Ten of the best as SRA unveils four new core duties for slimmed-down code of conduct


Plant: SRA could step in if it is concerned about firms offering cut-price deals

There are to be four extra core professional duties when the Solicitors Regulation Authority (SRA) unveils a slimmed-down Code of Conduct later this week, it has emerged.

The draft 40-page code – which will form part of an online Solicitors Handbook bringing together all of the SRA’s regulatory regime – is at the heart of next year’s move to outcomes-focused regulation (OFR), which highlights the principles and outcomes that should drive the provision of services to clients, rather than strict adherence to detailed rules. It aims to allow the SRA to focus its regulatory efforts on those firms which pose the greatest risk. The draft code will be published on Friday.

Release of the new core duties came as the SRA held its first OFR roadshow in London, which was attended by nearly 300 solicitors. The core duties will play a central role under OFR, as solicitors’ actions will be judged against them to much more of an extent than they are now.

In addition to the six core duties contained in rule 1 of the current code, solicitors will be required to:

  • Comply with their legal and regulatory obligations, and deal with their regulators and ombudsmen in an open, timely and co-operative manner;
  • Run their businesses and carry out their role in the business effectively and in accordance with proper governance and sound financial and risk management principles;
  • Promote equality and diversity within their businesses and not discriminate unlawfully in connection with the provision of legal services; and
  • Protect client money and assets.

Legal Futures has reported previously on the work to introduce a financial management core duty (see here), which will require firms to report themselves to the SRA if they face financial difficulties. At a press briefing today SRA board chairman Charles Plant said it would allow the SRA to step in and ask questions if, for example, a firm was offering conveyancing at a price it was unlikely to be able to sustain profitably and which was also damaging other practices in the locality.

OFR is due to begin on 6 October 2011, the same day as alternative business structures (ABSs). Asked whether the SRA would also step in at a supermarket-owned ABS offering cut-price conveyancing as a loss-leader, chief executive Antony Townsend said he would expect the same questions to be asked. He added that the SRA could also act “if the case was made out that what was being done could impact access to justice” by forcing other local law firms out of business.

Mr Townsend added that the SRA will have to capture more information from firms to assess their potential risk, which will in future include an annual online financial return. He revealed that the SRA has been working with some City firms to sample what kind of information that can obtain that “will give sensible indicators of risk”, a project now being rolled out to other firms.

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