SRA pauses compliance rule changes

The Solicitors Regulation Authority (SRA) has issued an important update regarding the pending rule changes aimed at the separation of compliance roles and unilateral decision-making within legal firms. This comes after widespread concerns, particularly from smaller firms, about the potential implications of these changes. Aileen Armstrong, SRA Executive Director of Policy and Strategy, highlighted the importance of governance in preventing consumer harm while acknowledging the challenges that smaller firms may face. She expressed appreciation for the feedback received, saying ‘We appreciate and understand the concerns that have been raised about this rule change, particularly by smaller firms.’

Armstrong continued to explain the SRA’s commitment to addressing consumer safety, stating 'We know that the profession supports our ambition to prevent consumer harm. Our aim, in line with the direction set by the LSB, is to tackle the harms that could arise where there are no checks and balances on individuals taking decisions in firms. Strong firm governance is an important protection in preventing consumer harm. However, we are aware of the risk of unintended consequences, particularly for smaller firms.'

In response to these considerations, the SRA has announced a pause in the implementation of the changes to assess and consult further. ‘We are pausing to take stock. Over the coming weeks, we will actively consult with stakeholders on potential options we are developing with a view to making necessary changes to our approach and achieving the objective in a proportionate way,’ she said. This move demonstrates the SRA’s willingness to engage with stakeholders and refine its approach, thereby balancing regulatory compliance with the practical realities faced by smaller legal practices.