Solicitors should be under a duty to notify the Solicitors ­Regulation Authority when they get into financial difficulties, a report to the SRA board by accountants KPMG has recommended.

The report also proposes that there should be a new core duty on financial management as part of the solicitors’ rules.

KPMG is helping the SRA to assess the extent to which the financial stability of firms affects the public interest.

KPMG head of regulatory services Marcus Sephton noted that the number of interventions into firms has risen in recent years. Firms should have a duty to tell the SRA when they are at risk of becoming insolvent, but there should not be any capital adequacy requirements, he added.

An SRA spokesman said a consultation will follow. At present, firms are not obliged to notify the SRA until they actually become insolvent.