THE Solicitors Regulation Authority (SRA) has decided cease regulating solicitors who act as insolvency practitioners despite opposition from the profession.
A consultation was held on SRA regulation of solicitor insolvency practitioners in November last year in which IPs were opposed to the plans. There are currently 129 solicitors operating as insolvency practitioners.
According to the SRA, the decision was taken because insolvency work is not central to the work of a solicitor, and consumers would be better protected if solicitors were regulated by those organisations identified by the Insolvency Service.
Crispin Passmore, SRA executive director, said: “Insolvency practice is not integral to the services provided by solicitors, so there is no case for us to regulate in this area. It’s also in the public’s interests for solicitors providing insolvency services to be regulated by the recognised professional bodies with specialist expertise in insolvency practice.”
The SRA will now apply to the Legal Services Board (LSB) to revoke the Insolvency Practice Rules 2012 and to amend the necessary regulatory arrangements. If it agrees with the proposal, the Insolvency Service will lay an order before the Secretary of State for the Law Society’s Recognised Professional Body status to be removed.
The regulatory change should take effect from 1 November 2015.
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