Law Society and SRA unveil deal to resolve longstanding governance wrangling

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By Legal Futures

11 November 2011

Wotton: sound basis for future working relationship

The Law Society and Solicitors Regulation Authority (SRA) have hammered out “a permanent resolution” of their long-running internal governance issues, the pair announced yesterday.

The aim is for the society to exercise oversight of the SRA without transgressing the Legal Services Board’s (LSB) internal governance rules that are designed to ensure regulation is independent of representation in split bodies such as the Law Society, Bar Council and Institute of Legal Executives. The deal has still to be approved by the LSB.

The society is named in the Legal Services Act 2007 as the approved regulator and so, although it has delegated to the SRA board responsibility for carrying out its regulatory functions, the society remains legally responsible. The powers of the LSB – including directions and financial penalties – are exercisable against the society, rather than the SRA.

The newly agreed oversight protocol says: “Accordingly the council [of the Law Society] needs to satisfy itself that the SRA board is carrying out the Law Society’s regulatory responsibilities. In exceptional circumstances, the oversight information provided to council could be used to enable council to decide whether or not its intervention is required to either change the SRA board, or to redesign the regulatory arrangements.”

However, the protocol emphasises that the society’s discharge of its oversight role should be “a positive, proportionate process of engagement”, rather than a “burdensome process designed to criticise or interfere”.

At the heart of the deal is a new business and oversight board, with four representatives from each of the Law Society and SRA, and three independent members. It will be responsible for advising the council on the oversight of the SRA, the delivery of shared services functions to both bodies, and a new director of organisation services, who will report directly to the new board.

This director will take on the responsibility for shared support services from the Law Society chief executive, and will be a member of both the society and SRA’s management teams.

Law Society president John Wotton said: “It’s vital for the profession and the public that the Law Society and the SRA cooperate to work effectively and efficiently while retaining the SRA’s operational independence. These new arrangements streamline arrangements for the Law Society’s oversight of the SRA and provide a sound basis for the future working relationship.”

SRA chairman Charles Plant said he was pleased the pair have been able “to resolve some longstanding issues arising from the implementation of the Legal Services Act 2007, and have agreed to put in place arrangements which will reinforce the SRA’s operational independence, ensure the effective management of support services shared by the Law Society and SRA, and promote good working relationships between the representative body and the regulator”.

The new director is one of three senior roles being created as part of a slimmed-down leadership structure at the society. There will also be chiefs of corporate affairs and of commercial affairs. Together with chief executive Des Hudson they will form the society’s executive board, replacing the current seven-strong management team. 

Search agencies have been appointed to recruit permanent candidates for all three positions, while two directors whose roles are affected immediately by the change – Steve Jeffree, operations director and group CIO, and Stephen Ward, director of communications – will both leave the society on 31 December this year.

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