Comment
I hope readers will find time to read S.27 of the Legal Services Act - see below. It explains what 'independent' means in this context. The SRA is a delegate body of the Law Society and it is the parent body which would be fined by the LSB, for example, if the SRA fails to meet the high standards set out in the Act.
There is a good deal of confusion about the role of the SRA. Contrary to the explanation from some SRA staff, the SRA is not the approved regulator; it derives its powers from the Law Society who is the Approves Regulator.
Speaking as a member of the Law Society Council it has been very disappointing to see the progress the SRA has made in moving to become the world class regulator solicitors need. It has never been denied the resources it has requested to do the job.
My recollection is that the SRA Board's new chairman/woman is to be a member of the selection panel for the new Board along with two non-solicitors (one from OCPA) and only two elected representatives of the profession. Is the SRA really expressing concern that its own incoming Chair lacks independence from the profession and will not be independent when working to select members of the new Board? Would it have said the same about its present Chair? It will be a bit of an Alice in Wonderland conversation when the incoming chair criticises himself for his own lack of independence.
27 Regulatory and representative functions of approved regulators
(1) In this Act references to the “regulatory functions” of an approved regulator are to any functions the approved regulator has—
(a) under or in relation to its regulatory arrangements, or
(b) in connection with the making or alteration of those arrangements.
(2) In this Act references to the “representative functions” of an approved regulator are to any functions the approved regulator has in connection with the representation, or promotion, of the interests of persons regulated by it.
General duties of approved regulators
28 Approved regulator’s duty to promote the regulatory objectives etc
(1) In discharging its regulatory functions (whether in connection with a reserved legal activity or otherwise) an approved regulator must comply with the requirements of this section.
(2) The approved regulator must, so far as is reasonably practicable, act in a way—
(a) which is compatible with the regulatory objectives, and
(b) which the approved regulator considers most appropriate for the purpose of meeting those objectives.
(3) The approved regulator must have regard to—
(a) the principles under which regulatory activities should be transparent, accountable, proportionate, consistent and targeted only at cases in which action is needed, and
(b) any other principle appearing to it to represent the best regulatory practice.
Separation of regulatory and representative functions
29 Prohibition on the Board interfering with representative functions
(1) Nothing in this Act authorises the Board to exercise its functions in relation to any representative function of an approved regulator.
(2) But subsection (1) does not prevent the Board exercising its functions for the purpose of ensuring—
(a) that the exercise of an approved regulator’s regulatory functions is not prejudiced by its representative functions, or
(b) that decisions relating to the exercise of an approved regulator’s regulatory functions are, so far as reasonably practicable, taken independently from decisions relating to the exercise of its representative functions.
30 Rules relating to the exercise of regulatory functions
(1) The Board must make rules (“internal governance rules”) setting out requirements to be met by approved regulators for the purpose of ensuring—
(a) that the exercise of an approved regulator’s regulatory functions is not prejudiced by its representative functions, and
(b) that decisions relating to the exercise of an approved regulator’s regulatory functions are so far as reasonably practicable taken independently from decisions relating to the exercise of its representative functions.
(2) The internal governance rules must require each approved regulator to have in place arrangements which ensure—
(a) that the persons involved in the exercise of its regulatory functions are, in that capacity, able to make representations to, be consulted by and enter into communications with the Board, the Consumer Panel, the OLC and other approved regulators, and
(b) that the exercise by those persons of those powers is not prejudiced by the approved regulator’s representative functions and is, so far as reasonably practicable, independent from the exercise of those functions.
(3) The internal governance rules must also require each approved regulator—
(a) to take such steps as are reasonably practicable to ensure that it provides such resources as are reasonably required for or in connection with the exercise of its regulatory functions;
(b) to make such provision as is necessary to enable persons involved in the exercise of its regulatory functions to be able to notify the Board where they consider that their independence or effectiveness is being prejudiced.
