Closed Consultation

Purpose of this consultation paper

• 1.

  The publication of the Legal Education and Training Review (LETR) report in July 2013 signalled the start of a significant programme of reform of the SRA's approach to education and training. In Training for Tomorrow, our response to the LETR report, we announced our intention to replace the mandatory continuing professional development (CPD) scheme for solicitors with a new approach to continuing competence. We said that we intended to take a broader look at how CPD can be used more widely within our regulatory framework to ensure the continuing competence of the legal services delivered by the entities we regulate and the individuals within them.

• 2.

  This consultation paper sets out:

  • the background to this consultation;
  • our currently preferred approach to continuing competence (option1); and,
  • other possible approaches (options 2 and 3).
• 3.

  We welcome your views on all of the issues raised in the paper and on the options for reform.

Background

• 4.

  We are a public interest regulator. Our approach to regulation is outcomes focused and risk based. We operate within a framework which requires us to meet the regulatory objectives¹ and ensure that best regulatory practice is adopted. Our aim is to ensure that the public has access to safe, ethical and competent legal services that meet their needs. We achieve this through our regulatory framework and the use of a range of regulatory tools. Education and training is one such tool.

• 5.

  The entities and individuals that we regulate play a key role in advising on and protecting the rights and liberties of individuals, ensuring the effective legal underpinning of commercial and financial systems and upholding the rule of law. They deliver important services nationally and internationally and these must be of an appropriate standard. Our role is to ensure that these services are delivered competently and ethically from the perspective of the consumer, the public interest and the courts, and to target our regulatory resource to the areas of highest risk. The types of client and the range of matters lawyers handle are wide and diverse and the knowledge, skills, resources, infrastructure and management systems needed to deliver this very broad spectrum of services to an appropriate standard will be varied and largely specific to individual entities. Our approach to regulation recognises that regulated entities and individuals are best placed to decide how to achieve the outcomes in the Code of Conduct within the context of their own practice and the needs of their clients and we hold the entities and individuals to account to ensure that they do so.

The history of the current CPD requirement

• 6.

  The requirement for solicitors to undertake mandatory CPD was introduced by the Law Society in 1985, when it had a dual role as a regulatory and professional body. When the SRA was established in 2007, we took responsibility for the mandatory CPD scheme. The scheme has not been changed since then, despite fundamental changes to our regulatory approach. The current CPD requirement is prescribed in detailed regulations which are separate from the Code of Conduct. It applies equally to all solicitors regardless of the context or practice within which they work. It is a blanket, 'one size fits all' regulatory requirement which is not outcomes-focused and is not targeted on the basis of risk.

• 7.

  The current CPD scheme requires all solicitors to undertake a minimum of 16 hours CPD activity each year. The subject area for CPD is for solicitors to choose but the types of activity which count are tightly defined. The need for reform of the current scheme was a central feature of the LETR report which confirmed the findings of our own research into CPD. The key weaknesses of the present system are that it:

  • is over prescriptive and inflexible;
  • concentrates on compliance with the arbitrary requirement to undertake 16 hours CPD rather than focusing on how CPD might assure competence;
  • does not enable us to target our regulatory resource to the areas of highest risk;
  • does not take into account the varied contexts within which solicitors now work and legal services are now delivered; and,
  • is difficult to enforce in a meaningful way.

Delivering competent legal services

• 8.

  The entities and individuals we regulate are required, by the principles in the SRA Handbook and the outcomes in the Code of Conduct, to provide a proper standard of service to clients and to train and supervise staff appropriately. The ways in which each entity and individual meet these outcomes will depend on their business model and the type of work they undertake. Education and training (including CPD) is one of the ways (albeit an important one) through which entities and individuals can take steps to ensure the delivery of competent services.

• 9.

  We know that many regulated entities and entities that employ regulated individuals² have appropriate systems in place to ensure they deliver an appropriate standard of service, and that many have made great strides to embed learning and development within their firms or organisations. There are strong business, as well as ethical and regulatory reasons for doing this. We said in Training for Tomorrow that it is not for the SRA to duplicate the role that entities play in this regard. Our starting point is that the training and development of their staff is fundamentally a matter for entities and individuals, not the SRA. Our intention is to prescribe education and training requirements only where it is necessary to ensure that those we regulate meet the regulatory objectives, where specific risks have been identified and where our other regulatory tools have not been, or are unlikely to be, appropriate. We shall hold firms and individuals to account for ensuring the proper competence of the services they provide and, when we have evidence that demonstrates that this has not been achieved, we shall take robust action.

