Monthly Archives: September 2015

Proposals for consumer credit regulation adopted by SRA Board

Solicitors should be able to carry out certain consumer credit activities under SRA authorisation as long as their activities are central to the legal services they provide, the SRA Board has agreed.

The Board approved the move at its meeting yesterday (Wednesday 9 September). It will ensure that firms do not also have to be regulated by the Financial Conduct Authority (FCA) and are not over-burdened with significant additional rules for consumer credit, and that their client protections remain in place.

Crispin Passmore, SRA Executive Director for Policy, said: “This is a positive step forward. Everyone at the SRA and Financial Conduct Authority has worked exceptionally hard to ensure that the proposals offer a balanced and proportionate approach to regulation for firms following the transfer of responsibility for regulating consumer credit from the Office of Fair Trading to the FCA.”

The SRA has been working with the FCA for over a year on the best way to approach its regulation of solicitors providing consumer credit services. This follows the transfer of the responsibility for regulating consumer credit work from the Office of Fair Trading to the FCA on 1 April 2014.

SRA guidance on carrying out consumer credit activities is set to be published in the autumn. Firms will need to read the guidance, in addition to new rules, when carrying out consumer credit work.

The SRA consulted on its proposals for consumer credit regulation between 26 June and 7 August 2015. The consultation can be viewed here:

The consumer credit approach will need to be approved by both the FCA and the Legal Services Board. If agreed, changes to the SRA Handbook will come into effect on 1 April 2016.

Raft of changes to cut red tape and open up the profession

A raft of changes that will further cut red tape and provide new ways of becoming a solicitor has been approved by the SRA Board.

The changes focus on eight separate areas of the Handbook. They will reduce duplication in administration for many, and improve regulation. The changes include:

  • simplifying compliance officer approval for small firms;
  • including an apprenticeship qualification under the Training Regulations;
  • operational changes and improvements for ABS authorisation; and
  • simplifying candidate declaration and notification processes.

Paul Philip, SRA Chief Executive, said: “Taken together these eight changes are a significant reduction in red tape and bureaucracy, marking a step forward in freeing up firms and individuals to do business. They support small firms which are often stretched for time and resource and they provide greater opportunity for a wider range of talented people than ever before to enter the profession.”

The changes agreed by the Board were part of a formal consultation between 16 April and 11 June this year.

The SRA received more than 100 responses to the consultation earlier this year. The proposals approved by the SRA Board were:

  • Simplify compliance officer approval for small firms (1-4 managers): Streamlining the application process for sole practices and small firms (and some medium firms) by removing the need for a stand-alone application for compliance officers.
  • Simplify candidate declaration and notification processes: Removing the need for candidates to sign a declaration separate to the applicant firm, and removes a requirement in the rules for us to notify each candidate of any decision separately, in writing
  • Revise the rules relating to reserved legal activities: Revising the rules to reflect the SRA’s view that firms apply for the entitlement to offer reserved legal activities, whether they choose to do so at any given point in time is a matter for them
  • ABS authorisation – operational changes and improvements: Removing the requirement for us to approve individual managers within ABS corporate owners, and removing the seven-day notification requirement for deemed approved manager or owner applications
  • Changes to insolvency rules: A minor change to the rules to fill in an existing gap – partnerships that have entered into administration are not currently covered by the regulations
  • Guidance on recording of non-material breaches: Providing further clarification and guidance on the current requirement
  • Recording and reporting of diversity data: Minor changes to be made to the Code of Conduct to reflect the above existing requirement more clearly
  • Enable qualification as a solicitor through an apprenticeship route: Making an addition to the Training Regulations to include the new apprenticeship route to qualification, which has recently been approved by BIS

These will now need Legal Services Board approval before being adopted as part of the SRA Handbook.

The consultation document can be found here:

New ADR rules delayed further


Under the EU directive on Alternative Dispute Resolution Regulations (ADR) which came into force on 9th July 2015, the Legal Ombudsman (LeO) had applied to become a certified entity under the directive. This would have meant that the Ombudsman’s scheme rules would have had to have been brought in line with the directive’s provisions, meaning changes to your client care letters, terms and conditions, website and complaints procedure.

LeO has now announced it has withdrawn its application to become an ADR entity, stating it wants further consultation to take place. The consultation will run from 7th September 2015 for eight weeks.

This means that the anticipated changes to client care letters, terms and conditions, website and complaints procedure necessary when LeO becomes an ADR body, should not yet be implemented.