New SRA Code of Conduct goes live on 6th October 2011
The new SRA approach to regulation is known as OFR or outcomes focussed regulation. It has been published in time for it to apply to both traditional forms of practice and the new style Alternative Business Structures.
The guide, which is available online at www.sra.org.uk/quickgide, begins with the 10 ‘Mandatory Principles’ which underpin all of the handbook requirements. The new approach firmly places responsibility for meeting the requirements in the Handbook on the solicitor. Much of the SRA Code of Conduct has been stripped out, to allow more flexibility in achieving the right outcomes for the client. It is also said that the SRA approach to authorisation, supervision and enforcement will now be ‘risk based’, proportionate and targeted and will involve a more open and constructive relationship between the SRA and those who are regulated.
The Ten Principles are similar to the core duties contained in rule 1 of the current code of conduct, but there are some new ones. The new code looks for mandatory outcomes and non mandatory indicative behaviours.
Differences between the old and new approach are
· Client Care. More flexibility is now permitted for example agreeing an appropriate level of service with the client, with more emphasis on vulnerable clients.
· Equality and Diversity is now elevated to the status of a Principle where the outcome is that a culture of opportunity and diversity are encouraged.
· Conflicts of interests. There are is now more emphasis on having systems and controls to enable conflicts to be identified.
· Managing your business is also elevated to a status with a view to minimising risk. This is seen as one of the main new areas of risk following numerous high profile insolvencies, and emerging business models with the new ABS regime.
· Reporting requirements: It is now a Principle that there must be co-operation with regulators and ombudsmen, including engaging with the SRA in an open and constructive manner to enable a proportionate response by the SRA.
Assistance is also given to deal with risk and compliance, by a checklist of questions, set to ensure effective compliance arrangements, adopting many examples of best practice taken from the business world. It is clear that compliance is no longer a task that needs to be seen as a hurdle that has been passed and then put on the ‘back burner’, rather principles of continual assessment and review are now required to ensure compliance in a changing world.
The management of risks is given particular emphasis, with guidance as to monitoring, review, staff training and steps to be taken to mitigate those risks. Many commentators feel that the increased obligations of the new regime, taken on at the same time as difficulties with legal aid reductions, indemnity insurance increases, new competition from new entrants in the market, may represent the final straw that forces solicitors to abandon private practice in these difficult times.
Originally posted 2011-06-27 00:00:00.