A new approach to continuing competence

Option 1 - a shift from procedural compliance to competence

• 10.

  The primary objective of any new approach must be to provide assurance, for the benefit of the public, consumers and the courts, that entities and individuals regulated by the SRA can deliver competent legal services (as required by Principle 5 in the SRA Handbook). Appropriate education and training, including CPD, has a major part to play in achieving this outcome. However, the nature and extent of education and training required will differ between entities and between individuals within entities. The individual and the entity are therefore much better placed than the SRA to decide what education and training is necessary in order to achieve Principle 5. In this regard, there is an important difference between the competence required when an individual starts their career as a solicitor, where it is more possible to identify a common baseline of activities that solicitors should be able to do competently, and continuing competence, where, because of the wide variety of roles and functions that qualified solicitors and regulated entities undertake, it is much more difficult to prescribe specific development needs.

• 11.

  We therefore propose under this option to remove the prescriptive requirement for solicitors to undertake CPD through specific regulations. We would rely instead on existing provisions in the Handbook and Code of Conduct requiring regulated entities and individuals to deliver competent legal services and train and supervise their staff. It would be for regulated entities and individuals to decide how these outcomes are achieved. Implicit in the requirement to deliver competent legal services, is an obligation to reflect on whether the quality of practice is good enough, identify areas for development and ensure appropriate development activity is undertaken. We would provide non-mandatory guidance for entities and individuals, with suggestions for implementing this reflective cycle. For entities, the guidance could include examples of best practice in training, development and CPD systems. For individuals this could include guidance on:

  • how to reflect on development needs and identify and plan development activity to ensure competence;
  • the types of activities they might undertake to address their needs including both planned and formal development activity such as training courses and conferences, and informal learning through day to day work which the solicitor recognises has enhanced their knowledge and skills; and,
  • the range of tools and support that will be available to assist them.
• 12.

  The guidance would not be prescriptive about the number of hours CPD to be undertaken, or about the type of CPD activity that solicitors should undertake. It would focus on the outcomes to be achieved through development activity and on ways to implement the reflective cycle. We anticipate that the guidance would be of particular use to sole practitioners and others whose workplace does not already have such systems in place and who may not have the resource to develop their own bespoke products.

• 13.

  By removing the constraints of the existing CPD requirements, we would provide flexibility for entities and individuals to determine training and development according to their own needs. Responsibility for delivery of competent legal services and the education and training necessary to support this outcome would be shared between the individual delivering the service and the entity in which they work.

• 14.

  This option focuses on how the relevant requirements in the SRA's Handbook (i.e. delivery of competent legal services) can be achieved through education and training rather than by prescribing the process by which the outcomes are achieved. It would be up to regulated entities and individuals to decide for themselves how to meet the outcomes and we would undertake risk based audit and supervision of compliance with the outcomes. This would involve engagement with regulated entities and individuals to determine how they are meeting the outcomes and consideration of factors that might indicate a risk to delivery. Where firms are providing legal services of an appropriate standard, they will be able to continue to do so without interference from the SRA. Where we have evidence that this is not the case, we would engage with firms to understand why and take regulatory action where necessary.

• 15.

  This approach would also address the tendency towards a 'tick box' approach to compliance which the current CPD requirements tend to encourage and which our research shows is ineffective and a source of concern for the profession.

• 16.

  If this option were adopted, we could remove:

  • all of the regulatory arrangements in Part 3 of the Training Regulations 2011 and the administrative processes and resource associated with them; the requirement for solicitors to make an annual declaration regarding CPD compliance and the administrative resource associated with that activity; and,
  • the need for the SRA to accredit providers for the purposes of CPD and the administrative processes and resource associated with that activity.
• 17.

  This reduces significant burdens on compliant entities and individual solicitors practising either entirely on their own or within organisations that are not law firms. It also frees up SRA resource to target those who do not maintain appropriate standards for their consumers. Removing the requirement for providers (both external providers and organisations who seek internal authorisation for their in-house training) to seek authorisation from the SRA will reduce costs for those providers as the SRA charges both an authorisation fee and an annual fee to authorise external providers. It is possible that these cost savings could benefit those seeking to participate in such formal training activities.

• 18.

