Outcomes for Consumers campaign' in early 2010. There followed an intensive consultation period between December 2009 and June 2011. Consultation also included staging roadshows throughout England and Wales, while reference groups were established and sector-specific meetings held to raise awareness and collect feedback.
  • The on-line Handbook, including the revised Code of Conduct , was launched in draft form on 6 April, allowing users six months to familiarise themselves with its contents. The Handbook comes into effect today (6 October).
  • In 2010 the SRA launched a Transformation Programme to deliver both the organisational structure and IT infrastructure required to support the new regulatory regime. The organisation has been restructured three main functions: Authorisation, Supervision and Enforcement and significant recruitment and re-training has taken place
  • In June 2011 the SRA received LSB approval to become a licensed regulator for Alternative Business Structures (ABS). The SRA is likely to license its first ABS in early 2012 following designation as a licensing authority by Parliament in December 2011.
  • In autumn 2010, the SRA's Relationship Management pilot was launched, trialling new ways of working with the profession, to see how these would complement other approaches. The pilot, which ended in August 2011, has given the SRA confidence that the new risk-based authorisation and supervisory arrangements for all firms were robust and outcomes-focused.
  • In July 2010, the Risk Centre was established to underpin OFR, and ensure monitoring and investigative activity was better targeted through more effective use of intelligence and assessed against robust risk criteria.
  • In order to understand better the relationship between law firms and consumers, a consumer affairs function was established, and steps taken to establish a stronger relationship with consumer advice bodies.
  • The SRA's regulatory regime was overhauled- interventions into firms were conducted in a more timely manner, compensation arrangements were reviewed; new powers to impose fines, issue rebukes and publish decisions were employed, demonstrating openness and accountability.
  • In July 2011, a new Equality Framework and action plan was published, outlining the SRA's equality objectives, with a focus on encouraging equality of opportunity and respect for diversity in the profession.
  • A major overhaul in the way practising fees were calculated and collected was undertaken to make fees more proportionate to regulatory risk in 2010.
  • The Board approved improvements to arrangements for client financial protection in April 2011.An Assigned Risk Pool (ARP) enforcement strategy, approved in July 2010, has reduced the number of firms unable to obtain insurance on the open market. Plans are in place to phase out the ARP by October 2013.
 

Note to editors

  1. Read full report: The path to outcomes-focused regulation
  2. Further information on the SRA's work on OFR is available.
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