Chartered legal executives would have “no role” in running SRA

Rees: Many CILEX lawyers want to stay with a specialist regulator

Chartered legal executives would have “no role” in the governance of the Solicitors Regulation Authority (SRA) and the way regulation is carried out if they were “subsumed” into the regulator, CILEx Regulation Ltd (CRL) has argued.

CRL renewed its warning that it could launch a judicial review if the Chartered Institute of Legal Executives (CILEX) goes ahead with its plans to transfer regulation from CRL to the SRA.

Responding to consultations by CILEX and the SRA on how the move would work, CRL said there remained “significant and considerable gaps in the information put forward by both organisations that we have not been able to fill”.

CRL said it was unclear whether “appropriate governance structures” would be created to avoid chartered legal executives “losing the input into the regulatory framework and decisions that they currently have”.

The response said: “The proposal would see regulation of CILEX’s 7,000 fellows and practitioners subsumed into the SRA, which already regulates 160,000 solicitors and 9,000 firms.

“There are no details in the proposals about how this would be managed. There is no proposal for CILEX fellows and practitioners to have any continuing role in the governance of its regulator and the way its regulatory functions are exercised.”

CRL said that, although the Legal Services Board has previously expressed the view that CILEX has the power, in principle, to “explore and give effect to alternative delegated arrangements” in terms of who it delegates regulation to, it had acknowledged that CRL’s “alternative position” was arguable.

CRL said its position remained that CILEX may not lawfully transfer its regulatory functions to the SRA.

“It is not part of the representative’s body’s residual functions to re-enter the regulatory arena to reshape regulation in accordance with its own preferences unless CRL is failing to meet its obligations (which has not been suggested) or CRL itself agrees in the wider public interest to changes proposed.

“CRL will, if necessary, apply to the court to determine this issue.”

The regulator said no evidence had been provided of “any failure on the part of CRL” to deliver regulatory services.

It was unclear from CILEX and the SRA’s plans whether CILEX’s 9,500 paralegal members would lose access to the “voluntary, independent regulation” currently provided by CRL.

It was also not clear how much the change of regulator would cost and who would pay.

“CILEX, as the instigator of these changes, needs to demonstrate that the substantial cost and disruption are justified.

“This has not been done. The proposals do not set out the financial implications – neither the short-term transition costs, nor the long-term operational costs and future implications for the practising fees payable by CILEX members. No impact assessment nor robust analysis has been published.”

Jonathan Rees, chair of CRL, said the proposals to switch regulator were “hugely significant” for consumers “and indeed the integrity and robustness” of the current system of legal regulation.

“Our consultation before the summer showed that two out of three CILEX professionals wanted to stay regulated by CRL and that CILEX members do not see regulatory change as a priority, and have a strong preference to continue with a focused, specialist regulator, rather than be subsumed into a much larger regulatory body.

“We will continue to meet CILEX and the SRA to try and secure answers to these many questions and encourage CILEX members, including those who are dual qualified, to do the same.”

A CILEX spokeswoman said: “We’re grateful for CILEX Regulation’s response, which will be considered, alongside all other responses.

“We very much want to hear from members, so would encourage them to attend our webinars and roadshows to ask questions of us if they are unclear or to submit a response to give us their views.”

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