The Solicitors Regulation Authority (SRA) has had the tables turned after receiving a monitoring visit of its own from the Insolvency Service (IS) which then criticised the way it regulates solicitor insolvency practitioners.
The IS oversees seven professional bodies who can authorise their members to act as insolvency practitioners. In its annual review of regulation, the IS said the visit to the SRA’s offices in Redditch found that the SRA was not handling complaints in accordance with the principles underpinning regulation that had been agreed with the government.
Further, the SRA’s move to outcomes-focused regulation “is not compatible” with the IS’s drive for greater consistency in complaint-handling and sanctions across all of the seven professional bodies able to authorise their members to act as insolvency practitioners. This is because the SRA will not investigate all complaints received, but will use the information received to form a risk profile for firms, it said.
“Other areas of concern noted during the visit were that the new principles-based handbook (which replaced the Solicitors Code of Conduct) no longer required solicitor insolvency practitioners to comply with the Insolvency Code of Ethics; that the SRA website failed to inform members of the public on how to complain about a solicitor insolvency practitioner; that potential new applicants for authorisation as an insolvency practitioner could not apply online and that there remained an issue with enabling bonds [security for the proper performance of an insolvency practitioner’s functions] being received late.”
As a result of the visit, talks with the SRA and the Law Society have led to a recent amendment to the SRA Handbook that includes reference to the Insolvency Code of Ethics and the SRA has given an assurance that online applications will be possible in the summer. The IS said: “The important matter of complaint handling has not yet been fully resolved although an acceptable solution has been identified.”
Monitoring visits of insolvency practitioners authorised by the SRA are carried out under contract by the Insolvency Practitioners Association, and the IS said it intends to observe a monitoring visit to an SRA insolvency practitioner this year.