Question of ethics archive

Important: The guidance below was written and issued before the introduction of the SRA Handbook on 6 October 2011, and may refer to regulatory material that is no longer in effect. Although it may still be relevant, this guidance has not been rewritten in light of the wide-ranging regulatory changes implemented on 6 October 2011. Accordingly, it has been archived.

April 2010

Information about outcomes-focused regulation

Q. I have read in the legal press that the SRA will be introducing 'outcomes- focused regulation'. Where can I find more information about this?

Outcomes-focused regulation ('OFR') is a risk-based regulatory regime which will replace the Solicitors' Code of Conduct 2007 in October 2011 and will be based on core principles and outcomes which firms will be expected to achieve.

We will be using this page to keep the profession informed of progress both in respect of OFR and the introduction of alternative business structures (also due in October 2011), starting with a consultation on the proposed new rules which is due out in May. This will be your opportunity to comment on the proposed new rules and we would strongly urge you to respond to the consultation.

In the meantime, we are proposing to hold a number of free roadshows around England and Wales with the aim of helping you to understand OFR and the impact it will have on your practice.

Left-over client balances

Q. We have been investigating the procedure for applying to the SRA for permission to withdraw leftover client balances from the client account when clients can no longer be traced. If permission is given, what would happen if the client were to reappear?

You will remain liable in conduct to repay the monies to the client. Failure to repay the monies could have implications both in conduct and at law. For this reason, it is advisable to pay the monies to a charity which is prepared to give you an indemnity should the client reappear.

For information on how to make an application to the SRA, including a flowchart and the application form itself, see However, bear in mind that if the amount in question is £50 or less per client, it is not necessary to obtain prior authorisation from the SRA provided you can comply with the conditions listed in rule 22(2A) of the Solicitors' Accounts Rules 1998 and pay the balances to a charity.

Requirement for an Equality and Diversity policy

Q. I read recently that every firm must have a policy in respect of equality and diversity. What exactly is required and is there a model procedure we can use?

Rule 6.03 of the Solicitors' Code of Conduct (2007) requires you to adopt and implement an appropriate policy aimed at preventing discrimination and promoting equality and diversity within your firm, and dealing with any instances of discrimination which arise.

The policy must be made available to anyone (including the SRA) on request and you must ensure that everyone in your firm is aware of the policy and acts in accordance with it.

The rule is not prescriptive as to what form the policy should take. What will be suitable for one firm will not necessarily be suitable for another. For this reason, the Code does not include a model policy. However, guidance note 22 to rule 6 sets out the core requirements which must be included and makes it clear that to be appropriate, the policy must be in writing.