Duncan Lewis

Shepherds Bush Office

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Immigrating , Family and Housing

SRA red tape initiative would allow not for profit agencies employing solicitors to charge their clients

Date: (3 April 2013)    |    

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Solicitor’s Regulatory Authority in its seventh version of the SRA Handbook has given Law Centres and not-for-profit sector more flexibility in as much as that these agencies employing solicitors now can charge clients.

The move coincides with the implementation of LASPO and cuts in legal aid which had previously accounted for up to half of many law centers’ incomes.

Until now the law centers and other organisations had to apply to the SRA for waivers to be able to charge, or set up community interests companies (CICs), an example would be Islington law centre in Rochdale which applied to the SRA for an ABS license for its CIC in November last year.

Steve Hynes, director of the Legal Action Group warned that whether law centers charged clients directly or through a CIC there was a limited market.

He said there was some scope for charging for immigration advice and for employment, though tribunal awards were often quite low. He noted that some law centres had decided to specialise in discrimination cases, where awards were higher.

However, he did not know of any not-for-profit agencies charging for advice in housing, welfare or family cases.

Even if law centers are allowed to charge fees from its clients the problem would be that the majority of its clients were on a very low income bracket and cannot afford to pay Hynes said.

Removing restrictions on charging were introduced as part of the SRA's red tape initiative.

Other changes brought in as part of the initiative include removing restrictions preventing in-house solicitors employed by local authorities from charging charities for legal services.

A second consultation on removing red tape will start later this month and report back in June. Any handbook changes resulting from this will be implemented on 1 October 2013.

The new handbook also introduces the ban on referral fees through two new mandatory outcomes, in chapters 6 and 9, which ensure that one is not paid prohibited referral fee and that one do not pay a prohibited referral fee.

The handbook's glossary defines prohibited referral fees, while 'indicative behaviours' illustrate how the outcomes can be achieved.