Consumer watchdogs have attacked the Solicitors Regulation Authority for changing its policy on freelance solicitors and leaving clients in the dark about what protection they can expect.
The Legal Services Consumer Panel said the regulator had reversed its decision to ensure all solicitors operating as freelancers under new rule changes would be required to have indemnity insurance.
In the SRA’s final submission to the Legal Services Board, which must approve any changes, this requirement is altered to affect just freelance solicitors offering reserved activities.
In a letter to the LSB, panel chair Sarah Chambers says such ‘patchy’ cover will lower consumer protection and exacerbate confusion. ‘There is simply no rationale for this inconsistent treatment of unreserved legal activities by solicitors depending on whether they undertake reserved activities,’ says Chambers.
‘We know that consumers have very little awareness of the difference between regulated and unregulated providers, let alone the varying protections that come with different service providers. It is therefore unrealistic to expect consumers to comprehend new permutations amongst solicitors, let alone the minute but potentially significant details around the varying protections that come with each type of solicitor.’
The panel echoes concerns raised earlier this month by the Law Society, which said the LSB should insist on insurance requirements for all freelance solicitors. The SRA may dismiss the profession’s concerns as protecting the status quo, but it is harder to use this defence against a group looking out for consumers’ interests.
Part of the rationale for changes is to widen access to justice to a greater number of people, so for a consumer watchdog to raise such concerns will be embarrassing for the SRA and provide food for thought for the LSB.
The consumer panel says even where freelance solicitors are required to have ‘adequate and appropriate’ PII, there is no definition or explanation what this actually means.
While Chambers accepted a loose description ties in with the wider pursuit of outcomes-focused regulation, the SRA had to accept and identify where prescriptive rules or guidance are needed.
‘It is the SRA’s duty as a regulator and enforcement authority to ensure that all solicitors have appropriate PII,’ adds Chambers. ‘Where there is failure on the providers’ part to secure adequate PII, and further failure by the SRA to detect and enforce its own rules, the consumer should not bear the risk.’
The LSB is currently considering the precise terms of the changes, which are due to come into force in November.