Chair of the Professional Rules and Regulation Committee
Jonathan Kembery, Freshfields Bruckhaus Deringer LLP
The response by the CLLS Professional Rules and Regulation Committee to the SRA Reporting Concerns Consultation.
Response of the CLLS Professional Rules and Regulation Committee to the SRA Consultation “Looking to the future: better information, more choice”
03/07/2014 - Response to further SRA consultation on proposed changes to the registered European lawyer regime
The Committee responded to the SRA’s further consultation on its proposed amendments to the Handbook. The response commented specifically on the proposal to apply the conduct provisions to solicitors within foreign firms in the same way as it was proposed they would apply to RELs within an EEP.
The consultation sought views on policy changes and associated amendments to the SRA Handbook which were aimed at achieving a proportionate regulatory framework for the authorisation and supervision of multi-disciplinary alternative business structures providing legal and non–legal services. One driver behind the consultation was the SRA’s concern that some of the rules in the SRA Handbook may have become an impediment to the effective licensing and regulation of some licensed bodies; and in particular, those rules that require all legal activity within an SRA authorised MDP to be SRA regulated. The CLLS response argued that if non-Reserved activity is not regulated when it is carried out by a non-Authorised person, then it need not be regulated when it is carried out by a better-qualified Authorised Person. The CLLS argued that this regulatory asymmetry means that solicitors, as Authorised Persons, are commercially disadvantaged in comparison with non-Authorised Persons, when doing the same tasks. The CLLS response raised some further concerns, (including the fact that the SRA’s regulatory proposals in this area do not appear to be based on a comprehensive risk analysis of the field), and responded to the specific consultation questions.
23/06/2014 - Response to SRA consultation: Proportionate regulation - changes to minimum compulsory professional indemnity cover
This consultation paper contained proposals which the SRA stated were aimed at reducing the regulatory burden, providing targeted regulation and increasing competition. The proposals form part of a wider SRA review of the scope of cover under the Minimum Terms and Conditions. The CLLS submission in response supported in principle the idea of reducing the insurance costs burden in a manner which would allow firms to consider the appropriate level of cover they need (subject to a mandatory minimum). However, it expressed the view that the SRA needs to have consulted with the insurers before making specific proposals. It went on to state that the consultation paper had adduced no evidence that the proposals would in fact attract the costs reductions they are aiming for, and that a reduction in the minimum insurance requirement may well have no effect on the premiums charged by insurance companies. It stressed the need for the proposals to be evidence-based, and strongly recommended that any reform be delayed until the 2015 renewal.
20/06/2014 - Response to SRA consultation: Compensation Arrangements Review - the introduction of an eligibility criteria
The consultation invited views on the SRA’s arrangements for compensating clients who suffer financial loss due to dishonesty, failure to account or civil liability of uninsured practitioners. The CLLS submission responded to the specific consultation questions. The submission also expressed, more generally, a concern that the SRA was consulting on an important topic that may have significant implications, in particular for consumers who do suffer losses, without explaining (i) clearly what has driven the proposal or (ii) providing supporting evidence, that only the SRA can provide, about the impact of the proposal.
19/06/2014 - Response to SRA consultation on Proportionate regulation: changes to reporting accounting requirements
This consultation paper contained two proposals: removal of the mandatory requirement that firms must submit an annual accountant's report to the SRA, and requiring COFAs to sign a declaration that they are satisfied that their respective firms are managing their client accounts in accordance with the SRA Account Rules. The proposals form part of an SRA programme to reform its regulatory regime “to reduce unnecessary burdens and provide flexibility of approach to deliver good financial management”. The submission responded to the specific consultation questions, and argued more generally that the consultation was premature, and that no changes should be made to the current reporting accountant regime until such time as the general review of the SRA accounts rules had been completed.
