Anaya Nolan
The Solicitors Regulation Authority (SRA) is an independent regulator of solicitors in England and Wales. It was formed in January 2007 by the Legal Services Act 2007 as a Board of The Law Society, which remains the representative body for solicitors. The SRA sets out the high professional standards expected of the solicitors, lawyers, and businesses it regulates. It handles reported breaches in different ways, depending on their severity, and may open an investigation. The SRA has also introduced an outcomes-focused regime, moving away from a rules-based tick-box approach. This regime is designed to help law firms achieve the best outcomes for their clients by adopting business models suited to their specific situations.
| Characteristics | Values |
|---|---|
| Formation | The SRA was formed in January 2007 by the Legal Services Act 2007. |
| Function | The SRA is the independent regulator of solicitors in England and Wales. |
| Regulatory Approach | The SRA adopted an outcomes-focused regulatory approach in 2011, moving away from a rules-based tick-box approach. |
| Reporting Breaches | The SRA handles reported breaches in different ways, ranging from no action for minor breaches to investigations for more serious cases. |
| Enforcement Strategy | The SRA's enforcement strategy is underpinned by its Standards and Regulations, which set out the high professional standards expected of the solicitors, lawyers, and businesses it regulates. |
| Independence | While formally an arm of the Law Society, the SRA operates independently and is headed by non-lawyers. |
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What You'll Learn
The SRA's role as an independent regulator
The Solicitors Regulation Authority (SRA) is an independent regulator of solicitors in England and Wales. It was formed in January 2007 by the Legal Services Act 2007 as a Board of The Law Society, with the specific purpose of regulating and enforcing regulation independently of the Law Society. The SRA is headed by non-lawyers, which is an anomaly when compared to other common law jurisdictions.
The SRA has the important role of setting out high professional standards for solicitors, lawyers, and businesses, which are detailed in the SRA Standards and Regulations. These standards replaced the SRA Handbook in 2019, offering solicitors greater flexibility but requiring greater professional judgement to ensure compliance. The SRA's role is to enforce these standards and uphold the constitutional principle of the rule of law and the proper administration of justice.
In terms of enforcement, the SRA can handle reported breaches in different ways depending on the severity of the breach. Minor breaches that are unlikely to be repeated may not result in any action being taken. More serious cases will prompt an investigation, which may or may not lead to sanctions. The SRA may also resolve issues through guidance, supervision, and monitoring, particularly if the firm in question is cooperative.
The SRA also provides guidance for solicitors thinking about working outside of regulated law firms. For example, solicitors have a duty to report serious concerns or breaches of codes of conduct promptly, either to their firm's compliance officer for legal practice (COLP) or directly to the SRA if they feel their concerns will not be addressed by the COLP.
The SRA has faced some criticism for its handling of certain situations. In 2023, an investigation found that the SRA failed to act adequately in its investigation of Axiom Ince, a law firm that subsequently collapsed with a significant loss of jobs and client money. In the same year, the SRA was fined by the Solicitors Disciplinary Tribunal for bringing a speculative prosecution against a solicitor without a proper basis in law. Despite these incidents, the SRA continues to play a crucial role in regulating the legal profession in England and Wales.
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SRA Standards and Regulations
The Solicitors Regulation Authority (SRA) Standards and Regulations outline the high professional standards expected of solicitors, lawyers, and businesses under its regulation. The SRA, formed in January 2007 by the Legal Services Act, operates as an independent regulator of solicitors in England and Wales.
The SRA Standards and Regulations, which came into effect on 25 November 2019, replaced the previous SRA Handbook. This new framework is shorter and less prescriptive, offering solicitors greater flexibility. However, this increased flexibility necessitates more careful professional judgment from solicitors to ensure compliance with the SRA's standards. These standards are underpinned by the SRA's enforcement strategy, which includes handling reported breaches and conducting investigations into more serious cases.
The SRA's approach to regulation underwent a significant shift in 2011, moving away from a rules-based tick-box system to an outcomes-focused regime. This change aimed to empower law firms to achieve the best outcomes for their clients by adopting business models tailored to their specific situations. To facilitate this shift, the SRA introduced a new Handbook, creating a regulatory framework that accommodated these changes.
The SRA Standards and Regulations emphasize the duty of individuals and firms to promptly report serious concerns or breaches of the codes of conduct. This duty falls on individual solicitors, registered European or foreign lawyers, who should inform their firm's compliance officer for legal practice (COLP). The COLP then makes a professional judgment on whether to escalate the concern to the SRA. However, if the individual reporting the concern feels that the COLP's assessment is unsatisfactory, they have the prerogative to directly report the issue to the SRA.
The SRA's regulations also provide guidance for solicitors considering working outside a regulated law firm. Additionally, the SRA has outlined expectations for employers, such as ensuring that their employees' work is included in the firm's insurance policy, given the firm's vicarious liability for the actions of its employees.
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SRA's enforcement strategy
The Solicitors Regulation Authority (SRA) is an independent regulator of solicitors in England and Wales. It was formed in 2007 by the Legal Services Act 2007 to act as a regulator of solicitors, independent of the Law Society. The SRA Standards and Regulations set out the high professional standards expected of the solicitors, lawyers, and businesses it regulates. The SRA's enforcement strategy underpins these standards and regulations.
