Regulatory Structures of Approved Regulators

A. The Solicitors Regulatory Authority

i. Executive

As noted in the previous section, the regulation of solicitors is the province of the Solicitors Regulatory Authority (SRA).^[816] The SRA employs a Chief Executive, three executive directors, for Supervision, Authorisation, and Intelligence and Investigation, for Legal and Enforcement, and Post Enforcement and for Policy, Risk, Strategy, Communications, Standards and Researchand a Group Chief Operating Officer.

ii. The SRA Board

a. Membership

The General Regulations of the Law Society provide that the chair of the SRA Board (SRB) shall not be a Council member, but may be either a solicitor or a lay person. There are then no fewer than six, and no more than eight, lay, non-Council members. There are no fewer than five, and no more than seven, solicitor non-Council members. All members are appointed by the Council following an open recruitment process taking into account guidelines issued by the Commissioner for Public Appointments.

The current regulations provide that the number of lay members of the SRB (including the chair if he or she is not a solicitor) shall always be one more than the number of solicitor-members (including the chair if he or she is a solicitor).^[817]

These requirements were an early test of how the relationship between the LSB and professional bodies would work. There were originally nine solicitor and seven lay members of the SRB. In 2010 the LSB insisted that the Law Society achieve a lay majority, but the Law Society would only undertake to achieve this by 2013.

The LSB recently published the result of a consultation on lay chairs. It concluded that

[a]fter five years of experience, it is our view that amending the Internal Governance Rules to require lay chairs [of regulators] is a wholly rational route to embedding and strengthening independence in legal services regulation. Further, we believe that additional restructuring of the appointments and reappointments process is needed as a proportionate route to secure that independence.^[819]

b. Terms of Reference

The terms of reference of the SRB are defined by the Law Society’s General Regulations in relation to regulated individuals and entities, including, for example, solicitors, licensed bodies and registered foreign lawyers.^[820] In relation to such persons the SRA is able to exercise all powers and functions vested in the Law Society or the Council under the statutes defining its regulatory tasks, from the Solicitors Act 1974 onwards.^[821] These include monitoring, regulatory, investigative, adjudication, disci­plinary, intervention, enforcement, supervisory, admission, authorisation, licensing, civil litigation and cost recovery powers and functions.

The SRA’s terms of reference include consenting to LSB recommendations on regulatory arrangements and making applications relating to the delegated regula­tory functions. This does not include applications to regulate persons not presently regulated or to cease regulating persons or to changing the Society’s position as an approved regulator. They also provide for the SRA to deal with all matters relating to the setting of standards for entry into the profession and the education and training of solicitors, including monitoring of training institutions and those providing authorised courses.^[822]

c. Functions

The general functions of the SRA Board are defined in the General Regulations of the Law Society.

---- set the strategic objectives for the Society in its regulatory role, monitor performance against those objectives and prepare an operational plan and budget for presentation to the Business and Oversight Board;

---- take into account the recommendations of the Better Regulation Task Force in exercising its functions;

---- comply with such oversight and scrutiny arrangements as the Council shall lay down from time to time, following appropriate consultation with the Board;

---- ensure that the need to obtain value for money is recognised in all matters for which it is responsible;

---- ensure that the principles of equality and diversity are incorporated in every aspect of its work;

---- ensure that the principles of ‘Turnbull’ risk analysis are incorporated in every aspect of its work;

---- report to the Council when required by the Council to do so on the discharge of its functions, including (but without limitation) risk management and budgetary issues;

----- monitor expenditure against budget; and

---- monitor compliance with any external regulatory provisions or obligations which are applicable.^[823]

d. Committees

The SRA presides over a range of committees reflecting the main areas of regula­tory responsibility. These are Regulatory Risk, Education and Training, Finance and Resources and Standards. There are also two groups: Communications Group and Equality and Diversity Group.^[824] Each committee and group has a remit defined by terms of reference.

The Standards Committee has the remit of advising and acting on behalf of the Board on matters concerning the development of an effective regulatory standards framework. It keeps the regulatory framework under review and reports to the Board, proposing changes where necessary. It has responsibility for supporting the develop­ment of the SRA Handbook and for the use of the Code of Conduct by the profes­sion and the public.

