LawNet comment on SRA pause to client account rule changes
LawNet welcomes the news that SRA has, for now, halted planned changes to client account regulations
Helen Hamilton-Shaw, chief executive of LawNet, said:
We welcome the SRA’s decision to pause its proposed changes to client accounts and instead focus on strengthening protections within the current client money framework. This reflects our call for a more proportionate and evidence-based approach to a highly complex issue, where rushed reforms would have risked unintended consequences for firms and consumers alike.
At LawNet, our network is an important voice for firms in the £2m-£25m turnover range, and our response to the consultation reflected the views of member firms employing more than 3,000 lawyers across England and Wales.
Their views, captured in our 180-page response made clear that while improvements in oversight and regulatory consistency may be needed, the core model of solicitors holding client money continues to offer a highly effective and low-cost mechanism for protecting consumer funds.
The Axiom Ince failure rightly triggered scrutiny, but the problems it exposed stemmed from breakdown in regulatory oversight, not from flaws in the client account model itself.
Certainly, within LawNet we see member firms consistently demonstrate a robust and professional approach to client money management, setting high standards for themselves that often go beyond regulatory requirements.
These are firms committed to our mandatory ISO 9001-based quality standard and client care excellence programme, and the additional scrutiny and operational discipline that brings, but their approach to client funds is, above all, indicative of consistent implementation of best practice.
It’s encouraging to see the SRA now acknowledge that any long-term change requires thorough exploration. It’s vital that the bigger structural questions around any alternative models for holding client money or funding the Compensation Fund are subject to rigorous analysis, credible modelling, and genuine engagement with the profession.
We hope this decision marks the start of a collaborative and informed regulatory dialogue on this matter. One that recognises the operational realities faced by firms, the proven strengths of the existing system, and the importance of maintaining proportionate, risk-based regulation in the interests of clients and the wider legal sector.
LawNet members are ready to contribute constructively to the next phase of discussions, bringing the voice of well-managed, medium-sized firms who are deeply invested in upholding trust in the profession.