New SRA Code will result in two tiers of Solicitors

Chief executive Catherine Dixon said: “The SRA proposals will enable solicitors to work for unregulated entities providing unreserved legal activities to the public. This has serious implications for client protection, legal professional privilege, professional supervision, competition and the standing of the solicitor profession.

“The proposals could result in two tiers of solicitors – those working in a regulated entity and  those who are not – with different rules and protections applying to clients depending on where the solicitor is working.

“Advice from solicitors in unregulated entities may not be legally privileged, which means that the ability of the client to be candid with their solicitor without the risk that this information will be shared, may be lost. If part of the solicitor profession is unable to give legally privileged advice, this is a slippery slope which could erode legal privilege, a cornerstone of the justice system, and undermine the standing of the solicitor profession both at home and abroad.

“Also, solicitors working in unregulated entities may not be required to have professional indemnity insurance and may not be subject to the same conflict rules. Their clients may not have access to the compensation fund or the Legal Ombudsman.

“We are concerned that this will put clients at risk as they simply won’t know what protection they are getting when they instruct a solicitor.

“Changes to supervision requirements would mean that newly qualified solicitors with no experience would be able to set up their own unregulated firms. Newly qualified solicitors generally welcome the support and guidance from more experienced solicitors. If that’s not available it could place clients at risk as well as risking the standing of the solicitor profession.

“Also because the regulatory burden on solicitors working in regulated entities will be higher than on those who are not, this could result in unfair competition between providers of legal services which is not in the public interest.”

The SRA ‘s consultation Looking to the Future closes on 21st September. Implementation in Spring 2017

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