The Solicitors Regulation Authority has revealed it has granted more than 1,300 regulatory waivers since 2015, as it heralds a new transparent approach to its decision-making.
The SRA confirmed last week it has granted 232 waivers from November 2017 to May 2018, compared with 585 in 2016/17 and 537 in 2015/16.
The regulator has previously only published information about waivers associated with the authorisation of alternative business structures: the new policy makes clear all waiver decisions will be published unless the firm can show why something should be redacted.
The vast majority of waivers have been to lift the requirement to submit accountants’ reports, which in many cases was considered to be disproportionate. Since 2015, the SRA has refused 20 applications for waivers, including four businesses that wanted to work outside of professional indemnity insurance requirements.
Critics have suggested the process previously lacked transparency and gave successful applicants an unfair advantage over competitors who have operated strictly according to the rules.
Now the waiver requests and reason for the decision are published in greater detail. As examples, non-trading entities have been allowed to continue without appointing compliance officers, in-house solicitors have been allowed to act for clients other than their employer, and solicitors with less than three years’ experience have been permitted to set up their own firm, where they could show they could reach a satisfactory level of competence.
New waivers limited to two years have also been allowed in cases where applicants took advantage of the so-called ‘safe space’ created by the SRA. These allow unregulated businesses to employ solicitors and offer unreserved legal services where it is considered in the public interest.
- Childcare provider Parental Choices Limited allowed to offer legal advice on employment law;
- Consumer group Which? Legal making it easier for members to get information and have direct access to solicitors;
- Business advisory service Hybrid Legal allowed to offer legal support to small and medium sized companies.
The SRA states that that successful applicants for short-term waivers have insurance ‘reasonably equivalent’ to existing requirements, and people using their services are informed about the protections available to them.
Law Society president Joe Egan said the new waivers policy is a 'great improvement on the previous opaque system’. He added: 'The more transparent approach being introduced reflects current best practice and should minimise competitive disadvantage for firms that have not applied for waivers. The Law Society will be scrutinising the detail of the new policy to ensure it safeguards robust consumer protections in the public interest.’