The Solicitors Regulation Authority (SRA) has launched a crucial consultation that could reshape how law firms handle client money, presenting a pivotal opportunity for ILFM members to influence the future of their industry.
Launched on 14 November 2024, this comprehensive consultation explores fundamental changes to client money management, compensation funds, and regulatory practices. It's not just another bureaucratic exercise – it's a chance for you to directly impact the professional landscape.
Key Areas of Consultation
The consultation delves into three critical areas:
- The Future of Client Money Management The SRA is questioning whether traditional client account practices are still fit for purpose in our digital age. They're exploring:
- Alternative methods of protecting client funds
- More stringent rules about holding and returning client money
- Potential time limits for retaining client funds after case completion
- Enhanced Protection Mechanisms Proposed changes aim to strengthen safeguards around client money, including:
- More robust checks and balances within law firms
- Stricter rules on transferring money between client and office accounts
- Improved accountability for compliance officers
- Compensation Fund Evolution The consultation considers potential changes to funding models, including:
- Adjusting contribution ratios between individual solicitors and firms
- Exploring risk-based contribution calculations
- Examining potential payment caps
Why Your Input Matters
The SRA is actively seeking professional insights. They're not just dictating changes – they're inviting a collaborative approach to regulatory reform. This consultation could fundamentally transform how client money is managed, potentially reducing risks and improving consumer protection.
Take Action
The consultation closes on 21 February 2025. This is your opportunity to:
- Share your professional experience
- Highlight potential practical challenges
- Suggest nuanced improvements
You can respond through the ILFM's survey here,via the SRA website or via their official channels. The ILFM will be collating all the feedback from our survey and presenting the results to the SRA directly as part of their consultation process. If your firm has already done or is planning to send a consultation response, please email us a copy so that we can consider & include it in our response. Responses are anonymous - any personal data (name & company) is for verification purposes only & will be removed.
Don't miss your chance to contribute. Your voice could make a significant difference.
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