  This option would not mean a lowering of standards nor mean that we are not concerned about education and training. We consider it highly unlikely that an individual or entity would be able to deliver competent services over time without undergoing appropriate professional development. We would hold entities and individuals to account for ensuring the competence of the services they provide. Where we engaged with an entity or individual regarding a regulatory matter, or where we had evidence of incompetence, the fact that the entity did not have sound education and training systems in place or that the individual could not demonstrate that they had undertaken regular development planning or activity, could be a factor in any supervisory or enforcement action. This targeting of our regulatory resource to areas of highest risk is consistent with our wider regulatory approach and provides benefits both for the SRA as well as our regulated community.

• 19.

  Our proposed approach would be consistent with using education and training as a regulatory tool. In some cases we might identify risks which could be addressed through issuing guidance coupled with suggested areas of learning. Similarly, if we become aware, through our targeted or thematic supervision of firms, that some firms are providing poor quality advice in a particular area of law or practice, we could issue guidance to firms on how to ensure their staff remain competent to practise in this area. There might be higher risk circumstances in which we prescribe mandatory, targeted training requirements.

• 20.

  Option 1 is a departure from the more traditional approaches to education and training and CPD taken by many professional and regulatory bodies (particularly those who do not operate an outcomes-focused approach to regulation) and we recognise that it has some disadvantages:

  • The converse of the benefit of avoiding a prescribed 'tick box' approach to CPD is that individuals and entities will have to spend time planning and reflecting on their professional development requirements. For some this may be more burdensome than following a prescribed approach.
  • Those responsible for compliance or education and training in entities might in some cases find it harder to ensure that individuals undertake appropriate CPD if there is no specific regulatory obligation in this regard.
  • It is procedurally easier for us to judge compliance against a standardised requirement and we shall need to dedicate time and resource to developing the new risk based approach and strengthening our supervisory and enforcement capacity to deal with the broader variety of approaches to education and training that individuals and entities are likely to adopt.

Question 1: Do you foresee any impacts from option 1, positive or negative, that we have not already identified?

• 21.

  Many entities and individuals will welcome the approach set out in option 1 for the flexibility and freedom that it provides and the reduced regulatory burden. Our current view is that it is a proportionate and effective means of achieving our regulatory objectives. However, we know from our research and our engagement with the profession at the end of last year that, for some, an appetite remains for the SRA to continue to set a more traditional, mandatory CPD requirement for solicitors.

• 22.

  For this reason, we discuss below two further options which are based on retention of a mandatory CPD requirement for solicitors, expressed through regulations. The first of these is a prescribed approach based on the requirement for all solicitors to identify, plan and implement training and development based on an evaluation of their training needs (the "reflective cycle") and the second is a prescribed approach based on the current model which requires a minimum number of hours CPD.

Option 2 - regulations requiring solicitors to plan and reflect on their development

• 23.

  This option involves retaining a mandatory requirement for solicitors to undertake CPD whilst addressing some of the weaknesses of the current approach.

• 24.

  One of the main recommendations of the LETR report was that regulators should adopt a "benefits led" model of CPD which focused on how participants plan, implement, evaluate and reflect on their training needs and subsequent learning. Instead of requiring solicitors to undertake a minimum number of hours CPD, as in the current scheme, option 2 would require solicitors to reflect on their practice, identify their training needs and plan, implement and evaluate their training on an annual basis.

• 25.

  This approach would require solicitors to identify and document their training needs in a development plan, implement that plan and evaluate its effectiveness on a documented annual cycle. The development plan could also be linked to internal appraisal processes and to the Competence Statement for solicitors that we are in the process of developing and on which we will consult later in the year. This need not be unduly onerous. In some years, reflection might lead to the decision that no specific training requirements were necessary. The point would be to impose a discipline on solicitors to reflect regularly on their needs and plan accordingly.

• 26.

  There are similarities between options 1 and 2. Both propose a system based on a reflective approach under which solicitors and entities would regularly consider their CPD needs and take necessary action to meet those needs.

• 27.

  Option 2 differs from option 1 in that it specifies, in the form of regulations, a level of detail as to how CPD must be planned. In option 1, the detail of how to implement the reflective cycle would be set out in guidance which regulated entities and solicitors could choose whether to adopt. Our guidance would set out good practice and helpful resources. But an individual might reflect on their practice in ways other than described in the guidance and, provided competence was maintained, we would have no issue with that.

• 28.

  In option 2 we would be prescriptive about how solicitors should plan, record and reflect on their development activity. It would require a reflective log to be kept and an annual cycle of reflection.

• 29.

