Closed Consultation
Better regulation: A new approach to regulating legal services firms and solicitors
6 July 2009
Legal Services Act: New forms of practice and regulationConsultation paper 16
The deadline for submission of responses to consultation paper 16 on the Legal Services Act was 31 March 2009.
You can download feedback on responses to consultation paper 16.
The information that appears below is for reference purposes only.
This consultation paper sets out the Solicitors Regulation Authority's evolving new approach to regulation, and in particular how the shift towards regulating legal firms will affect the way in which we regulate. There are a number of factors driving this new approach:
- We inherited an approach to regulation which had been predominantly reactive, generally secretive, and concerned with the regulation of individuals in small practices.
- Our strategy, published in 2006, signalled a shift to more explicit risk-based regulation in the public interest.
- The principles of better regulation will soon to apply to all legal regulators as a statutory objective.
- We also need to build a more flexible form of regulation fit not only for the current wide range of firms but also one that can be appropriately adapted to new forms of practice, both legal disciplinary practices and alternative business structures in future.
- New statutory powers give the SRA more flexibility than we had before and require firm-based regulation as well as the more traditional regulation of individual solicitors.
Much of our recent work has necessarily concentrated on the changes in rules, regulations and procedures to enable new forms of practice from March 2009. This has involved the concentration on what looks little more than new bureaucratic regulatory processes. Those processes are necessary, but are only part of the changes required to deliver the new approach.
We are setting a new vision of law firms regulated by the SRA. We want to concentrate our resources on dealing with serious risk. We want to encourage law firms to tackle risk themselves wherever possible, reducing the overall regulatory burden and allowing us to concentrate upon those who can't, or won't, put things right. To do that, we need to build a new relationship between the SRA, as regulator, and the firms we regulate.
We recognise that the vast majority of firms wish to act ethically and to be compliant with the relevant rules and regulations. Firms who respond positively to the new relationship can expect lighter regulation. (Those who don't, and those who do not recognise that this new relationship needs to be built on some degree of mutual trust, will be dealt with severely if something goes wrong as a result.) The development of new supervisory visits for larger corporate firms is part of our shift in emphasis. Regulatory settlement agreements, which have been used successfully to deliver appropriate but proportionate regulatory action where firms are willing to take responsibility for past breaches, are also part of the shift in emphasis.
This consultation paper largely concentrates on how the SRA intends to adapt its policies relating to enforcement and disciplinary action in the light of new statutory powers relating to firms, but these issues should be seen as a key part of developing this broader new approach.