On 21 January 2021, in what the SRA referred to as a “clamp down”, they announced they had already disciplined nine law firms for not adhering to rules on transparency. It appears this clamp down is still ongoing as the SRA recently wrote to around 8,000 UK law firms asking them to formally declare they are compliant with the transparency rules. While the declaration process itself is very quick (around ten minutes), these had to be completed by the close of play on 27 August 2020. This may have caught some firms out, especially where compliance officers were on annual leave during the summer holidays.
What are the SRA’s Transparency Rules?
Following a review by the Competition and Markets Authority (CMA) in 2016 into the legal profession, the CMA found, amongst other things, that consumers were not given enough information (including pricing and services) to decide who to instruct. As a result, the SRA’s Transparency Rules were introduced in December 2018. The main purpose of the rules is to ensure that the public and businesses have access to up-to-date and relevant information about solicitors and law firms when making decisions on engaging their services. Not only was this intended to improve transparency, but it was also supposed to make the legal market more competitive.
The transparency rules require that firms with a website publish information regarding:
- Costs for individuals including conveyancing, probate, immigration applications, appealing immigration decisions, magistrates representation for road traffic offences, and employment tribunal claims.
- Costs for businesses including unfair or wrongful dismissal representation, debt recovery, and advice and assistance and representation in relation to licensing applications for business premises.
- Complaints handling procedures.
- SRA number and SRA digital badge.
There are other transparency rules in addition to those for law firm websites, including SRA regulation wording on emails and letterheads.
Since January 2021, the SRA has been actively checking the websites of law firms to ensure they are in compliance and issuing warnings to those falling short of the need to comply with the rules. Paul Philip, the SRA’s Chief Executive, stated at the time, “People need good information to make good choices. Our rules mean that firms must publish detail on price and service for key areas of legal work, and on the protections available for consumers, helping people to find the help they need…We have provided support for firms to get this right and we will continue to do so. However, I want to be clear that where firms are not providing the type of information that the public expect and our rules mandate, we will take enforcement action”.
The SRA also say that since the introduction of the transparency rules, there is a growing proportion of prospective clients who believe that solicitors are now more affordable and that law firms have seen business benefits in increasing their levels of price transparency.
What will happen if law firms do not comply with the transparency rules declaration requirements?
There is no explicit guidance on the sanctions which will be issued, if any, in the event of non-compliance or not declaring in time, but previous actions by the SRA may act as a guide. Firms found to have breached transparency rules earlier this year received a rebuke and fines of £1,000 to £2,000. In addition, according to the Law Gazette, 13 firms who failed to make SRA declarations in time in relation to anti-money laundering compliance were fined this summer, however, in all cases, they had waited over a year to declare.
The SRA’s Transparency Rules are not particularly onerous or time consuming for solicitors and law firms. Those without a website just need to ensure that they have the information available and up-to-date in the event that it is requested by a prospective client. If you are unsure if you have met the requirements of the SRA’s Transparency Rules, speak to one of our team who will be able to advise you. Likewise, if you have been unable to send your declaration in time, for whatever reason, it is advisable to seek legal advice from a specialist in SRA/SDT matters in order to avoid a rebuke, fine, or other sanction.
We have been helping solicitors and other legal professionals with disciplinary and regulatory advice for 25 years. If you have any questions relating to an SRA investigation or an SDT appearance, please call us on 0151 909 2380 or complete our Free Online Enquiry.