  Options 1 and 2 also reflect differences in regulatory focus. In option 1, our focus would be on maintaining competence, including investigating the reasons for any shortcomings. In option 2, our focus would also be on monitoring compliance with the scheme's requirements.

• 30.

  Like option 1, this approach would address one of the main problems with the current CPD scheme which is that a requirement to undertake a minimum number of hours CPD each year creates a culture which is concerned not with the benefits that are derived from education and training but with compliance with the minimum requirement. The focus on compliance with the hours requirement can distort professional development within the profession and undermine the overarching objective of ensuring competence. This option would also provide flexibility for solicitors and their employers to decide for themselves how best to meet their development needs. However, it would not offer the flexibility afforded by option 1 as it would involve an element of prescription, through regulations, about the process that solicitors should follow to plan and reflect on their development.

• 31.

  Adopting this approach, would remove the need for the SRA to authorise providers for the purposes of CPD and the administrative processes and resource associated with that activity.

• 32.

  If we decided to prescribe a CPD requirement as described above, we would place responsibility for ensuring compliance with the requirement on regulated entities rather than requiring solicitors to make an annual declaration to the SRA. We would monitor compliance with the requirement through our supervisory activity and, where we had evidence that the requirements were not being met, we would engage with entities and individuals to understand why and take regulatory action where necessary. Where a solicitor did not work for a regulated entity or worked alone, the obligation for compliance would fall to the individual solicitor.

• 33.

  The advantages of this option are:

  • it would remove the administrative burden, for both the SRA and the profession, associated with reporting on compliance with the CPD requirements on an annual basis and with the authorisation of CPD providers. It could still be supported by the use of targeted education and training as a regulatory tool where specific risks have been identified or for remedial purposes where after the event regulation has been ineffective;
  • as compared to option 1, it focuses solicitors' and entities' attention on the need to undertake CPD in a reflective and planned manner; and,
  • if we were to exercise supervisory or enforcement powers in relation to an individual or entity, there will be an evidence base which could be used to establish whether appropriate CPD has been undertaken.
• 34.

  The disadvantages of this approach are:

  • it removes the flexibility provided by option 1 for entities and individuals to decide for themselves how to meet the relevant principle and outcomes in the SRA Handbook relating to delivery of competent legal services and education and training and how to reflect and plan development needs;
  • the administrative burden associated with meeting a formal requirement to follow and document learning and development in line with the "reflective cycle" may not be appropriate for all individuals or regulated entities. While this burden may not of itself be significant (and it is likely that many individuals and entities would adopt such a process even under option 1) we are very conscious of the cumulative time and cost impact on individuals and entities of compliance with regulatory obligations and do not wish to impose such requirements unless they are necessary to achieve regulatory objectives;
  • it risks focusing attention on compliance with the requirements of the regulations and the outputs of the process (i.e. the reflective log) rather than on the obligation to deliver a proper service and remain competent.

Question 2: Do you foresee any impacts from option 2, positive or negative, that we have not already identified?

Option 3 - retain a minimum hours scheme with some modifications

• 35.

  We could retain a mandatory CPD scheme for solicitors which prescribes a minimum number of hours CPD to be undertaken each year, whilst addressing some of the shortcomings of the current scheme by requiring the CPD to relate to the individual's current or anticipated area of practice and allowing a wider range of activities to count, recognising the value of on the job learning. This approach could be supported by the use of targeted education and training as a regulatory tool where specific risks have been identified or for remedial purposes where after the event regulation has been ineffective.

• 36.

  The advantages of this option are:

  • it is familiar to the profession and it is easy for solicitors to know when they have complied with the requirement;
  • a minimum hours requirement can act as a lever to ensure a minimum level of participation in CPD and to ensure employers provide time and resources to aid CPD participation; and,
  • it is easier for us to monitor compliance.
• 37.

  The disadvantages are:

  • the process is largely form based. It tells the individual or the SRA very little about the value of the CPD undertaken. This approach therefore risks creating a false certainty as it focuses attention on compliance with a rule, rather than on whether practice is of a proper standard;
  • there is a significant risk that continuing to prescribe a minimum hours requirement could encourage solicitors to focus on minimum compliance with the CPD requirement rather than on their competence and the relevant outcomes in the Code of Conduct. For some solicitors the minimum hours would be too few while, for others, it might be too many.
• 38.

