Call for Pro Bono Rules Exemption
Written By - Channon Sharples - November 24,2014
LawWorks has called on financial watchdogs to exempt pro bono work from consumer credit regulations, the Gazette has learned.
The request comes after the solicitors pro bono group called a halt to its debt advisory work for vulnerable consumers, amid continuing uncertainty over the regulatory landscape.
Last month the Solicitors Regulation Authority opened a consultation on withdrawing from regulating consumer credit work. Current arrangements expire on 1 April next year.
Interim arrangements were put in place when responsibility for consumer credit passed from the Office of Fair Trading (OFT) to the Financial Conduct Authority on 1 April 2014. Under the OFT regime, solicitors were regulated under a group licence given to the Law Society and managed by the SRA.
However, the FCA has not continued with the group licence facility.
According to the SRA, after 1 April 2015 firms would be able to continue consumer credit work under an exemption allowing them to carry on regulated financial activities, provided they are overseen by a designated professional body (DPB). However, this would require the SRA to adopt parts of the FCA’s sourcebook, which the SRA says would not fit with its own regime.
If the SRA withdraws from regulating as a DPB, firms would either have to apply for authorisation from the FCA or stop providing such services.
The SRA’s consultation closes on 15 December. At least 1,100 law firms are potentially affected.
LawWorks told the Gazette it is now in talks with the FCA to explore the potential for a waiver or exemption to cover pro bono advice being delivered across the LawWorks’ clinics network.
A number of long-standing, free debt advice services for vulnerable consumers are currently on hold due to the removal of the group licensing regime. ‘LawWorks is eager to find a solution so that these valuable pro bono services can be reinstated as soon as possible,’ the organisation said.