SRA to help solicitors practising from unregulated firms – and their employers – after rules rewrite

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25 October 2016


Philip: scale of unmet need is huge

Philip: scale of unmet need is huge

The new codes of conduct being drafted by the Solicitors Regulation Authority (SRA) will include guidance to protect solicitors practising in unregulated businesses, as well as law firm whistleblowers, it has emerged.

The rulebook rewrite has caused particular controversy around the proposal that solicitors could deliver unreserved services to the public from organisations that were not regulated by the SRA.

The Law Society, Legal Services Consumer Panel and Legal Ombudsman are among those to have attacked the plans.

Speaking at the SRA Compliance Officers Conference in Solihull last week, Juliet Oliver, the regulator’s general counsel, said it was particularly concerned to protect young lawyers working for unregulated firms.

She said the SRA wanted to encourage employers at unregulated firms to hold discussions with staff by providing training and guidance.

The SRA would also help employers understand that “there might be a point where their lawyers have to turn round and say: ‘I can’t do what you’re asking me to do because of my professional obligations and I need to use my independent judgment.’”

She went on: “It’s worth pointing out that we’re not aiming to hold individual solicitors to account for the behaviour of unregulated businesses. We don’t have jurisdiction over these businesses – that’s a feature of the Legal Services Act.”

Ms Oliver said that the draft codes – one for solicitors and one for firms – required all solicitors to help inform consumers as to the level of protection available to them, and could include in the future include making “positive references” to the Compensation Fund in their marketing material.

She explained how consumers had told the SRA that they “really liked logos”, even though they did not understand all of them.

Earlier in the day, Paul Philip, chief executive of the SRA, strongly defended the principle of allowing solicitors to practise from unregulated firms.

He said that nine out of ten members of the public did not go to a regulated lawyers when they had a legal problem and the same proportion of small businesses said the services of solicitors were not value for money.

“The scale of unmet need is huge, and so is the market. It must be right that when individuals and small businesses have a need for legal advice their first port of call is a trained solicitor.

“It can’t be right that properly trained and regulated solicitors are the only ones who can’t provide advice outside of an authorised firm. It must be right to allow many, many more opportunities for solicitors, particularly young solicitors, to practise in new and innovative ways – outside authorised firms if necessary.”

Mr Philip added that solicitors would need to be clear about the protections for consumers, but there was “absolutely no evidence” that people went to law firms because of the redress that was available.

Ms Oliver also said she had been talking to whistleblowing charity Public Concern at Work to see what could be done through case studies to support whistleblowers at law firms, and “explain how they can navigate the ethical difficulties they find themselves in” when facing allegations involving breach of confidentiality or privilege.

Ms Oliver said it was clear looking at the feedback from the consultation on the rules rewrite that some solicitors wanted the SRA to tell them what they could do and how they should go about running their businesses in “really prescriptive detail”.

Instead she said the regulator would “provide a framework for ethical practice at quite a high level”, but otherwise leave things to solicitors’ professional judgment.

“The plan in having a more high-level code is not to leave more room for us to catch you out. I know that this is a concern. The burden of proof is for us to discharge.”

Ms Oliver said quite a lot of the issues raised in the consultation already existed and involved balancing principles or standards which came into conflict with each other.

“For example, how do you pursue your clients’ interests fearlessly and not take advantage of a litigant-in-person on the other side?”



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