The SRA's enforcement strategy is focused on ensuring compliance with its standards and regulations and protecting consumers of legal services. The SRA can handle reported breaches in different ways, depending on the severity and likelihood of repetition. If a breach is minor and unlikely to be repeated, the SRA will not take any action. However, for more serious cases, the SRA will open an investigation. Even when an investigation is opened, there may not be any sanctions imposed. For example, the investigation could be closed with advice and a warning about future sanctions if the breach is repeated. The SRA may also resolve the issue by providing guidance, supervision, and monitoring to the firm.
The SRA's enforcement strategy also includes creating a regulatory framework to help law firms deliver the best outcomes for their clients. In 2011, the SRA moved from a rules-based approach to an outcomes-focused regime, creating a new Handbook to provide a framework for law firms to work within. This framework allows law firms to adapt their business models to their specific situations to deliver the best outcomes for their clients. The SRA's enforcement strategy also involves accepting applications for and awarding licences for Alternative Business Structures (ABSs), which allow law firms to adopt management models that move away from the traditional all-partner model.
The SRA's enforcement strategy is also concerned with ensuring that solicitors working outside of regulated law firms are following guidance. Solicitors offering legal services to the public from unregulated entities must report serious concerns or breaches of the codes of conduct promptly. Individual solicitors or registered European or foreign lawyers should report their concerns to their firm's compliance officer for legal practice (COLP), who will then make a professional judgment on whether to report the concerns to the SRA. If the solicitor or lawyer believes a report should be made to the SRA but is not satisfied that the COLP will take the same view, they should make the report themselves.
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SRA's response to serious concerns or breaches
The Solicitors Regulation Authority (SRA) is an independent regulator of solicitors in England and Wales. It was formed in January 2007 by the Legal Services Act 2007 as a Board of The Law Society, which remains the representative body for solicitors.
The SRA has a duty to uphold high professional standards and a code of conduct for solicitors, lawyers, and businesses under its purview. If an individual solicitor or a registered European or foreign lawyer has serious concerns or becomes aware of breaches of the codes of conduct, they must promptly report them. The first step is to inform the firm's compliance officer for legal practice (COLP), who will make a professional judgment on whether to escalate the issue to the SRA. However, if the reporting individual believes that a report should be made to the SRA but doubts that the COLP will agree, they can directly report their concerns to the SRA themselves.
The SRA can address reported breaches in various ways, depending on the severity and likelihood of repetition. For minor breaches, the SRA may choose not to take any action. In more serious cases, the SRA will initiate an investigation. Even during an investigation, there may not be any sanctions imposed. Instead, the SRA might close the investigation with advice and a warning to the firm about future sanctions if the breach recurs. The SRA encourages firms to cooperate with their processes, as this increases the likelihood of a resolution through supportive guidance, supervision, and monitoring.
The SRA's approach to regulation underwent a significant shift in 2011 when it transitioned from a rules-based tick-box system to an outcomes-focused regime. This change aimed to empower law firms to achieve the best outcomes for their clients by adopting business models tailored to their specific situations. The SRA introduced a new Handbook to provide a regulatory framework for this new approach. Despite initial challenges, the number of firms embracing the concept of outcomes-focused regulation has increased over time.
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SRA's role in the approval of new business structures
The Solicitors Regulation Authority (SRA) is an independent regulator of solicitors in England and Wales. The SRA was formed in January 2007 by the Legal Services Act 2007, which also introduced Alternative Business Structures (ABSs) as a way for law firms to be owned and managed by non-lawyers.
The SRA plays a crucial role in approving new business structures, specifically ABSs, which have enabled non-lawyer ownership of law firms. The SRA began accepting applications for ABS licences in January 2012, with the first licences awarded in March 2012. The process involves submitting an application form, typically FA1 for the main applicant body, and FA2 for individuals requiring SRA approval. The SRA may also require additional forms depending on the nature of the firm.
To obtain SRA approval for a new business structure, several requirements must be met. Firstly, the firm must have a lawyer at the Director level or equivalent, such as a member for an LLP or partner for a partnership. Secondly, the firm must provide a Professional Indemnity Insurance quote based on the SRA minimum terms. This insurance is crucial, and many potential firms struggle to obtain it due to the challenging insurance market.
Additionally, the SRA requires approval of key individuals within the firm, including the Beneficial Owner, Officer or Manager (BOOM), Compliance Officer for Legal Practice (COLP), Compliance Officer for Finance and Administration (COFA), and Money Laundering Compliance Officer or Reporting Officer (MLCO/MLRO). These individuals must be 'fit and proper' and suitable for their roles, and their CVs should be included in the business plan to facilitate SRA approval.
Furthermore, the SRA expects firms to demonstrate compliance with various regulations, such as anti-money laundering, GDPR, and the SRA Code of Conduct. Consultants specialising in SRA authorisation can guide firms through the process, ensuring they meet the minimum SRA requirements and helping to draft compliance systems and application documents. Overall, the SRA's role in approving new business structures involves ensuring firms meet the necessary regulatory standards, have appropriate individuals in key roles, and can demonstrate compliance with relevant laws and ethical guidelines.
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