It is clear from the first few weeks of the year that familiar themes will dominate the discussion around regulation in 2017.
Here are the regulatory issues set to dominate for the rest of the year:
1. New SRA Handbook: The Solicitors Regulation Authority consulted last year on a new regulatory framework including a fresh Code of Conduct. The Law Society was deeply unimpressed. Most controversial was the suggestion that solicitors could practise outside regulated law firms provided they did not provide any of the reserved legal activities regulated under the Legal Services Act 2007. Notwithstanding the views of the Law Society, the SRA gained the support of the Competition and Markets Authority in its final report on the legal services market at the end of 2016. Expect to see the SRA press ahead and consult on the detail of its proposals this year.
2. Independence: The uneasy relationship between the Law Society and the SRA over regulatory independence led for calls for a statutory separation of the SRA from the Law Society. Early last year the Ministry of Justice was poised to consult on such a proposal. However, Brexit and a change of government put paid to that and the consultation has not re-surfaced. Will it be published in 2017?
3. SRA fining powers: This is another longstanding issue. As matters presently stand, if the SRA considers that a regulatory breach by a firm or individual is more serious than a £2,000 fine, (except in the case of an alternative business structure) it needs to refer the matter to the Solicitors Disciplinary Tribunal as only it has the power to impose a more serious penalty. It is difficult to reconcile this with a modern entity-based regulatory framework. The SRA needs the flexibility to resolve matters quickly and firms need certainty as to outcome. This is a matter that would involve MoJ intervention but it is long overdue.
4. Brexit: By the end of the year some of the pieces of the Brexit jigsaw puzzle may have fallen into place. This is huge for the UK legal services market – the second-largest legal services market in the world, contributing £32bn to the UK economy. The market depends on access to the EU market and the free movement of lawyers across the EU. How this plays out will be the biggest issue for the legal services market in 2017 and beyond.
5. Standard of proof: Every professional regulator in the England and Wales except solicitors, barristers and vets adopts the civil standard of proof. The fact that the two largest branches of the legal profession are out of step was commented on by the Divisional Court in Solicitors Regulation Authority v Solicitors Disciplinary Tribunal  EWHC 2862 (Admin). Lord Justice Leveson stated: ‘I emphasise the observations of Leggatt J in relation to the standard of proof in these cases and underline the need for a re-evaluation of the approach to disciplinary measures intended to protect the public.’ The Solicitors Disciplinary Tribunal is due to start a review of its disciplinary rules and changes will need to be approved by the Legal Services Board. It is difficult to see how the criminal standard can be maintained for much longer.
6. Scams, scams and more scams: Towards the end of 2016 the SRA warned the profession and the public about the rise of fraudulent investment schemes involving solicitors. Whilst these were fashionable in the 1990s, they have now returned with vengeance. At the same time firms are also facing a rising tide of attempted frauds through bogus emails, identity thefts and the like. Expect to see the SRA drawing attention to successful prosecution of solicitors involved in schemes.
Iain Miller is a partner in Kingsley Napley’s regulatory department and is also general editor of Cordery on Legal Services