The Legal Services Board (LSB) has finally taken the Solicitors Regulation Authority (SRA) off ‘report’ over how it is handling the approval of alternative business structures (ABSs), with the number of licenses it has issued now topping 400.
In January 2013 the LSB issued a notice under section 55 of the Legal Services Act 2007 requiring the SRA to provide information about the backlog in ABS applications and its plan to address the problem, and it has been maintained since then due to continuing concerns.
LSB chief executive Richard Moriarty reported to last month’s meeting of the LSB’s board that as at 15 April, the SRA had granted 402 licences, while there 37 applications in the system.
The average age of a work-in-progress application was around two and a half months, with one over six months’ old.
He wrote: “We consider that the data the SRA has been providing over the last few months demonstrates substantial improvement in the speed with which the SRA is dealing with ABS authorisation requests.”
He continued that for some time the LSB has been concerned about the “disproportionality” of the SRA’s authorisation processes and its plans to improve them were unclear.
But recent meetings and discussions with the SRA have “provided greater clarity about its proposals”, as demonstrated by the consultation issued last month which recommends scrapping the rule that requires it to approve the individuals who own companies that in turn own ABSs.
Mr Moriarty said: “These developments have given us greater confidence about the scope and impact of the proposed process and policy reforms. For these reasons, and in light of the data showing substantial improvements in the speed of the process, we have concluded that it is appropriate to end the section 55 monthly data reporting obligation on the SRA, and we have consequently revoked the section 55 notice with immediate effect.”
In future LSB oversight of the SRA’s plans to improve ABS authorisation would continue through its ‘business as usual’ activities, he added.