The consultation sought views on proposals to remove “the unnecessary and over burdensome process which requires solicitors who do not hold practising certificates to complete a yearly online application and pay a fee if they wish their name to remain on the roll of solicitors”. The Submission broadly agreed with the consultation proposal to stop the annual updating process while keeping the power for the SRA to carry out updates when it thinks these are needed. It also broadly agreed with the proposal’s expressed purpose, being ‘to remove the unnecessary and burdensome process’ involved with solicitors who do not have Practising Certificates (‘PCs’) having to renew their roll applications annually. However, the Submission also raised concerns about the failure of the Consultation Paper to address the impact of remaining on the roll in any detail, including in relation to the status of undertakings given by non-practising solicitors who remain on the roll. It also raised concerns about some of the consequences that might arise were the annual updating process to be dispensed with.
The consultation sought views on proposals to amend the SRA Account Rules 2011 relating to how practitioners deal with client money they are unable to return to clients at the end of a matter (residual client balances), including the processes surrounding the withdrawal of such funds and the basis for distribution to charities. The Submission in response noted that the CLLS supports a proposal to increase the level at which practitioners can self-certify transfers of residual client balances, although it noted that there are differing views within the CLLS about the level at which SRA authorisation should be required. The submission also expressed concern that a significant increase in the self-certification level should be balanced by appropriate but proportional checks and balances. Furthermore, it agreed with the SRA’s view that it ought not to restrict the charities to which residual balances should be transferred.
The response highlighted the amount that the City firms pay annually towards the regulatory and ‘permitted purposes’ costs of the legal sector, and expressed concern about the absence of the item “Mapping the Unregulated Market” from the LSB’s planned research programme. The response called on the LSB to answer a question that it had posed in an earlier consultation (“Enhancing consumer protection, reducing regulatory restrictions”) namely “there is a question about the relative balance of regulatory focus. Is the current balance of regulation right or are there areas where deregulation may be appropriate?’“
The consultation paper invited views on the SRA’s proposal to increase the current level of its fining powers for ‘traditional’ firms (i.e. non-ABS firms) from the current level of £2,000, and to enable the SRA to agree (rather than impose) fines of a more significant amount with the regulated person concerned under its existing policy of agreeing the outcome of an investigation under its Regulatory Settlements Agreements policy. The response commented in detail on the consultation proposals, and questioned the consultation paper’s presumption that the disciplinary regime that currently applies to ABS firms should be extended to all regulated firms.
26/11/2013 - Response to LSB consultation on Chairs of regulatory bodies: Consultation on an amendment to the Internal Governance Rules to require that the Chairs of the Boards of the regulatory arms of each applicable approved regulator be a lay person.
The consultation paper focussed on a proposed amendment to the Internal Governance Rules to require that the Chairs of the Boards of the regulatory arms of each “applicable approved regulator” be a lay person. In its response, the Committee raised a number of points, including that it saw “little merit in a rule change which necessarily narrows the field of candidates for the role of Chair of these bodies, where no evidence is given to show that the presence of a non-lay Chair has meaningfully impeded the independence of the regulator”.
09/09/2013 - Review of the Legal Services Regulatory Framework: CLLS Submission to the Ministry of Justice
Review of the Legal Services Regulatory Framework: CLLS Submission to the Ministry of Justice.
