Top City law firms have rejected ‘foolhardy’ proposals to change the conflict of interest rules put forward by the profession’s regulator, warning it against making ‘rushed changes’.

In a letter sent to the Solicitors Regulation Authority, the City of London Law Society (CoLLS) professional rules and regulation committee, which is composed of solicitors from all five magic circle firms as well as seven other prominent City and national firms, rejected all three models for conflict of interest rules put forward by the SRA. The models are contained in the regulator’s current consultation on a new SRA handbook.

The City firms said that solicitors are ‘naturally nervous’ about conflict rules, because of the risks of misapplying them, and warned that ‘a move to an outcome-focused approach [in relation to conflicts] which leaves greater scope for interpretation is not what the profession generally wants’.

The committee suggested that existing rules on conflicts should be retained.

The CoLLS has reversed its position on conflicts, having previously lobbied for a relaxation of the rules. The SRA had agreed to amend the rules to allow large City firms to act on both sides of a deal, with safeguards in place, but then shelved the plans following opposition from a number of senior general counsel.

The CoLLS committee said: ‘This is not the time for wholesale changes to the conflict rules. The current rules were introduced just four years ago, after six years of review and debate. We are concerned that the changes envisaged now are too rushed, but are happy to work with the SRA in trying to find a solution.’

Committee chair Chris Perrin, general counsel at magic circle firm Clifford Chance, said: ‘To rush in with a completely new approach to conflicts, without opening a debate on the matter, strikes us as foolhardy.’

In a separate letter to the SRA, the committee responded to wider aspects of the regulator’s handbook consultation.

It cited a ‘general concern’ that it might be ‘unfair’ to judge City firms on whether they have achieved particular outcomes under the SRA’s proposed new ‘outcomes-focused’ regulatory regime, because they are complex organisations. The committee said that the SRA seemed to be ‘heavily focused on traditional high street practices’, with very few examples given of the behaviour expected of large corporate firms.

The committee also cited concerns that, under its proposals for overseas practices, the SRA’s regime would overlap unnecessarily with foreign regulatory regimes.It said it agreed with the SRA’s approach to implementing alternative business structures, but warned that additional compliance burdens should not be imposed.