SRA’s outcomes-focused regulations: overview
On 6 October, the Solicitors Regulation Authority implemented a new handbook, which replaced the Solicitors’ Code of Conduct 2007.
The idea behind the new handbook is to focus more on the outcomes of certain actions rather than use a rules-based approach. This is intended to tailor services to the needs of clients and to allow flexibility for firms to achieve the best outcomes for their clients.
The new handbook is available on the SRA website. The important points to note about the new outcomes-focused regulations and handbook are outlined below.
The handbook sets out ten Principles: the first six of these will be familiar, as they are based on the core duties in Rule 1 of the Solicitors’ Code of Conduct 2007:
- To uphold the rule of law and the proper administration of justice;
- To act with integrity;
- Not to allow your independence to be compromised;
- To act in the best interests of each client;
- To provide a proper standard of service;
- To behave in a way that maintains the trust the public places in you and in the provision of legal services.
The handbook also introduces four new Principles:
- To comply with your legal and regulatory obligations and deal with your regulators and ombudsmen in an open, timely and co-operative manner;
- To run your business or carry out your role in the business effectively and in accordance with proper governance and sound financial and risk management principles;
- To run your business or carry out our role in the business in a way that encourages equality of opportunity and respect for diversity;
- To protect client money and assets.
Each of the Principles is a standalone duty and each is mandatory. They apply to all solicitors, Registered European Lawyers (RELs), Registered Foreign Lawyers (RFLs), authorised bodies and their managers, and all employees in relation to a “practice from an office in England & Wales”.
Code of Conduct
Following on from the Principles is the Code of Conduct, which details how each Principle will apply in practice. Each chapter of the code contains outcomes that must be met to comply with the relevant Principle. These outcomes are again mandatory.
The chapters are as follows:
1. Client care;
2. Equality and diversity;
3. Conflicts of interest;
4. Confidentiality and disclosure;
5. Your client and the court;
6. Your client and introductions to third parties;
7. Management of your business;
9. Fee sharing and referrals;
10. You and your regulator;
11. Relations with third parties;
12. Separate businesses;
13. Application and waivers provisions.
Each of the outcomes have examples of indicative behaviours that may demonstrate whether or not the outcome has been achieved and thus the Principle has been complied with. These are not mandatory and are guidance only rather than an exhaustive list.
The handbook also sets out a new set of Accounts Rules, which replaces the Solicitors’ Accounts Rules 1998. The majority of the rules remain the same but there a couple of significant changes in relation to withdrawing client money, payment of interest, residual client account balances, using client money to provide banking facilities and in respect of designated deposit accounts.
Posted on Oct 14th, 2011 by Lyons Davidson