Response to the SRA proposals for changes to the Handbook

Response to the SRA proposals for changes to the Handbook

Posted on October 20, 2016 at 2:19 pm

The Cheshire and North Wales Law Society prepared a response to the latest Solicitors Regulation Authority proposals. The Chief Executive of the Law Society said “SRA proposals for changes to their Handbook for solicitor and firm regulation and to solicitors’ account rules, if accepted, will leave your clients with less protection and could result in a ‘two-tier’ solicitor profession”.  The response on behalf of our members helped the Law Society to inform a response on behalf of the profession.

Looking to the Future – Flexibility and Public Protection and – SRA Accounts Rules Review

The CNWLS represent Solicitors in the geographical area covering North Wales and Cheshire – from Anglesey to Chester to Northwich.  This papers sets out the thoughts of the Committee of the CNWLS on Flexibility and Public Protection and the SRA Accounts Rules Review.

We are a smaller Law Society and do not have the opportunity or resources to consider such “weighty matters” in the same way as other Law Societies, however as a Committee we felt it was very important to respond.  We have therefore called upon our close relationship with Liverpool Law Society.  Having read their response, we wish to fully endorse its contents and would add the following thoughts.

Flexibility and Public Protection

It is understood that the SRA is aiming to increase the supply and variety of legal services for the benefit of consumers.

However, it is felt that the Rule of Law should be the first and paramount concern.  The protection of consumers can only be fulfilled if the Rule of Law is at the heart of all decisions made in relation to regulation.

The Committee are concerned that the SRA’s proposals for solicitor and firm regulation, if accepted, will leave clients and consumers with less protection and could result in a ‘two-tier’ solicitor profession.

The SRA proposals will enable solicitors to work for unregulated entities providing unreserved legal activities to the public. Such solicitors will be subject to a new Code of Conduct for Solicitors but the organisations they work for will not be subject to the SRA’s proposed new Code of Conduct for Firms.

This has potentially serious implications in a number of areas including: client protection, legal professional privilege, professional supervision, competition and the standing of the solicitor profession. There are also a number of areas of ambiguity in the proposals which MUST be clarified by the SRA.

The proposed changes will place individual solicitors working in unregulated organisations in a difficult and uncertain position.

The Committee has noted – particularly through the involvement with the Law Society’s National Conference for Local Law Societies, that preserving the solicitor brand and encouraging the profession to “stand up and take responsibility for itself” is at the heart of what the SRA seeks to do – this is reflected in the requirements for CPD.

It is also at the heart of what the Law Society is seeking to do.  In recent years, it seems that the SRA has fundamentally shifted in its approach to the Law Society, its Members and regulation – which from the practitioners’ viewpoint is a huge breath of fresh air.  It would seem a great pity were the SRA to “overstep the mark” by damaging the perceived integrity and standing of Solicitors.  Solicitors must be allowed to practice with certainty within one single regulatory regime.  This will retain the authenticity of the Solicitor brand and maintain the Rule of Law.

SRA Accounts Rules Review

It is understood that the SRA is aiming to allow firms greater flexibility in management of their businesses by making the rules simpler.  This is also to reduce “red tape” and compliance costs. Both of these aims are considered to be praiseworthy.

Whilst the proposed changes appear to simplify the Solicitor Accounts Rules, the CNWLS is concerned that less detailed and prescriptive rules will prove difficult to administer for both firms and accountants.  There is already a great deal of uncertainty about whether firms are compliant.  CNWLS do not believe that their clients are concerned with the Solicitor Accounts Rules.  Using this to change the Rules is not considered good reason.

The integrity of Solicitors and their Firms or organisations is at the heart of the Profession.  Removing the need for some Firms to have a client account and reducing the number of Firms requiring an accountant’s report will be seen to remove transparency and accountability and therefore strikes at the heart of the Solicitors’ integrity and ability to uphold the Rule of Law.  This will make it harder to detect any genuine wrongdoing.

We note that LLS have Reference is made in the consultation to the fact that over 50% of firms that hold client money received a qualified accountant’s report in the period June 2012 to December 2013 but only 179 of those were referred for consideration for further regulatory action. The Committee agree that this does not justify the changes proposed.

Diana Williams President

Cheshire and North Wales Law Society

20th September 2016


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