The Regulatory Risk Committee has two broad areas within its remit: policy and quality assurance. In relation to policy, the committee advises the SRB on the deliv­ery of risk-based and outcomes-focused regulation in Authorisation, Supervision and Enforcement activity.

B. The Bar Standards Board

Like the SRA, the BSB was created in anticipation of the changes to be brought forward in the LSA 2007. The Constitution of the Bar Standards Board emphasises that it is the regulatory arm of the Bar Council with no separate legal personality.^[825] Staff in the BSB are organised into five departments: Professional Practice, Professional Conduct, Education and Training, Quality and Strategy and Communications.^[826] The Heads of these departments report to the Director of the BSB. Most departments have between five and ten members. An exception is the Professional Conduct department which has around 30 staff. These are mainly involved in investigation of complaints and preparing cases against barristers who have breached the Code of Conduct.

i. Membership

The Board of the BSB comprises a chair, vice chair, five barrister members and eight lay members. The BSB Constitution commits the BSB to establish an appointments panel to make appointments and to act in accordance with the ‘Nolan principles of public life’ in making appointments to all its internal committees.^[827] These principles are:

---- Selflessness - Holders of public office should act solely in terms of the public interest. They should not do so in order to gain financial or other benefits for themselves, their family or their friends.

---- Integrity - Holders of public office should not place themselves under any financial or other obligation to outside individuals or organisations that might seek to influence them in the performance of their official duties.

---- Objectivity - In carrying out public business, including making public appointments, awarding contracts, or recommending individuals for rewards and benefits, holders of public office should make choices on merit.

---- Accountability - Holders of public office are accountable for their decisions and actions to the public and must submit themselves to whatever scrutiny is appropriate to their office.

---- Openness - Holders of public office should be as open as possible about all the decisions and actions that they take. They should give reasons for their decisions and restrict information only when the wider public interest clearly demands.

---- Honesty - Holders of public office have a duty to declare any private interests relating to their public duties and to take steps to resolve any conflicts arising in a way that protects the public interest.

---- Leadership - Holders of public office should promote and support these principles by leadership and example.

ii. Functions

The BSB is responsible for performing all regulatory functions and for determin­ing what constitutes a regulatory function.^[828] Regulatory functions are set out in its Constitution under paragraph 11, which outlines the duties of the BSB. They are to:

---- supervise and monitor the work and conduct of its committees, disciplinary tribunals and any other panels;

---- ensure that equal opportunity and diversity issues are taken into account in respect of regulatory functions;

---- liaise with the Bar Council, the Inns’ Council, judges and other committees as appropriate;

---- prepare and keep under review a plan for the development and effective discharge of the regulatory functions of the Bar Council;

---- co-operate with the Bar Council over financial and other resources provided and comply with the relevant procedures and requirements of the Standing Orders of the Bar Council;

----- co-operate with the Bar Council in its monitoring of the BSB;

---- provide to the Bar Council all information and documents which it may reasonably request;

---- comply with reasonable requests for the chair of the Bar Council or his nominee to attend any BSB meetings; and

----- prepare an annual report to the Bar Council on its work for publication.^[829]

iii.

The BSB’s Constitution provides that it has power to do all things calculated to facili­tate, or incidental or conducive to, to the performance of its functions or duties.^[830] This includes regulating its own procedure, making rules and arrangements and estab­lishing and regulating committees, sub-committees and panels. It can delegate any of its functions to any committee, sub-committee, panel, working party or other person or body. It can make representations to or be consulted by anyone appearing relevant to its functions. Finally, it can notify the LSB where it considers that its independence or effectiveness is being prejudiced.

iv. Committees

The BSB runs eight regulatory committees. These are Education and Training, Equality and Diversity, Governance, Risk and Audit, Planning, Resources and Performance, Professional Conduct, Qualifications, Quality Assurance and Assessment. The committees make recommendations to the BSB, sometimes in the form of detailed pieces of work for approval. Most of the committees are advised by a number of sub­committees covering different areas of their remit. For example, the Education and Training Committee has three sub-committees covering the Bar Vocational Course, Pupillage and Continuing Professional Development.

XI.