The Legal Ombudsman has warned that consumers will be frustrated by plans to allow solicitors to work for unregulated firms.
The complaints-handler says the Solicitors Regulation Authority proposals will lead to uncertainty for clients about where to bring complaints and the possibility they will lose access to redress.
The regulator wants to open the market up to greater competition and innovation, but the ombudsman says there will be a lack of clarity about its jurisdiction and consumers could face weaker protection as a result.
In its response to the SRA consultation, which closed yesterday, the ombudsman said: ‘The proposals will complicate the system of redress and create confusion for consumer and service providers.’
Problems are likely to arise because the LeO jurisdiction will only extend to the individual solicitor rather than firm or company they work in.
‘We envision difficulties in understanding who has actually undertaken work for the consumer, whether this can be evidenced, and whether we have powers to request evidence.’
The ombudsman also doubts that decisions will always be enforced against individual solicitors as they will have to pay for redress or case fees.
The organisation warns it will have to ‘carefully pick’ which elements of a case can be investigated, and is also concerned about the tensions between the professional obligations of the individual solicitor and the unregulated firm.
The response explained: ‘Within an unregulated firm a solicitor (beginning an instruction with a client) would be under an obligation to conduct conflict of interest checks at the beginning of an instruction.
‘However, another unregulated employee would not be under an obligation to conduct checks.’
The Law Society, which has been a vocal critic of the SRA plans, made a final plea yesterday to scrap the proposals and said the regulator had not done enough to make a convincing case for reform.
The representative body said the rule change will lead to little if any economic benefit whilst potentially weakening protections such as legal professional privilege and rules governing conflict of interest.
A report commissioned by the Society said: ‘If these proposals reduce public trust in the solicitor profession then this could increase unmet legal need as people may be less willing to seek legal advice. It could also reduce the significant contribution solicitors make to the economy and jobs.
‘Any decrease in trust in UK solicitors will also have a negative impact on the international competitiveness of the industry, and in the efficient domestic use of law.’