  If we decided to retain a mandatory, hours based CPD scheme for solicitors, we would place responsibility for ensuring compliance with the requirement on regulated entities, as described in paragraph 32 above, rather than requiring solicitors to make an annual declaration to the SRA. Where a solicitor did not work in a regulated entity or worked alone, this obligation would fall to the individual solicitor.

Question 3: We would welcome your views on whether or not the SRA should continue to suggest a minimum number of hours CPD for all solicitors.

How should we monitor continuing competence?

• 39.

  Whatever approach we adopt to ensuring continuing competence amongst our regulated community, we must have in place appropriate systems to identify when our expectations are not being met. In the proposals we set out in option 1, we would rely on our risk assessment, consumer engagement and supervisory activity to identify issues and engage with firms and individuals accordingly.

• 40.

  We have said in paragraph 18 that under option 1, we would hold entities and individuals to account for ensuring the competence of the legal services they provide. If we decide to retain a mandatory CPD requirement for solicitors as described in options 2 and 3, we have suggested above that we would rely on the regulated entity (or individual where they did not work in a regulated entity or worked alone) to ensure compliance and we would identify risks through our supervisory activity. There are other possible approaches to monitoring competence and (in the case of options 2 and 3) compliance with a CPD requirement. We describe these below and would welcome your views on the advantages and disadvantages of these approaches:

  • i.

    We could require a nominated individual within a regulated entity to take responsibility for the competence of legal services and/or compliance with CPD requirements and for reporting material breaches to us. This obligation is already covered by the existing obligations of the Compliance Officer for Legal Practice (COLP). It may not be necessary, or desirable, to introduce a specific, additional requirement on the COLP as this obligation already exists, albeit tacitly.

  • ii.

    In some firms responsibility for ongoing training and development may not, in practice, fall to the COLP but instead to another individual, e.g. to an individual with specific training responsibility, to a managing partner or to an individual responsible for quality assurance. Under options 2 and 3, we could introduce a requirement for all entities to nominate an individual who would take responsibility for compliance with the SRA's education and training related requirements. This could be the COLP or another person. In the case of any risks to delivery of the desired outcomes, we would engage with the nominated individual in the first instance. Formal nomination of individuals responsible for education and training requirements within entities would require significant resource from us to implement appropriate systems to receive and record nominations as well as time and resource on behalf of regulated entities to notify us. A more cost effective, approach might be simply to require entities to have in place a specific individual with responsibility for education and training matters but for this to be reported to the SRA only in the event of the need for targeted supervision or enforcement activity by the SRA.

  • iii.

    If we retain a prescribed CPD scheme (as under options 2 and 3), we could require all regulated entities to make an annual declaration to the SRA that the solicitors employed by them had complied with the CPD requirement. This option would provide us with assurances that solicitors had met the requirement and would provide some additional incentive to solicitors and entities to comply, but would require resource from both the SRA and regulated entities to handle the annual reporting. This option is similar to the current system, with the difference that entities rather than solicitors would be required to make the declaration. Under the current approach, only a small percentage of solicitors declare that they do not meet the requirement each year. In cases of non-compliance, the SRA simply grants the solicitor extra time to comply and takes no further action. So, unless there is a change in enforcement priorities, which would be difficult to justify given the process driven nature of the reporting obligation, the regulatory benefits to be derived from a regular reporting requirement are limited.

Question 4: What do you see as the advantages and disadvantages of these alternative approaches to monitoring?

Conclusion

• 41.

  Our objective is to implement a new approach to continuing competence that focuses on the overriding obligation to deliver competent legal services, places responsibility for education and training firmly with regulated entities and individuals and provides appropriate flexibility for them to decide for themselves how to comply with Principle 5 and the relevant outcomes in the Code of Conduct whilst ensuring that our regulatory framework provides the necessary assurance to the public, consumers and the courts about the standards they can expect from those we regulate.

• 42.

  We have set out in option 1 what we consider to be the most effective and least onerous way of achieving this. However, we welcome views on this and the other approaches we have considered and which are set out in options 2 and 3.

Timescales

• 43.

  The timescales for implementation of any new approach will depend on the responses received through the consultation and on the final approach adopted. As all of the options involve either removal of or amendment to the current CPD requirements, we anticipate implementing the new approach at the end of an existing CPD year to avoid the need for transitional arrangements and to help entities and individuals whose current systems are designed on that basis. To assist in our planning, we would welcome views on the extent to which you would need to make adjustments to existing systems in order to move to a system based on each of the options set out above, or whether the options set out could be accommodated within existing systems and therefore implemented more quickly.

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