The board of the Solicitors Regulation Authority (SRA) last month backed the changes, which would allow solicitors to set up separate businesses providing unregulated services – so long as consumers are properly informed.
The current prohibitions in the code of conduct will now be removed and new outcomes introduced to protect consumers. The SRA has said the changes could be implemented as early as 1 November this year.
In the LSB’s decision notice, chief executive Richard Moriarty said the changes, which had been “consulted on and comprehensively reviewed by the SRA”, were consistent with the LSB’s objective of “breaking down regulatory barriers”.
Mr Moriarty went on: “The changes do present some risks to consumers. Those who receive services from separate businesses will not have the same protections as those using a regulated firm.
“For example, they are unlikely to have recourse to the Legal Ombudsman or the SRA’s Compensation Fund and their provider may not have professional indemnity cover.
“Therefore a notable risk is that consumers do not understand the possible implications of using a separate business.”
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