Regulation in the 21st Century

The Society recently consulted on two issues relating to regulation and consumer protection. The consultations are now closed. We are analysing the responses and will keep members and stakeholders informed of the decisions which follow.

1. Guarantee Fund / Client Protection Fund

Our consultation on the consumer fund available to clients who fall victim to the dishonesty of Scottish solicitors followed the completion of an independent review by KPMG earlier this year. 

We had already decided that from 1 November 2015, the operating name of the Scottish Solicitors’ Guarantee Fund will change to the ‘Client Protection Fund’.  This followed feedback from an independent review by KPMG earlier this year which suggest the current name was confusing and misleading, a conclusion also reached by Sheriff Principal Bowen in a separate review of consumer protection in conveyancing cases. We are also taking the opportunity to simplify the process for applying to the Fund, with a new application form and guidance. The change of name will not affect any solicitor’s dealings with the fund.

We consulted on other issues such as who should pay into the Fund and who should be able to make a claim. 

We also asked about whether there should there be new rules on capital adequacy and whistleblowing to try and prevent problems from arising.

 Regulation Consultation Guarantee Fund 2015 IMAGE

Read the full paper.

2. Entity Regulation

The current model of regulation, including professional practice and discipline, focuses on individual solicitors. 

In 2014, we consulted on the option of moving towards a hybrid system, with a greater focus on regulating legal firms or entities.  We also considered how our system of charging might need to change from any new approach through a new entity charge. We were grateful to those who took the time to feed in their views. 

We were grateful to those who took the time to feed in their views.  After considering that feedback, we concluded it was right to further explore what entity regulation might mean for the profession, the issues it may raise and what charging models should be considered.

In our latest consultation, we looked in more detail at the experience from the other jurisdictions that are using or are looking at using an entity based model.  We then asked more specific questions around a possible entity based system of regulation here in Scotland and ask about how it would work in practice.

Regulation Consultation Entity 2015 IMAGE

Read the full paper.

Earlier consultation material including charging

Our 2014 consultation paper on entity regulation is still available to view and includes information on the principles behind entity regulation.

Chapter 5 of that paper set out a possible charging model with a new entity charge based on turnover coupled with a reduced practising certificate fee for individual solicitors.

That paper also included specific worked examples depending on whether you work in house or in private practice and the turnover of your firm.

We will continue to develop our work around a charging model behind entity regulation and will consult separately on this at a later point.

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