18 April 2013Print This Post

Legal Services Board to keep up pressure on SRA over ABS licences

Barrass: new approach has had a big impact on licence numbers

The Legal Services Board (LSB) is to keep the performance of the Solicitors Regulation Authority in issuing alternative business structure (ABS) licences under scrutiny, it has emerged.

Papers just released by the LSB show that in January it issued a notice under section 55 of the Legal Services Act 2007 requiring the SRA to provide information about the backlog in applications and its plan to address the problem.

According to the minutes of January’s LSB board meeting, the SRA responded by submitting a “very high-level spreadsheet” setting out details of the backlog. “It appeared that there was limited reliable management information about either the current status of the programme as a whole or overall trends over time.

“The SRA had provided assurances that immediate investment was being made to reduce backlogs and an action plan to address systemic issues was being developed, with the target date for clearing the backlog and actioning longer-term improvements being 31 March 2013.

“It was understood that there had been issues with IT and that approvals had been slower than anticipated in the first six month, contributing to the backlog. There were also issues with the process, and the point at which certain decisions and judgements were being made.”

The LSB also noted that it had formal powers to issue directions and/or key performance indicators if the SRA “did not clear the backlog by the end of March and/or put in place its own, sufficiently rigorous, performance indicators”.

The SRA did indeed review the process, as we revealed in February, and also published revised guidance to applicants. There has been a spurt in approvals in recent weeks, and the SRA has now issued 135 licences.

Executive director Samantha Barrass told Legal Futures that the SRA has met its target of determining that “those applications now deemed ‘work in progress’ are ‘work in progress’ for good, non-bureaucratic, risk-based reasons. We reached this point before the 31 March deadline.

“Also, it is evident from the numbers of ABSs now licensed, that this approach has had a big impact on numbers.”

In a statement to this website, an LSB spokesman would only say: “We continue to track the SRA’s current progress and future plans closely and raise issues with them both formally and informally when necessary.”

However, it is understood that the ABS position is to become a standing item on the LSB’s agenda.

The LSB also issued a section 55 notice in January seeking information on why the SRA had such a large number of enforcement cases and what action was being taking to reduce them. This followed the SRA’s admission that it had 500 matters under investigation for potential referral to the Solicitors Disciplinary Tribunal.

It appears that progress has been made on this, with the latest figures showing 282 open cases at the end of March.


By Neil Rose

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