'Tesco law' ABS regime set to be pushed back to end of year

Outside ownership of law firms looks set to be delayed until the end of the year, with the Solicitors Regulation Authority (SRA) confirming that it will not be able to start licensing Alternative Business Structures (ABSs) by 6 October as initially planned.

The SRA has been informed by the Ministry of Justice (MoJ) that necessary parliamentary processes will not be completed in time for the October date, with the required primary legislation yet to be debated in parliament.

The introduction of ABSs now looks unlikely to happen before the end of the year, with the SRA expressing disappointment about the delay.

“We were on track to license ABS from 6 October, so it is disappointing to learn that we will not be able to do so,” said SRA chief executive Antony Townsend (pictured). “We will work with the MoJ to do all we can to speed up the process. But we are in the hands of the parliamentary timetable.

“It seems unlikely that we will be able to license ABS much before the end of the year, and we shall make further announcements as soon as we have more certainty.”

The hold-up comes as a result of delays in getting the process through Parliament, which needs to approve the appeals process before allowing the SRA to start licensing ABSs, while provisions must also be made to enable the SRA to check spent convictions of potential owners of law firms.

The SRA said: “We have received a letter from the Ministry of Justice advising us that the Parliamentary process will not be complete to enable the SRA to regulate ABS by 6 October. This is due to discussions with the MoJ to finalise the regulatory appeal process for ABS, and provisions to enable the SRA to check spent convictions of potential owners.”

“We will continue to work with the MoJ to ensure the necessary processes for the SRA to become a designated licensing authority for ABS are completed as soon as possible.”

However, the introduction of outcomes-focused regulation (OFR), including the new Code of Conduct for solicitors and other legal services providers regulated by the SRA, will go ahead as scheduled on 6 October. The new regime will see the SRA move away from prescriptive rules-based regulation to the more risk-driven approach of OFR.