Support for stronger safeguards tempered by concerns over costs and fairness
The Law Society of England and Wales has expressed support for the Solicitors Regulation Authority’s ambition to strengthen consumer protection, while warning that some proposed reforms may be impractical and risk unintended consequences.
In a statement published on 23 February 2026, the Law Society responded to the SRA’s latest consultation on protecting client money and enhancing compliance arrangements within law firms.
The regulator has been consulting since July 2024 on measures designed to reduce risks to client money and maintain public confidence in legal services. Its most recent consultation focuses on strengthening the accountants’ reports regime and reviewing the checks and balances provided by compliance officers.
The Law Society said it broadly supports proposals to improve the accountants’ reporting framework. In particular, it endorsed restoring the requirement for firms holding client money to submit annual accountants’ reports to the regulator. It also backed the introduction of mandatory annual declarations for firms currently exempt from filing such reports, as well as the routine use of bank confirmations by reporting accountants to verify client accounts.
Brett Dixon, Vice President of the Law Society, described these steps as “proportionate” measures that could enhance monitoring and protect clients, provided the SRA has sufficient resources and a clear plan for triage and follow-up.
However, the Society objected to proposals requiring the separation of compliance roles in certain firms. It argued that mandating structural separation between compliance officers would be complex and impractical, particularly for small and medium-sized practices. The Society warned that increased regulatory costs could ultimately be passed on to consumers and affect access to justice.
The response also raised concerns about the proposed use of fixed financial penalties for administrative failures. The Law Society suggested such measures could create delay and unfairly penalise firms for matters outside their control.
In addition, it highlighted evidence that some proposals could disproportionately affect Black, Asian, and minority ethnic solicitors, legal aid practitioners, and sole practitioners, with potential knock-on effects for the communities they serve.
The Law Society said it supports the SRA’s objective of improving client protection but urged the regulator to focus on better use of data to identify and manage risk rather than imposing structural requirements that may not be workable in smaller firms.
It confirmed that it would continue to engage with the SRA as the consultation process progresses.