1. The Regulatory Role of the SRA Flashcards
SRA Principles
The Principles require that those regulated by the SRA act:
1. in a way that upholds the constitutional principle of the rule of law, and the proper administration of justice;
2. in a way that upholds public trust and confidence in the solicitors’ profession and in legal services provided by authorised persons;
3. with independence;
4. with honesty;
5. with integrity;
6. in a way that encourages equality, diversity and inclusion;
7. in the best interests of each client.
Legal Services Board - Regulatory Objectives
s 1 Legal Services Act 2007
- protecting and promoting the public interest;
- supporting the constitutional principle of the rule of law;
- improving access to justice;
- protecting and promoting the interests of consumers;
- promoting competition in the provision of services in the legal sector;
- encouraging an independent, strong, diverse, and effective legal profession;
- increasing public understanding of citizens’ legal rights and duties;
- promoting and maintaining adherence to the professional principles of independence and integrity; proper standards of work; observing the best interests of the client and the duty to the court; and maintaining client confidentiality.
Risk-based Regulation
The SRA takes a risk-based approach to regulation - This means that in exercising its regulatory functions the SRA assesses the risk to the SRA achieving its regulatory objectives
Risk = A combination of the impact of a certain event occurring (the potential harm that could be caused) and the probability that the event will occur (the likelihood of the event occurring)
Examples of risks, arising from:
- the way a firm is structured and its viability;
- a firm or individual becoming involved in fraud or dishonesty;
- the people, systems and internal processes of a firm;
- individuals lacking the requisite skills, knowledge or behaviours;
- the way the legal market operates;
- factors, such as economic, political or legal change.
Firm-based Authorisation
Eligible businesses:
- Recognised sole practice
- Recognised body: Partnerships, LLPs, companies
- Licensed bodies: Alternative business structures
Firm-based authorisation
Effect of authorisation
Once authorised (and unless the SRA specifies otherwise) a recognised body is entitled
to carry on all reserved legal activities (except notarial activities)
The business of a recognised body is limited to:
(a) professional services of the sort provided by individuals practising as solicitors and/or lawyers of other jurisdictions; and
(b) other professional services set out in annex 2 of the Rules, for example alternative dispute resolution, estate agency and financial services.
It must at all times have an individual who is designated as its Compliance Officer for Legal Practice (COLP), and one who is designated as its Compliance Officer for Finance and Administration (COFA) and whom the SRA has approved.
Firm-based authorisation
The authorisation process
SRA key outcomes for authorisation process:
- clients and the general public remain confident that legal services provided by regulated firms will be delivered to the required standard;
- firms will be managed in such a way, and with appropriate systems and controls in place to promote public confidence in legal services;
- those who own and manage law firms have the competence, character and willingness to achieve the right outcomes for clients and third parties;
- only those individuals and firms who/that meet the SRA’s criteria for authorisation or approval (including the requirements to be suitable and capable of providing legal services to the required standard) are authorised or approved.
Authorisation of individuals
Governed by the SRA Authorisation of Individuals Regulations
Authorisation involves admission as a solicitor and obtaining a practising certificate.
These are the same requirements which must be satisfied for an individual to be able to act as a solicitor. Section 1 Solicitors Act 1974 states:
No person shall be qualified to act as a solicitor unless—
(a) he has been admitted as a solicitor, and
(b) his name is on the roll, and
(c) he has in force a certificate issued by the Society … authorising him to practise as a solicitor (in this Act referred to as a ‘practising certificate’).
Any person who does not comply with this section will fall within the definition of an ‘unqualified person’ (Solicitors Act 1974, s 87) and so cannot practise as a solicitor. Any person who practises as a solicitor without having a practising certificate will commit a criminal offence.
Authorisation of individuals
Admission
Admission simply means that an individual is accepted into the profession and their name
is placed on the list, or roll, of solicitors kept by the SRA
The SRA Assessment of Character and Suitability Rules set out the factors which the SRA will take into account in deciding whether an individual is suitable for admission.
According to Part 1 of the Rules, when considering an individual’s character and suitability under the Rules, the SRA will take into account the overriding need to protect the public and the public interest and maintain public trust and confidence in the solicitors’ profession and in legal services provided by ‘authorised persons
Part 2 of the Rules sets out the conduct and other behaviour that the SRA will consider when assessing an individual’s character and suitability, which fall into two main heads: criminal conduct and other conduct or behaviour.
Authorisation of individuals
Practising certificates
An admitted solicitor is eligible to apply to the SRA for a practising certificate if their name is on the roll, they have sufficient knowledge of written and spoken English or Welsh and they are not suspended from practice as a solicitor.
Subject to limited exceptions, the certificate then entitles a solicitor to carry on all ‘reserved legal activities’ (except notarial activities). In respect of rights of audience, however, although solicitors have rights of audience in all courts, a solicitor cannot exercise those rights in the higher courts (Crown Court, High Court, Court of Appeal and Supreme Court) until they have successfully completed, as appropriate, the Higher Courts (Civil Advocacy) Qualification or the Higher Courts (Criminal Advocacy) Qualification.
Solicitors working outside authorised firms
Freelance solicitors
In-house solicitors
Non-commercial organisations
Other organisations
Professional indemnity insurance
For solicitors, professional indemnity insurance covers civil claims made against a solicitor in the course of their practice, e.g. negligence
If a solicitor has been negligent in the conduct of a client’s case the insurer will pay the amount necessary to compensate the client for the loss suffered
- The insurance does not absolve the solicitor from liability; it merely provides a fund from which such liability can be met
The Rules set out the minimum terms and conditions for the insurance policy: minimum figure for the sum insured:
- For recognised and licensed bodies: The sum insured for any one claim (exclusive of defence costs) must be at least £3 million and at least £2 million in all other cases
SRA Indemnity insurance Rules
‘Adequate and appropriate insurance’ - Applies to SRA authorised firms, freelance solicitors, solicitors in non-commercial organisations
What constitutes adequate and appropriate insurance will vary
Client information - Solicitors must be open with their clients about their professional indemnity insurance provision.
