Legal Services Regulation in 2017 – 5 things to watch

9 January 2017

It is customary at this time of year to make predictions.  I suspect, given what happened in 2016, that would end in tears.  Instead, I offer 5 issues to look out for during the course of the year.  A sort of legal services regulatory bingo.  Let’s see at the end of the year as to how many cropped up.

  1. New SRA Handbook. The SRA consulted last year on a new regulatory framework including a new Code of Conduct.  The Law Society in particular was deeply unimpressed.  Most controversial was the suggestion that solicitors could practice as solicitors in unauthorised entities provided they did not provide any of the reserved legal activities which are regulated under the Legal Services Act 2007.  However, notwithstanding the views of the Law Society, the SRA gained the support of the Competition and Markets Authority in its final report on the legal services market at the end of 2016 (“the CMA Report”).  Expect to see the SRA press ahead and consult on the detail of its proposals this year.
  1. Independence.  The uneasy relationship between the Law Society and the SRA over regulatory independence has led for calls for a statutory separation of the SRA from the Law Society.  Early last year the Ministry of Justice was poised to consult on such a proposal.  However, Brexit and a change of government put pay to that and the consultation has not re-surfaced.  Will it be published in 2017 particularly as it seems to be supported by the CMA Report?
  1. SRA Fining Powers.  This is another long standing issue.  As matters presently stand if the SRA considers that a regulatory breach by a firm or individual is more serious than a £2000 fine, (except in the case of an ABS) it needs to refer the matter to the Solicitors Disciplinary Tribunal as only it has the power to impose a more serious penalty.   It is difficult to reconcile this with a modern entity based regulatory framework.  The SRA needs the flexibility to resolve matters quickly and firms need certainty as to outcome.  Again this is a matter that would involve Ministry of Justice intervention but it is long overdue.
  1. Brexit.  By the end of the year some of the pieces of the Brexit jigsaw puzzle may have fallen into place.  This is huge for the UK legal services market which is the second largest legal services market in the world and contributes £32 billion to the UK economy.  The market depends on access to the EU market and the free movement of lawyers across the EU.  How this plays out will be the biggest issue for the legal services market in 2017 and beyond.
  1. Standard of Proof.  Every professional regulator in the England and Wales except solicitors, barristers and vets adopts the civil standard of proof.  The fact that the two largest branches of the legal profession are out of step with the prevailing climate was commented on by the Divisional Court in Solicitors Regulation Authority v Solicitors Disciplinary Tribunal [2016] EWHC 2862 (Admin).  Lord Justice Leveson stated: “I emphasise the observations of Leggatt J in relation to the standard of proof in these cases and underline the need for a re-evaluation of the approach to disciplinary measures intended to protect the public”.  The Solicitors Disciplinary Tribunal is due to start a review of its disciplinary rules and the new rules will need to be approved by the Legal Services Board.   It is difficult to see how the criminal standard can be maintained for much longer.

Share insightLinkedIn Twitter Facebook Email to a friend Print

Email this page to a friend

We welcome views and opinions about the issues raised in this blog. Should you require specific advice in relation to personal circumstances, please use the form on the contact page.

Leave a comment

You may also be interested in:

Skip to content Home About Us Insights Services Contact Accessibility