Philip: We had to prioritise
The Solicitors Regulation Authority (SRA) has put work on any changes to client account – and the interest solicitors earn on it – on hold until the second half of 2026.
Chief executive Paul Philip said “we simply don’t have the bandwidth” to do it at the moment in light of the demands of the work required to comply with the statutory directions issued by the Legal Services Board [1] to address shortcomings in the SRA’s oversight of Axiom Ince.
“They put a very quick turnaround on things that will require a lot of policy work and will probably need rule changes,” he told a media briefing yesterday. “So we had to prioritise.”
Reform of the SRA Compensation Fund will also be held over.
But he and chair Anna Bradley made clear that this was not a case of the SRA kicking client account questions into the long grass.
Mr Philip said the regulator would “come back to it in the second half of next year”. Ms Bradley added: “The board didn’t say it was kicking it into the long grass. The board said we will come back to this once we’ve got through this body of work we need to do.”
However, by then Mr Philip will have retired – he is due to leave the SRA later this year – and Ms Bradley will be coming to the end of her term as chair, so priorities may yet change again.
The controversial idea of removing the need for solicitors to hold client money was always stated to be a long-term one, with credible alternatives needed before it could realistically progress.
Mr Philip still described it yesterday as “the big prize because it removes a huge amount of risk”.
The proposals formed part of last year’s consumer protection review, consultation on which closed this February. The SRA has yet to formally announce what it is taking forward from this.
But Aileen Armstrong, executive director for strategy and innovation, told the briefing that among the detailed proposals it would be consulting on later this year were strengthening the accountant’s report regime, the role of compliance officers, and the SRA’s oversight of mergers and acquisitions.
While the SRA has paused work on client account interest, the Ministry of Justice is separately looking at the possibility of using the interest to fund free legal services, holding a series of roundtables [2] on it last month.
The SRA confirmed it has not been in talks with the government about this.