It appears that as a profession, we are sleepwalking towards another problem.

On 24 November the Gazette ran an article which made reference to the issue of consumer credit regulation. After 1 April 2015, firms will only be able to continue consumer credit work under an exemption, provided they are overseen by a designated professional body (DPB).

The Solicitors Regulation Authority would be the DPB, but if the SRA withdraws from regulating as a DPB - and this is a clear possibility - then firms would either have to apply for authorisation from the Financial Conduct Authority or stop providing such services.

The article said that ‘at least 1,100 law firms are potentially affected’. I take the view that all law firms are likely to be affected, due to the inclusion in the latest Law Society practice note concerning ‘staged fees’. This states that: ‘Any form of financial accommodation (including time to pay) will amount to regulated activity, however the arrangement will be regarded as an exempt agreement if all the following conditions apply.’

The conditions are that the number of repayments does not exceed four, that the payment term does not exceed 12 months and the credit is provided without interest or other charges. All of the conditions need to apply.

Therefore, if a bill is sent to a client and that client asks to pay by six instalments, then that arrangement becomes a regulated activity. The firm that agreed would, in time, need to be regulated by the FCA (unless the SRA steps in as a DPB).

Are we potentially heading towards dual regulation, having to be regulated by the SRA and the FCA?

It is reasonable for a client to ask for time to pay and it is reasonable for a solicitor to agree to a reasonable time frame for payment. If we can only provide time to pay in limited circumstances unless we are potentially regulated by the FCA, then what are we supposed to do? Is this in the public interest?

Tim Wilson, Hughes Parry Solicitors, Holywell, Flintshire