The Solicitors Regulation Authority will rebuff any efforts to restrict its ability to regulate alternative business structures (ABSs) that are 100% owned by non-lawyers, its chief executive has confirmed to Legal Futures.
Ahead of the crucial Law Society council vote later this month on whether to approve the SRA’s application to become an ABS licensing authority, there are suggestions of a compromise that would mean the SRA not regulating ABSs that are wholly externally owned, at least initially.
This could allay concerns of council members who think the Law Society should have nothing to do with regulating ABSs, and those unconvinced that the SRA will be able to handle it anyway.
However, chief executive Antony Townsend told Legal Futures yesterday that the SRA’s “long-settled position is that we do not want to restrict business models, but will address the risks of each application on its merits”. The authority “won’t be afraid” to reject applications or impose conditions on an ABS licence, he added.
Such a restriction would mean that the likes of the Co-op and DAS would be unable to seek regulation from the SRA, and with the Council for Licensed Conveyancers the only other possible option, the Legal Services Board might still be forced to implement its contingency plans to regulate ABSs itself.
At its meeting yesterday, SRA board chairman Charles Plant said that having reviewed the preparations for both ABSs and outcomes-focused regulation, and “considered carefully points raised by the Law Society”, they believed its “comprehensive programme of work is on track”.
As a result, the board expects to be in a position to approve the new regulatory arrangements and licensing authority application at a specially convened meeting on 15 March, and then submit the application to the council for approval.
Mr Plant added: “Following that, the senior management and the board propose to continue to exercise a high degree of supervision and oversight to the work programme to ensure that all elements remain on track and that the organisation is ready, on 6 October, to license ABS and to regulate them in the public interest thereafter.”
The timetable for 6 October is tight because of the approvals also needed from the Legal Services Board and then the Ministry of Justice once the Law Society – as the approved regulator as specified in the Legal Services Act 2007 – formally submits the application. If the council does not approve the application in March, then the SRA will not be in a position to start regulating ABSs on 6 October, Legal Futures understands. Were the decision deferred until April, say, then the SRA would be able to start regulating in November.
As part of the preparations for the decision, Mr Plant, Mr Townsend and Samatha Barrass, executive director of supervision, risk and standards, addressed the last council meeting during its private session, while Law Society president Linda Lee, chief executive Des Hudson and Russell Wallman, director of government relations, were present during the private part of yesterday’s board meeting.
Charles Plant, Des Hudson and Council for Licensed Conveyancers chairman Anna Bradley are all taking part in the Legal Futures Conference next month.