Greater practising flexibility may be good news for solicitors but spells bad news for the public, consumer bodies have warned in the latest opposition to the Solicitors Regulation Authority’s proposed handbook reforms.
The Legal Ombudsman, in its response to the regulator’s consultation, said it was concerned about the impact of giving greater freedom to solicitors to deliver legal services outside regulated firms.
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In particular, the complaints body had concerns about the potential difficulties in determining its jurisdiction, the risks to consumers should the compensation fund and professional indemnity insurance requirements be removed, and the viability of the small claims court as an alterative route to redress.
The ombudsman said: ‘The proposals primarily create difficulty for us because our jurisdiction is over the authorised individual (solicitor) rather than the firm or anyone else who works there.’
It envisaged difficulties in understanding who has carried out the work for the consumer, whether this can be evidenced and whether it has powers to request evidence.
The proposals could create tension between the individual solicitor’s professional obligations and the way an unregulated firm may be run.
Redress alternatives highlighted in the consultation paper did not provide sufficient safeguards, it warned.
Consumer confidence in complaining about legal providers is lower than in other sectors, the ombudsman noted.
‘A significant proportion of those who are dissatisfied with the service they have received become "silent sufferers” and do not go on to make a complaint. We would be particularly worried about the proportion of silent sufferers increasing,’ it said.
Meanwhile the Legal Services Consumer Panel said it supported the drive for a more proportionate regulatory regime, but remained concerned about the risk of confusion around what protections are available.
The regulator’s proposed reforms of the accounts rules removed a fundamental protection for consumers who pay in advance for services or disbursements should a firm become insolvent, the panel said.
Instead of the money being automatically returned to them, those clients would become unsecured creditors.
The Law Society has already voiced its concerns over the proposals, warning that the reforms could result in a two-tier profession, with serious implications for client protection, legal professional privilege, professional supervision, competition and the standing of the solicitor profession.
SRA reforms could lead to more ‘silent sufferers’
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