The Solicitors Regulation Authority plans to drop the much-criticised requirement for compliance officers to report all non-material breaches, an executive said today.

Samantha Barrass, director of supervision, risk and standards, told delegates at the Law Society's Risk and Compliance Annual Conference in London that the authority's current rules will be changed so that firms' records of non-material breaches will not need to be reported annually to the SRA.

The change is subject to consultation and approval by the SRA’s board.

Compliance officers for legal practice (COLPs) and finance and administration (COFAs) will still need to record non-material breaches however, in order to support the identification and management of patterns suggesting systemic risk issues.

The change to reporting requirements requires an amendment to the rules and will be consulted on as part of the next phase of the SRA’s Red Tape Initiative. The consultation will be published in April, ready for the necessary changes to come into effect in October.

Barrass said: ‘In light of extensive engagement with those we regulate and the increasing effectiveness of our risk centre, we have come to the conclusion that we can safely remove the requirement for recognised bodies to report non-material breaches.

‘We recognise that the requirement to record and report non-material breaches has not been popular with firms, many of whom have told us that this is a burden that is simply not proportionate to risks.’

She said the regulator’s main concern ‘is, and always has been, identifying patterns of non-material breaches, that combined may amount to a material breach because of the systemic underlying issues’.

Barrass also said the SRA will shortly be providing regular COLP/COFA alerts so they will be the first to know of any developments that may affect their role.

She noted that the frontline regulator's budget has been placed under pressure by the cost of interventions. A budget allocation of £1.3m to deal with interventions is already overspent, with the cost of two interventions alone reaching £1.8m.

If mismanaged, the cost to the profession of the failure of a firm of the size of Cobbetts could be in the region of £6m, she estimated.

Advice for COLPs and COFAs, including support for decision making on whether or not a breach is material, can be found on the SRA website.