News releases

Risk Outlook maps out key risks

A key foundation of the Solicitors Regulation Authority's (SRA) communication about its view of key risks and the approach it takes to managing risk has been launched today, 2 July 2013.

The Risk Outlook, which outlines how the Authority views the key risks to its regulatory objectives, was officially launched today at a special event in Birmingham. The purpose of publishing the Outlook is to provide firms and consumers with a clear view of the SRA's assessment of the drivers in the legal services market and the key risks, current and emerging, to the provision of competent ethical legal services.

It profiles key risks and explains what is meant by each of them, why they are significant and the regulatory approaches to managing them. The Outlook was produced following a review of the current legal services market to understand better the drivers of risk to the regulatory objectives.

Samantha Barrass, SRA Executive Director, said: "Risk is central to everything we do at the SRA and our day-to-day regulatory activities are guided by risk, focusing our attention and activities on issues, firms and risks that pose the greatest threat to protecting the public. Neither we nor the firms we regulate can eliminate risk altogether, and indeed we should not, because well controlled risks are a feature of a healthy market.

"Instead, our objective is to make the best use of our limited resources to support the reduction of harmful risks to an acceptable level. The Risk Outlook is a key part of this process, exposing the risks and articulating the controls in place to ensure that those likely to cause the most harm, are managed down to an acceptable level or out as early as possible."

Risks have been prioritised and placed into three categories – current risks, emerging risks and potential risks. An important example of a current risk is financial instability, where the SRA is putting much effort into identifying firms at risk and working with them to support the proper management of their circumstances.

The quality of services provided to vulnerable clients is an example of an emerging risk and improper or abusive litigation, lack of due diligence over outsourcing arrangements and lack of transparency in complex business structures have all been identified as potential risks. The Outlook will be published annually and the SRA will be keeping the risks under constant review.

The Risk Outlook forms part of the overall approach to risk management. In December 2012, the SRA published the Regulatory Risk Framework to explain how it identifies, assess and control risks to the delivery of the right regulatory outcomes for consumers of legal services. The SRA has also published the Regulatory Risk Index within the Framework, which provides an overview of all the regulatory risks it manages.

 
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