SRA’s red tape bonfire to move onto vexed question of non-material breaches


Collins: general support for changes

The Solicitors Regulation Authority (SRA) is to revisit its policy on requiring firms to report non-material breaches to examine whether it amounts to an “unnecessary burden” on the profession.

At a specially convened meeting yesterday, the authority’s board approved the first 10 proposals in its red tape initiative. At the same time, it announced some of the next areas to be investigated.

They include improving online practising certificate renewal, education and training regulations (such as simplifying training contract registration), simplifying the regulatory maze, and addressing operational administration, such as handling the notification of new managers electronically.

Reporting requirements to the SRA by law firms, a grey area of regulatory compliance that has caused disquiet among solicitors, will also be scrutinised. Some respondents to the consultation commented that the new reporting requirements – particularly in relation to non-material breaches – “place an unnecessary burden on the profession”, the SRA said.

Approval of the 10 reforms in the SRA’s initial list means the lifting of restrictions on charging by in-house lawyers employed by not-for-profit organisations and allows solicitors working in-house for local authorities to charge charities for legal services.

The latter issue was the subject of 56 of a total 93 consultation responses, all from individual employees at Kent County Council. They, along with colleagues at other authorities, suggested extending permission to charge to areas beyond their particular local authority. The SRA said it would consider an extension at a later date, because providing services ‘out of area’ would in effect put them on a par with commercial entities.

A red tape initiative plan to passport foreign lawyers into partnerships, which last week came under fire from the Law Society, was approved in spite of the society’s objections. The SRA pledged only to review the approval process for foreign lawyers, including their knowledge of regulatory obligations.

Another proposal to which the society also objected strongly – to scrap a requirement that authorised training providers have to seek reauthorisation every three years – was given the green light nevertheless. The SRA responded that providers were required to notify of any material changes that might affect their ability to train effectively, so reauthorisation was unnecessary.

Other proposals waved through by the SRA board included allowing compliance officers to operate in related entities, abolishing the need for SRA approval of trainee secondments, and removing the need for student re-enrolment after four years.

Richard Collins, SRA executive director for policy, said: “The response to the consultation exercise was positive… Not everyone who responded was in favour of the removals we had suggested – and some wished us to go further than proposed – but there was general support.”

 

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