This approach is designed to apply the SRA’s entity based regulatory regime to European law firms in a proportionate way, depending on their form of practice in England and Wales. The new approach is also intended to clarify to the users of registered European lawyer (REL) firm services what protections and rights of redress exist.
The Junior Lawyers Division (JLD) represents a body of students, trainees and solicitors (up to 5 years PQE) across England and Wales. As such, the JLD has a vested interest in preserving the integrity of the legal profession and ensuring that England and Wales continues to be a jurisdiction of choice for both lawyers and their clients.
One question that is asked is whether respondents find the principle of permitting registered European lawyers to work in entities which are not required to be authorised acceptable. The JLD does not find this position acceptable and is concerned with the proposed creation of an “Exempt European Practice” (as loosely defined in the consultation).
It is not clear how the SRA will monitor the activities of Exempt European Practices to ensure that such entities are not practising activities reserved to authorised individuals and entities. While we would not suggest that any firm would breach their declaration knowingly, there is surely scope for unintentional breach and there is no information in the consultation which suggests the SRA will monitor this at all.
The creation of a two-tier system undermines one of the primary purposes of SRA regulation - that being the protection of clients. It is clear that the SRA has given thought to the consumer and their knowledge of rights, but we are worried that unfortunately this will not always work in practice. Clients have been - and should be - able to rely on the fact that certain protections apply when using law firms in England and Wales (such as indemnity insurance, compensation fund and accounts rules).
We are concerned that the points above could mean that the creation of an “Exempt European Practice” will harm the interests of the legal sector in England and Wales, and place clients into a vulnerable position.