Government rejects profession’s call for convictions check on all ABS partners

Print This Post

By Legal Futures

20 October 2011


Parliament: last two statutory instruments for ABSs now laid

The government has rejected a call from the legal profession that partners in alternative business structures (ABSs) should have to disclose all convictions and cautions, even if spent.

However, the statutory instrument that will require prospective non-lawyer investors and owners in ABSs to disclose all of their convictions and cautions – without which the Solicitors Regulation Authority (SRA) indicated it would not allow external investors – has this week been laid before Parliament.

It is the second of two key pieces of secondary legislation that need to come into force to allow the SRA to license ABSs. The news keeps the SRA on track to start doing so early in 2012.

The exception to the Rehabilitation of Offenders Act 1974 – which otherwise designates convictions of 30 months’ imprisonment or less as spent after a certain period of time has elapsed – will include the Council for Licensed Conveyancers (CLC), even though it did not request such an exception for itself when its ABS licensing rules were approved. Earlier in the year the government introduced an exception to encompass the heads of legal practice and of finance and administration at ABSs.

A Ministry of Justice spokeswoman said: “This amendment to the Rehabilitation of Offenders Act allows licensing authorities for ABSs to request checks on spent convictions on people who want to become owners or part-owners of these businesses. This will ensure that similar safeguards are in place for users of traditional and non-traditional structures.

“All potential licensing authorities will be required to demonstrate that they have adequate procedures in place to protect consumers before they will be designated as licensing authorities.”

However, the instrument’s explanatory notes reveal that the government rejected the view expressed by the Legal Services Board, SRA, Law Society, CLC and Bar Standards Board that the exception should be extended to all partners in an ABS, saying it “does not presently consider that there is evidence to support that approach”.

As previously reported, the other statutory instrument puts in place an independent appeal mechanism against a range of ABS decisions the SRA may make, such as refusing an application for a licence, imposing conditions on a licence, disqualifying a person from working in an ABS, or imposing a financial penalty.

Appeals will go to the Solicitors Disciplinary Tribunal, rather than the general regulatory chamber of the First-tier Tribunal, as the Legal Services Board wanted and the CLC has adopted.

Tags: , , , , , , ,



Leave a comment

* Denotes required field

All comments will be moderated before posting. Please see our Terms and Conditions

Legal Futures Blog

The skills shortage in law firms is the biggest threat to handling cybercrime

CLC Roundtable discussion at Malmaison Hotel, Charterhouse Square

The skills shortage in our businesses is the biggest threat to our industry when looking at cybercrime. Cybercriminals are not just after money but are looking for sensitive information too, so the legal services sector is an obvious target. In the last year we have had reports of around £7m of client money being lost to such crime. This is not an IT issue and it should not be left to the IT teams to sort out. It is a high-level responsibility and a board-level issue that must be taken seriously. We suspect that we will look back on 2016 and ask why we didn’t respond quicker.

March 21st, 2017