The Solicitors Regulation Authority has hinted that it will reform its compliance officer scheme – just 20 months after the roles were introduced.
In a speech this morning, the regulator’s chief executive Paul Philip said the review of the COLPs and COFAs regime will form part of the ongoing ‘radical overhaul’ of the regulation of legal services.
Since January 2013 all regulated firms have had to install approved compliance officers for finance and administration, and for legal practice.
Philip told the Westminster Legal Policy Forum he wants to ‘look at whether this framework is really required for such businesses, or whether it’s overkill’.
Philip’s predecessor, Antony Townsend, had been a vocal advocate of the COLP and COFA system, which requires firms to nominate officers who in turn report any issues over compliance.
Townsend had previously hailed the new approach as making firms ‘less likely to succumb to poor behaviours and practices’ and reduce the chances of an intervention.
Philip said the review will dovetail with ongoing inquiries into the separate business rule, the complex process for approving alternative business structures, and the minimum terms and conditions for professional indemnity insurance.
He added: ‘I don’t think we should just be thinking about what this might look like in five or 10 years time. We should be looking at what we can do more immediately to support businesses and reduce costs.’
Philip said legal regulation still had ‘significant flaws’ despite the Legal Services Act 2007, including too much detail in primary legislation hampering regulators and the multiple number of regulators.
He also criticised the ‘wholly outdated’ idea of regulating on the basis of six reserved activities which have been accumulated in a ‘piecemeal fashion and which have never been subject to an objective, evidence-based review’.
Philip also predicted a ‘new dawn’ in the relationship between the regulator and representative body The Law Society.
‘I am not going to let the odd difference of opinion get in the way of us working, either with the marketplace or the representative body,’ he said.