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SRA promises "fundamental" overhaul of solicitor regulation

The Solicitors Regulation Authority has published a strategy paper setting out its plans to radically transform the regulation of solicitors and firms over the next two years.

The new approach – contained in Achieving the right ­outcomes – will “fundamentally” change both the Solicitors’ Code of Conduct 2007 and the SRA’s approach to supervising and enforcing the Code and other regulations, the authority said.

The SRA said its strategy “would:

  • Give more flexibility and responsibility to firms by setting out clear outcomes, with firms deciding the best way to deliver these for their type of business
  • Focus on those requirements which are genuinely needed to protect consumers and deliver high standards of service
  • Concentrate SRA resources on the issues and activities that pose the greatest risks to consumers and the public interest
  • Ensure there is a level playing field for all legal services providers regulated by the SRA, with no unnecessary barriers to entering the market, by applying the new approach to both traditional legal firms and Alternative Business Structures (from 2011).”

The regulator insisted its approach would not mean the abolition of all detailed rules, “nor will it mean a lack of clarity about the circumstances in which firms will be subject to enforcement”.

It will, however, see a greater focus within firms and the SRA on quality assurance and professional principles.

The SRA acknowledged that the new regime would create a number of challenges, including: the need for senior managers to take greater responsibility for creating the right culture; firms having to determine for themselves the approach to delivering the right outcomes for clients; and new market entrants wanting a balance to be struck between an overly detailed Code and a principles-based approach that risks having a lack of clarity over the regulator’s expectations.

The authority also made it clear that it was “not in any sense lowering the standard required from firms, and, therefore, the level of consumer protection”.

SRA chief executive Antony Townsend said: “This paper sets out how we plan to transform regulation to bring benefits for both consumers and firms. Firms will need to focus on the outcomes and how best to meet them, given the way they manage their business. This will be a big culture change for many firms, and for the SRA.”

The consultation period for the strategy paper lasts until 6 March 2010. The new Code of Conduct is likely to come into force from the date Alternative Business structures are permitted to obtain licences, which is expected to be in the second half of 2011.