Editor's letter | The price of survival
The SRA's handbook does not come into force for another four months, at the earliest, but it's already causing nervousness across â€¨the profession, says Jean-Yves Gilg.
The SRA’s handbook does not come into force for another four months, at the earliest, but it’s already causing nervousness across '¨the profession.
Officially renamed ‘SRA Standards and Regulations’ at the regulator’s COLP and COFA conference last November, it certainly presents grounds for concern but there is also innovative thinking behind the SRA’s approach.
The concept of the new handbook was first unveiled in June 2017 and the final draft, circulated in June 2018, was approved by the Legal Services Board on 5 November.
Outcomes-based regulation is the on-going premise, so, for firms, it’s primarily a question of ensuring their systems and processes can continue to deliver compliance.
What’s unsettling '¨is the option for solicitors to work in unregulated businesses and provide legal advice to the public without having to come off the roll or operate in a ‘non-practising’ capacity.
The move has provoked concern about the potential for conflicts of interests. The SRA’s retort is that the new rules require solicitors in unregulated businesses to have professional indemnity insurance – although not the minimum required of solicitors working in regulated firms – and they will not be allowed to advise in respect of reserved activities.
Critics say it will create further confusion and is an opportunity for unscrupulous individuals to leverage the solicitor brand without the obligation to offer the level of protection required of law firms. There have already been serious instances of “bad behaviour”, they say, in relation to litigation friends effectively conducting litigation in breach of the law.
But the SRA is of the view that this is a risk worth taking in the interest of access to justice. So too is the Legal Services Board. On the face of it, this development'¨is merely a loosening – however controversial – of the practice rules in the name of access to justice.
What is really at stake however is how the solicitor profession can survive further deregulation of the sector and where that would leave the SRA. At present, both the LSB and the SRA are operating within the remit set out'¨ in the Legal Services Act 2007.
The act hasn’t touched the cornerstone of the current regulatory framework: regulation by title, based on a set of reserved activities. It is irrelevant for the purpose of the law as it stands that a solicitor may never advise in respect of a reserved activity.
Any change to this framework would require an act of parliament. But as LSB chair Dr Helen Phillips noted in our exclusive interview, there is no appetite in government to embark on a reform programme at present.
There are, however, private initiatives – notably the review led by Stephen Mayson for UCL - that are preparing the ground. The Mayson review is broadly supportive of doing away with title-based regulation and replacing it with a system based on risk identified at specific points.
Separately, the LSB remains keen on bringing currently unregulated lawyers, such as will writers, within its jurisdiction, although not through yet another frontline regulator.
If this is the general direction of travel, then the end point has to be a single regulator, with jurisdiction over all lawyers, irrespective of what they are called.
As an intellectual exercise, '¨it would be fascinating but it could also, in one swoop, consign solicitors to history, along with what the profession stands for.
Solicitors represent by far the largest legal constituency in this country. '¨If the SRA’s assumption is correct, its plan will deliver more solicitors, spread around firms and unregulated businesses; they will be seen as the lawyers of choice; and access to justice will be at an all time high.
Arguably, the SRA would become the body most suitable to become the single legal regulator. But this is a high-stakes game with no guarantee of winning, and if it takes '¨it any further, the SRA risks diluting the solicitor brand beyond repair. That would be too high a price to pay.
Jean-Yves Gilg is editor of Solicitors Journal