News that the Solicitors Regulation Authority (SRA) is set to push ahead with changes to the rules governing solicitors was today greeted with dismay by the Law Society of England and Wales.
“The SRA’s role is to regulate solicitors to ensure consumers are protected – yet here it is opening the door for some solicitors to work in unregulated entities, sweeping away long standing rules referencing conflicts of interest, proper professional indemnity insurance and access to the compensation fund (underwritten by the profession) so if something does go wrong consumers could struggle to recover any losses,” said Law Society president Robert Bourns.
A 2016 survey of consumers conducted by Ipsos Mori showed that 86% felt solicitors’ businesses should have professional indemnity insurance.
“If solicitors are allowed to work in unregulated entities the protections that attach to the communications between solicitors and clients (and vice versa) may not apply. Clients seek advice about deeply private and often sensitive issues – they must be able to rely on the exchanges with their solicitor being covered by legal professional privilege as they currently are for solicitors in regulated entities.”
Responding to a 2016 Law Society survey, a substantial number of solicitors expressed real concern with many of the proposed changes to the handbook including 82% saying encouraging solicitors to work in unregulated businesses would damage the solicitor brand – a brand that the Competition and Markets Authority (CMA) identified as synonymous with quality advice.
Robert Bourns added: “The purpose of the SRA is to regulate the solicitor profession ensuring the protection of consumers – that it is pursuing a deregulatory agenda to the detriment of both members of the public and a profession regarded the world over as the gold standard is frankly baffling.
“At the moment a member of the public can walk into a solicitor’s office on any high street in England and Wales and be assured they are fully protected in the unlikely situation something goes wrong – now, if the SRA proceeds, we will have the current clarity blurred so consumers cannot easily tell what kind of outfit their solicitor works for.
“For the SRA to claim that these consumer protection risks can be managed by a ‘consumer information strategy’ to be developed in the future, is simply not realistic. They acknowledge the harm of consumer risk and confusion (also recognised by consumer groups and the CMA), but carry on regardless.”