The Legal Services Consumer Panel (LSCP) has warned that the second phase of reforms to the Solicitors Regulation Authority (SRA) Handbook would “compound existing complexities” and could further confuse consumers.
Dr Jane Martin, chair of the LSCP, said the phase 2 reforms were “unlikely to assist consumers, especially vulnerable ones, in choosing services in times of distress”.
Among the proposals were scrapping the current requirement for every firm to have an individual ‘qualified to supervise’, meaning that newly-qualified solicitors could set up their own firms immediately, rather than having to wait three years.
Also, freelance solicitors would be able to offer reserved legal activities as individuals (that is, not though a company or partnership) and would need to be engaged personally by the client.
Responding to the SRA’s consultation, Dr Martin said consumers did not “readily comprehend” the difference between regulated and unregulated law firms.
The most contentious part of the first phase of the handbook reforms, allowing solicitors to practise from unregulated firms, was approved by the SRA board last year.
“If implemented, there will be different levels of regulated solicitors with varying consumer protection liabilities,” Dr Martin said.
“There will also be varying access to the Legal Ombudsman. Additionally, some proposals remove key consumer protection in order to introduce greater flexibility.
“We do not believe that the SRA has struck the right balance between flexibility and the need for consumer protection in a number of these areas.”
Dr Martin strongly attacked a proposal to scrap the current requirement to have in every law firm an individual ‘qualified to supervise’, meaning that newly-qualified solicitors could set up their own firms immediately, rather than having to wait three years.
“There is no evidence to suggest that the mischief which this rule seeks to address no longer exists. Two years’ pre-qualification work experience does not necessarily prepare a person to run a practice.
“We are not persuaded that newly qualified solicitors will always be able to deliver a full service, as sole practitioners, without acquiring technical and consumer-facing skills from experience post qualification.
“We recognise efforts to attract providers into areas that serve vulnerable consumers, especially as these areas have suffered reductions in funding. However, we are not persuaded that removing a qualification condition will achieve this.”
On the proposal to allow freelance solicitors to carry out reserved activities, Dr Martin said it was unclear whether the rule requiring self-employed solicitors to have at least three years’ experience would remain.
The LSCP said it was concerned both about the lack of consumer protection, for example in terms of indemnity insurance, and the “increased consumer confusion” this change could bring.
She called on the SRA to carry out research on consumer understanding of the new types of solicitor to be introduced by the handbook.