The Solicitors Regulation Authority has ignored most respondents to its consultation on ceasing to regulate insolvency practitioners (IPs) and will press ahead with the plan.
The regulator yesterday approved proposals unveiled last year to relinquish responsibility for regulating the 129 IPs currently within its remit.
But it has emerged from the publication of consultation responses there was ‘significant strength of feeling’ against the proposals among most of those affected.
Just three of the 17 formal responses received were in favour, with the rest, including those from the Law Society, Insolvency Lawyers’ Association and the Sole Practitioners Group, opposed.
Opponents said the plans were made in the interests of the SRA rather than the public and they expressed concerns about regulation by another body – particularly one that regarded solicitors as competitors to accountants.
Other objections included the prospect of dual regulation, extra costs and a loss of influence for IPs who wanted to remain part of the solicitors’ profession.
The SRA said it had listened to practitioners’ concerns but that its regulatory regime was ‘out of step’ with the way in which IPs are regulated. Currently the SRA devotes both staff and resources to bespoke systems for regulating the 129 solicitor IPs.
The SRA said other regulators had shown a willingness to regulate solicitors and that if it continued to regulate IPs it would inevitably have to increase costs.
Crispin Passmore (pictured), SRA executive director, said: ‘Insolvency practice is not integral to the services provided by solicitors, so there is no case for us to regulate in this area. It’s also in the public’s interests for solicitors providing insolvency services to be regulated by the recognised professional bodies with specialist expertise in insolvency practice.’
Andrew Tate, deputy vice-president of IP trade body R3, the Association of Business Recovery Professionals, said: 'The legal profession is a very important part of the UK’s insolvency regime, and I am confident that the existing regulatory framework means other regulators are well-placed to provide ongoing monitoring, oversight, and licensing for lawyers within the insolvency profession.'
The SRA will now apply to the Legal Services Board to revoke the Insolvency Practice Rules 2012 and to amend the necessary regulatory arrangements. If it agrees with the proposal, the Insolvency Service will lay an order before the justice secretary for the Law Society’s Recognised Professional Body status to be removed.
The regulatory change should take effect from 1 November 2015.