The Law Society has urged the Solicitors Regulation Authority not to give up regulating solicitor insolvency practitioners.
Chancery Lane said giving practitioners the option of being regulated by another body could create additional costs and burdens for all involved.
In its response to an SRA consultation on the issue, the Society said most solicitor IPs do not want to be regulated by an accountancy regulator.
‘While this might seem a somewhat emotive view, solicitor IPs practise through their profession,’ said the response. ‘They are not accountants and do not feel it is proportionate or appropriate to be regulated as accountants for a portion of their practice.’
The SRA currently regulates 124 solicitors as insolvency practitioners; around 20 take insolvency appointments.
The Society said solicitor IPs provide a unique set of skills and provide clients with a choice beyond that available from an accountant IP.
The prospect of dual regulation, it added, could increase costs for consumers or force solicitors to stop undertaking this work altogether.
The response also predicted potential problems for the legal profession in respect of the increase in firms in financial difficulties and the SRA’s own preference that firms enter an insolvency process.
It added: ‘The SRA has asked the Law Society to consider how it could increase the number of IPs who specialise in this field; it would therefore seem counterproductive to make changes that potentially shrink the pool of expertise for which there is increasing demand in this area.’
The SRA has stated that its proposal follows discussions with the Insolvency Service and will allow solicitor IPs to seek regulation from the industry body most appropriate to them.
Annette Lovell, director of regulatory policy, said: ‘Our focus is on delivering regulation proportionate to the nature of a firm or individual, the services provided and the risks presented. The regulatory regime for insolvency practice is developing to meet a different set of risks and concerns.’