Maritime insurance: Business adds legal capacity
Consumer group Which? and a company that helps parents find childcare solutions are among the eight unregulated businesses that have been granted waivers that allow their employed solicitors to provide legal services to third parties in the Solicitors Regulation Authority’s (SRA) innovation space, it has emerged.
The news came in a report that for the first time revealed the extent of the SRA’s use of waivers, which in the main relate to the requirement on firms to submit accountants’ reports.
The report on how waivers have been used to date is part of the regulator’s new waiver policy [1], which has been streamlined and will in future see details of waivers published on its website.
The new SRA Handbook, when it comes into force in April 2019 [2], will allow solicitors to practise from unregulated businesses without needing a waiver.
Legal Futures has already revealed three businesses that have received waivers – employment law businesses Peninsula [3] and Croner [4], as well as Rocket Lawyer [3] – and the report details the other five:
- DMC Legal Consultancy – set up by barrister-turned-solicitor Simoine Morgan-Barnes, the waiver allows the company, which also offers consultancy and training services, to offer legal advice to SMEs on a range of areas, including landlord and tenant, contracts and employment law;
- Parental Choice – set up by one-time City solicitor Sarah-Jane Butler, the waiver allows it to offer legal advice on employment law to families who employ staff to work in their homes on non-contentious employment law and commercial matters;
- Which? Legal – the waiver helps the advice service provide its 70,000 members with more information and have more direct access to solicitors on a range of legal issues;
- Michael Else & Company – the waiver allows the company to provide legal advice as part of it work in maritime insurance, legal and maritime consultancy; and
- Hybrid Legal – the waiver enables the firm, which promises “the high-quality advice of a premium law firm combined with the benefit of a fixed-fee service”, to deliver legal advice to SMEs.
Firms operating in the innovation space cannot deliver reserved legal activities, must have professional indemnity insurance “reasonable equivalent” to that of a regulated practice, and must tell clients how the services provided by their solicitors are regulated and the protections available to them.
The SRA said: “We only granted a waiver if it is in the public interest to do so, increasing the accessibility and availability of ethical and well-regulated solicitors to the public. These waivers extend the regulatory obligations that arise for any solicitor with a practising certificate.”
The report used Parent Choice as a case study. Its services include guidance on looking for a nanny or au pair, helping families to relocate and managing the administration involved in employing domestic help.
The SRA explained that, without the waiver, it would have had to outsource legal services, “resulting in a fragmented customer experience”.
Legal services are initially being offered to existing clients and represent around 15% of Parental Choice’s overall business.
“The legal services the business now offers are becoming more established, with initial feedback suggesting the clients are valuing the flexibility and diversity of the service.”
The report showed that the SRA granted 537 waivers in 2015/16, 585 in 2016/17 and 232 in the first six months of 2017/18.
Around 80% related to accountants’ reports. The SRA explained: “We may consider that the cost of obtaining the report is disproportionate. This is when considering the number of client account transactions that have taken place, or where only a very small volume of client money has been handled in the accounting period.
“In deciding whether to grant the waiver, we assess the risk to the public, including any disciplinary and complaints record of the firm.”