SRA presses ahead with seven-page code of conduct and solicitors practising in unregulated firms


Philip: more trust in professional judgement

The Solicitors Regulation Authority (SRA) is to press ahead with allowing practising solicitors to deliver unreserved services to the public from unregulated organisations, as part of a radical shake-up of the way it oversees the profession.

At the heart of the ‘Looking to the Future’ proposals are a seven-page code of conduct for solicitors and six-page code for firms that describe the standards of professionalism that the regulator and the public expect of those the SRA regulates.

The underlying principle is to put greater trust in professional judgement; the codes strip out the current indicative behaviours.

“Our view is that solicitors and firms do not need pages and pages of detailed, prescriptive rules to do the right thing,” the SRA said today as it announced the results of a 16-week consultation it conducted last year, to which it received 322 responses.

This will go hand in hand with a new enforcement policy that recognises this approach, and will be put out for consultation later in the year.

The hope is that the new codes will come into force by the end of 2018, with supporting material to assist the profession where deemed necessary. The accounts rules will also be revised, as we report separately.

Solicitors can already provide advice on unreserved matters from unregulated businesses, but only if they give up their practising certificates.

There are no restrictions on anyone else offering such advice. The consultation response said: “There is a growing market of [firms not regulated by legal regulators] providing legal services such as will-writing and resolving employment disputes.

“Yet the current rules mean that solicitors are banned from working in these firms. This means at the moment that anyone from a plumber to an accountant can provide legal advice in such firms, but not a solicitor.”

The SRA’s proposal would require such practising solicitors to adhere to the code of conduct, but their clients would not have access to the SRA compensation fund, and indemnity insurance would not be compulsory. They would have to ensure potential clients understood the solicitor’s status and what that meant so they could make an informed choice of whether to instruct them.

The idea attracted support from consumer groups, charities, and the Competition and Markets Authority, but strong opposition from the Law Society and solicitors. The Legal Ombudsman and Legal Services Consumer Panel also registered major concerns.

The society argued that the SRA plan would create a ‘two-tier’ profession where different rules and protections applied to clients depending on whether the solicitor worked in an SRA-regulated firm or not.

Rejecting these arguments, the SRA response said: “We believe there are real benefits for consumers, solicitors and firms in offering this further choice: increased opportunities for innovation, greater competition, a raising of standards and protections in the unregulated sector…

“We do not agree with the view that our proposals will create two tiers of solicitors. All solicitors will be subject to the same education and training requirements and held to the same ethical standards. The standards are set out more robustly and are more clearly articulated than before in the new code of conduct for individuals…

“The wider legal services market already has different tiers, in that non-reserved services are delivered outside [legal] regulation and outside our jurisdiction.”

The SRA also addressed concerns about potential tensions between a solicitor’s professional obligations and the interests of their employer.

“This tension already exists within regulated firms driven for example by the need to make profit or please an important client, as well as when working in house or within a special body… The ability to deal with this tension is essential to being an ethical professional.”

On the question of legal professional privilege (LPP), the SRA said: “We recognise the importance of LPP in many situations, but we do not consider it appropriate for us to place artificial barriers in the market simply to make sure all work done by solicitors falls within the legal boundaries of privilege.

“Further, we consider that the overall advantages of increased access to solicitors outweigh any disadvantages.”

In a briefing yesterday, SRA director of policy Crispin Passmore argued that with clients already able to choose an unregulated adviser, adding a solicitor as an option would mean there was a provider available with “an ethical infrastructure, professional training and a code of conduct”.

He added that it would open up career opportunities for solicitors.

The SRA principles will also be revised and reduced in number from 10 to six that focus on the “universal values” of the profession. Those that currently deal with what is necessary in practice – such as principle 8 on running your business effectively – will be moved into the code, where they have just as much force.

The proposed new principle 4 – “You must act with honesty and with integrity” – is aimed at recent confusion in the courts where some judges have seen the two concepts as synonymous.

SRA chief executive Paul Philip said: “Clear, high professional standards are at the heart of public confidence in solicitors, law firms and a modern legal sector.

“Our consultation confirmed that a shorter, clearer Handbook, with a sharp focus on professional standards, is the way forward.

“Pages and pages of complex rules hinders rather than helps compliance. It drives costs rather than good practice and consumer protection. We want to move away from ticking boxes to putting more trust in professional judgement.”




    Readers Comments

  • Jonathan West says:

    If all that Messrs Passmore and Phillip is true then why have we been labouring for previous generations under increasingly prolix but ‘unnecessary’ prescriptive Rules…?

    So either all the prior regulators were incompetent or these current ones are…?

  • Adrian Samuel says:

    The old ways are gone. Survival depends on redefining what you as solicitors do…not for yourselves but for clients…..what you really do to make change occur.


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