Minutes of Meeting held in June 2013
Response to SRA Consultation on New Overseas Rules
Response to SRA Consultation on New Overseas Rules – Comments on Annexes
04/07/2013 - Response to SRA consultation Red Tape Initiative Phase 2: Removing unnecessary regulations and simplifying processes
Response to SRA consultation Red Tape Initiative Phase 2: Removing unnecessary regulations and simplifying processes
Response to SRA consultation: Indicative guidance on financial penalties
Response to SRA Consultation on Handbook Amendments Relating to International Practice
Response to the LSB Consultation on its Draft Business Plan 2013
Minutes of Meeting held in February 2013
Response to SRA Consultation on Co-operation Agreements
Response to SRA consultation on The Future of Authorised Professional Firms
Response to HMG Consultation on Introducing a Statutory Register of Lobbyists
Response to the SRA's "Regulation of International Practice" Consultation
Response to SRA consultation “SRA financial protection review”
Minutes of the Meeting held in December 2011
Minutes from Meeting held in June 2011
Response to SRA Consultation "Alternative Business Structures Fee Structure"
Response to SRA Consultation "Future Client Financial Protection Arrangements"
CLLS Response to the SRA Architecture of Change Part 2 Consultation
Response to LSB Discussion Document on referral fees, referral arrangements and fee sharing
Response to SRA consultation “The architecture of change: the SRA's new Handbook”
Comments on conflicts of interests aspects of the SRA Consultation "The Architecture of Change: The SRA's New Handbook"
Response to SRA OFR Consultation "Transforming the SRA's Regulation of Legal Services"
Minutes from Meeting held in April 2010
Response to consultation on Disclosure of Information by the Office for Legal Complaints and the Legal Services Board
Response to SRA Consultation "Achieving the Right Outcomes"
Response to Consumer Panel of the Legal Services Board enquiry into referral arrangements
Response to LSB Consultation re Alternative Business Structures - Approaches to Licensing
Response (detailed suggested amendments) to SRA consultation on amendments to Rule 3 and Rule 4 of the Solicitors' Code of Conduct 2007
Response to SRA Consultation - "Moving Toward a Fairer Fee Policy - Second Consultation"
Minutes from Meeting held in October 2009
Response to consultation on handling complaints about the SRA
Response to SRA Consultation paper - Repeal of Solicitors' (Non-Contentious Business) Remuneration Order 1994
Response to the LSB discussion paper Designating New Approved Regulators and Approving Rule Changes
Response to SRA Consultation Paper 19 - Moving Towards a Fairer Fee Policy
Response to SRA consultation on the Schedule of Charges - SRA (Cost of Investigations) Regulations 2009
Regulating Alternative Business Structures: New Forms of Practice and Regulation Consultation Paper 18
Response to Legal Services Board Discussion Paper "Wider Access, Better Value, Strong Protection"
Initial Response to Lord Hunt Evidence
Letter to the LSB re The Levy, Funding Legal Services Regulation
Draft Services Regulations to Implement the Services Directive (Directive 2006/123/EC)
Response to Legal Services Act Consultation on Enhanced Investigatory Powers - Policy Statement
Response to Consultation on Firm-Based Regulation: List of Areas of Work
Response to Consultation on Decision Making Criteria
Response to Lord Hunt's Review of Legal Regulation
Consultation Paper 16: Better regulation: A new approach to regulating legal services firms and solicitors
Response to CP 15 - Regulatory Risk and Information Requirements 2009
Professional Rules and Regulation Committee's comments on the Legal Services Board Draft Business Plan 2009/10
Response to consultation on proposed amendments to the conflict and confidentiality rules
Response to Consultation Paper 14: New Disciplinary Powers for the SRA - Public Rebukes and Fines
Firm Based Regulation - Fee-Raising Policy for 2009: Consultation Paper 12
Letter to Nick Smedley in response to the Review of Regulation of Corporate Legal Work
Consultation on Draft SRA (Cost of Investigations) Regulations
Approval of New Partnerships and Non Lawyer Managers: New Application Forms
Legal Services Act CP9: Draft SRA Practising Regulations (2009)
Legal Services Act CP 8: Changes in Regulatory Processes for Individuals and Firms
Response to Legal Complaints Service Consultation on Exploring the Publication of Solicitors' Complaints Records
Legal Services Act CP7: Information Requirements in Context of Risk Based Approach to Regulation
Legal Services Act CP6: Client Financial Protection
Legal Services Act CP5: Changes to the Recognised Bodies Regulations
Legal Services Act CP 4: Changes to the Solicitors' Accounts Rules 1998
Legal Services Act CP3: Amendments to the Code of Conduct
Legal Services Act CP2: Change to Framework of Practice Rules
Additional letter from CLLS regarding the character and suitability test for non-lawyer managers of an LDP
CLLS letter endorsing the Allen & Overy LLP submission to the SRA regarding the character and suitability test for LDP Non-Lawyer Managers
Allen & Overy LLP response to SRA consultation on the character and suitability test for LDP Non-Lawyer Managers
Minutes from Meeting held in February 2008
Response to SRA consultation on the Legal Services Act - new forms of practice and regulation
CLLS response to LCS consultation on publishing complaints
City of London Law Society Briefing on the New York Bar proposed Conflicts Rule Change