The Solicitors Regulation Authority (SRA) has announced the regulatory reforms it intends to roll out on a phased basis starting next year, and The Law Society isn’t too pleased.
The biggest beef relates to the issue of indemnity cover.
“Freeing up solicitors to carry out ‘non-reserved’ legal work working within a business not regulated by a legal services regulator,” said the SRA in its announcement. “Such solicitors would be bound by our Code, as are all solicitors regardless of where they work, would not be able to hold client money, and would not be required to have indemnity insurance.
“They must also make clear to the users of their services exactly what protections are in place, including not providing access to the SRA Compensation Fund.”
In a post published on The Law Society Gazette, the representative body warned against creating what it described as a “complex, multi-tiered system” of regulation. In response to the announced plan, The Law Society also called on the Legal Services Board (LSB) not to grant approval.
“We urge the LSB as the oversight regulator to consider the best interests of the public as well as the globally recognised high standards of the UK legal services and reject the SRA’s damaging proposals to alter the rulebook,” said Law Society president Joe Egan. “The changes proposed would create unnecessary complexity and confusion, making it much more difficult for consumers to reach informed choices about legal services.
“They may also put consumers at risk and ultimately undermine trust in legal services.”
The SRA, however, thinks the reforms it is putting forward will make it easier for firms and solicitors to do business and to meet the needs of those who need their services.
“We believe the potential benefits of increased flexibility for both freelance solicitors and their clients mean we should proceed with the proposal,” The Law Society quoted the regulator as stating. “It is artificial and disproportionate to force those solicitors who are genuinely working on their own into the same regulatory model as a firm that may employ hundreds of people. It increases costs for those individuals and these costs are likely to be passed on to clients.”
