The Solicitors Regulation Authority (SRA) has hit back over a report questioning why it introduced both entity and outcomes-focused regulation, saying it was acting in the interests of both consumers and lawyers.
Researchers commissioned by the Legal Services Board and Law Society said it had been a voluntary choice that had led to the creation of “a heavy-handed regulatory structure”.
They also said that the level of checks imposed by the SRA on new entrants to the profession could be stifling innovation for no benefit.
An SRA spokeswoman responded that the research – which was primarily on economic barriers to entry, exit and merger in the solicitors’ market – was “a missed opportunity”.
The regulator said its value was “significantly lessened by some factual inaccuracies and omissions” which could have been avoided if the researchers had “engaged properly” with the SRA during their work.
“For example, it confuses the statutory time limits for ABS applications with the time actually taken by the SRA to authorise new solicitor bodies. It also omits any reference to the LSB’s requirements on all approved regulators to adopt risk-based and outcomes-focused approaches to regulation. This is particularly surprising in a report which was commissioned by the LSB.
“In fact, the decision by the SRA to introduce risk-based outcomes-focused regulation was consistent both with regulatory best practice and the LSB’s requirements. Far more importantly it was in the interests of consumers and the diverse range of excellent firms operating in this market.”
By contrast, the spokeswoman argued, a rules-based, ‘one size fits all’ approach, is not in the interests of firms or consumers and is simply unsustainable.
“There is more for the SRA to do to unpick the highly prescriptive and costly rules-based systems it inherited from the Law Society, and the SRA will continue to complete that work. Unfortunately this research is of limited value to that important work.”