Risk-based regulation

The following Practice Compliance practice note provides comprehensive and up to date legal information covering:

  • Risk-based regulation
  • SRA’s regulatory focus
  • Defining risk
  • SRA's approach to risk
  • Risk and the regulatory objectives
  • Risk Outlook
  • Risk and the SRA's operational functions
  • Authorisation
  • Supervision
  • Enforcement
  • More...

Risk-based regulation

The Solicitors Regulation Authority (SRA) cannot police compliance by every solicitor and firm against every regulatory requirement at all times. A risk-based approach to regulation allows it to ensure its regulatory activities are prioritised and its (finite) resources are targeted proportionately.

SRA’s regulatory focus

The SRA’s regulatory focus is on high professional standards of competence, skill and integrity in the delivery of legal services to:

  1. benefit and protect people who use legal services

  2. support the proper administration of justice and the operation of the rule of law

To achieve this, it takes a risk-based approach, ie targeted at the areas that pose the greatest risk to the SRA achieving its regulatory objectives—see below: SRA’s approach to risk.

Defining risk

There are two components to the definition of risk:

  1. the impact of a certain event occurring

  2. the probability that the event will occur

For any particular risk, the SRA can calculate a risk score using the formula risk = impact × probability

This allows it to compare risks and prioritise the allocation of its resources according to risk priorities.

SRA's approach to risk

Risk and the regulatory objectives

The SRA is measured by the Legal Services Board on its performance in delivering the following regulatory objectives:

  1. protecting and promoting the public interest

  2. supporting the constitutional principle of the rule of law

  3. improving access to justice

  4. protecting and promoting the interests

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