The Board of the Solicitors Regulation Authority (SRA) has agreed it would regulate Chartered Institute of Legal Executives (CILEX) members, if CILEX decides to redelegate this to the SRA.
CILEX approached the SRA about this potential change in 2022. Last year, the SRA consulted on the arrangements it would introduce for the regulation of authorised CILEX members. Following a request from CILEX, it recently consulted on its approach to the potential regulation of non-authorised CILEX members, such as CILEX students and paralegals.
The SRA’s analysis is that there would be public interest benefits to it regulating all CILEX members. It would simplify the complex regulatory landscape, making it easier for consumers to navigate. It would bring more consistent standards and levels of protection.
Research done over many years shows that most members of the public have little knowledge of regulation in the legal sector, and when asked, find it confusing to understand and navigate. Their recent polling and focus groups have showed that the public would support steps that would make it simpler and more consistent:
- 80% support having similar standards for legal professionals regardless of whether they are a solicitor or CILEX lawyer.
- 90% support having similar protections for clients in the same area of law.
- 86% agree that one regulator covering both legal professionals is better than separate ones.
The proposed changes would also result in efficiencies, including reducing duplication for the 75% of CILEX members that already work in SRA regulated firms. If the SRA became responsible for the 20 CILEX regulated firms, it would represent only a 0.2% increase in the firms it regulates, meaning the day-to-day work of regulating CILEX members would be a very small increment.
Views among the profession are mixed, with support for the change as well as objections. If redelegation went ahead, the SRA would make sure that its rules, processes and communications would maintain the distinct identities of CILEX members and solicitors.
The SRA would also make sure the costs of regulating CILEX members would be fully recovered from their practising certificate fees, so there was no financial cross subsidy between solicitors and CILEX members. Anna Bradley, SRA Chair, said:
“Since CILEX approached us about this change, we have reflected long and hard on the potential risks and benefits. In making this decision we are conscious of the strong professional interests that are in play, but the key question for us has always been – is this in the public interest? All the evidence shows that consistency and relative simplicity in regulation matters to the users of legal service. This change would result in a simpler system, with more consistent levels of protection for consumers. There will also be efficiency benefits.
Most people find the current regulatory landscape bamboozling. This change won’t solve all the issues of complexity, but it would benefit the public.”
What’s more, The Law Society of England and Wales has repeatedly opposed this change, expressing concern that it would have a negative impact on consumers, the wider public interest and the regulatory objectives. Ian Jeffery, chief executive officer of the Law Society, said:
“We are deeply concerned that the SRA Board has given the go ahead to regulating CILEX members, despite its own regulated community, and CILEX’s members objecting to the idea of regulatory change, and the Legal Services Consumer Panel stating that the consumer case has not been made. For the last two years, the Law Society has advocated on behalf of our members opposing the proposal and raising concerns at the serious negative impact it will have on regulated communities, consumers of legal services and the wider public interest.
The change will cause consumer confusion, as it will be less clear which profession is which, and where different authorisations for practice areas apply. This is likely to be a particular problem for those with complex legal issues, or vulnerable consumers.
The SRA requires the Law Society’s approval for changes to the corporate objects of SRA Limited in order to be able to take on the regulation of CILEX members. The SRA has created the impression that this is no more than an administrative issue to be resolved. Instead, the Law Society has consistently said our consent cannot be assumed. This is a matter for the Law Society’s Council to decide at the appropriate time when any proposals are made and supported by a persuasive case for change.
We are concerned that the redelegation of CILEX’s regulatory functions to the SRA could adversely affect the SRA’s ability to meet its duty to regulate the solicitor profession in a way that supports and promotes the regulatory objectives. This is of particular concern in light of the collapses of Axiom Ince, Metamorph, Kingly and the SSB Group.”
If CILEX decides it would like to go ahead, a decision to redelegate would then need approval from the Legal Services Board.
