Looking at the SRA Reforms Ahead

It now seems a long time since the SRA issued a series of consultations in 2016 and 2017 on the new “future proofed” Handbook. All firms, and COLPs and COFAs in particular, should be aware that the SRA Board intends to sign off the final version in July following which it will go to the Legal Services Board for approval – which if granted will result in publication this autumn. The current plan is to bring the new Handbook into effect in April 2019 – although there have been suggestions that further delays might arise. We will of course provide you with more information once we are aware of the final dates.

The main changes will be that the Handbook will be much shorter with more detail being stripped out, including all of the indicative behaviours in the current Code of Conduct. This will probably mean more emphasis on the principles which will themselves be reduced in number.

There will be two Codes of Conduct – one applicable to firms and the other to individuals. The SRA has tried to focus in the latter on how individuals should behave in the context of practice, whilst in the former the emphasis is on the management issues of running a firm and the need for policies, systems and procedures. Inevitably, however, there is a lot of overlap with subjects such as conflicts, confidentiality, referral arrangements and client care appearing in both. The separation of the codes arises in part from the continuing controversy as to the SRA’s determination to permit solicitors to provide non-reserved legal activities other than through some form of authorised practice – a proposal that has been strongly opposed by the Law Society and has now also triggered concerns as to the adequacy of client protection by some consumer concerns as well.

Whatever the concerns about the proposed Codes of Conduct there is likely to be a broader welcome for the proposed simplification of the Accounts Rules, with specific time periods being replaced by the need to act “promptly”. There is also a revised definition of client money to enable firms that collect client money for the purposes of meeting outstanding professional disbursements and fees they have an obligation to discharge only to do so through office account instead of client. Earlier and more radical suggestions that money on account of the firm’s own fees might be paid into office account rather than client were shelved some time ago.

We will continue to monitor these proposals, provide guidance on the new Handbook as soon as we are able and all of our materials will, of course, be updated to include references to the new rules.

Registers, Roll and Information Regulations

Other more controversial proposals from the SRA relate to the level of information that might be required from firms about their legal services and pricing. These provisions seem to have been inspired by a report by the Competition and Markets Authority (CMA) which was critical of the consumer information that is generally available on firms at present. Initially, this might be limited to information on specific services such as conveyancing, wills and probate but in due course the SRA might become obliged to publish more information about the firms it regulates, including complaints information.

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