These new provisions, replacing the SRA Handbook 2011, come into force on 25 November 2019. The two new Codes of Conduct, a six-page one for Firms and an eight-page one for Solicitors, RELs and RFLs, are shorter than the current 42 page version, and the Accounts Rules are seven pages instead of 80. There are many points of detail to be considered, but space permits mention of only a few.
The provisions and guidance can be found on a beta site at https://beta.sra.org.uk/but note that at the time of going to press the HTML version of the Code for Solicitors, RELs and RFLs predates the enhanced reporting amendments and paragraph 7 is therefore incomplete (ending at paragraph 7.12). Paragraph 7 of the pdf version runs to 7.19: http://bit.ly/SRACodeAm. The Code does not apply to unqualified employees, unlike the current Code.
The new Principles, reduced from ten to seven, include a requirement for honesty, in response to the various decisions in which some courts have had difficulty distinguishing it from integrity but still a curious provision given the requirements of the general law. They apply to all members of the firm.
New guidance on client care letters should prompt firms to review their documentation; they should also read the UK Governments’ guide for business on how to help their customers better understand their contractual terms and privacy policies. See Contractual terms and privacy policies: how to improve consumer understanding(link on www.legalrisk.co.uk/news.)
Accounts procedures must also be revised if they are to remain compliant, particularly in relation to treatment of disbursements. Firms will also need to keep and maintain records to demonstrate compliance.
New forms of practice are permitted -(a) freelance solicitors and (b) solicitors delivering non-reserved legal activities through unregulated entities. The Law Society has issued practice notes on each –see www.legalrisk.co.uk/news.
Freelance solicitors may conduct reserved legal activities subject to a number of conditions, including ‘adequate and appropriate’ insurance (on which there is as yet no guidance), they cannot employ staff (but can use a serviced office or chambers-style mode of practice) and may not hold client money (subject to provisions relating to disbursements).
Some currently SRA-regulated firms may consider whether they could convert to delivering services through unregulated entities but they will not be able to undertake re-served legal activities and would need to purchase run-off insurance for their existing practice. There are also other regulatory hurdles to consider, including anti-money laundering and financial services regulation. For some, depending on the circumstances, switching regulator may be an alternative to explore.
There are various changes on publicity and transparency. These include provision of additional information when practising in the new ways outlined above. The ban on unsolicited approaches currently applies only by telephone or in person, but under the new Codes would appear to apply also to social media, email and even leaflet drops.
The requirement for individuals and firms to inform clients of mistakes is of some concern as unlike the current provisions they no longer seem to be expressly limited to current clients. This could be problematic.
The bar on limiting liability below the compulsory insurance level remains, but has been moved to the SRA Indemnity Insurance Rules, at paragraph 3.2.‹ Back to Publications