In its annual performance assessment of legal industry regulators, the Legal Services Board says the SRA has fallen short of expected standards.
The super-regulator highlights the SRA's handling of the Axiom Ince collapse, and also calls out shortcomings with the SQE.
The SRA has come under fire from the Legal Services Board in a damning new assessment that questions the regulator’s ability to protect consumers and maintain trust in the profession.
In its annual performance report published on Monday, the LSB - which oversees all legal regulators in England and Wales - said the SRA had fallen short in key areas including authorisation, supervision and enforcement.
The findings mark a major escalation in scrutiny after the fallout from the high-profile collapse of Axiom Ince, which sent shockwaves through the industry.
Axiom Ince fallout continues
Following last year's equally damning independent review of the regulator's actions leading up to the closure of Axiom Ince, the LSB called out the SRA's handling of the now-defunct law firm, saying the review revealed failures in how it supervises high-risk firms and provides protection for client funds.
The watchdog also raised red flags over how the SRA board holds its senior executives to account, and said it had concerns over executives failing to provide the board with “timely or sufficient information on significant cases and emerging risks.”
Still no SQE provider data
The LSB also took aim at the SRA’s ongoing failure to publish provider-level pass rate data for the Solicitors Qualifying Examination (SQE).
Despite prior commitments, the LSB said that candidates are still in the dark about training provider performance - undermining informed decision-making in a critical phase of solicitor qualification.
The LSB now expects the data to be published no later than autumn 2025.
BSB also criticised
The Bar Standards Board also came under fire in the report.
The LSB flagged sluggish processing times, slow progress on reforms and concerns about whether senior leaders are being properly held to account.
Between them, the SRA and BSB regulate over 90% of legal professionals in England and Wales.
What’s next
The LSB launched formal enforcement action against the SRA last year, starting a process that could force changes to help the regulator better meet the objectives set out in the Legal Services Act 2007.
The SRA has launched a review of its approach to consumer protection and recently consulted on new proposals to safeguard client money - steps the LSB described as “positive engagement”.
The LSB said that both the SRA and BSB have recognised the need to improve.
What they said
Craig Westwood, chief executive of the LSB, said:
"This year’s assessment reveals some concerning shortfalls in regulatory performance, particularly from the two largest regulators.
"Effective regulation is essential to protecting the public and maintaining confidence in legal services. All regulators must address the issues that we’ve highlighted and must demonstrate more clearly how their activities benefit consumers. We will be working closely with regulators to ensure these improvements are made swiftly, and to ensure that our approach to assessing their performance remains targeted and proportionate.
"The mixed performance we have seen underscores the importance of robust oversight. We are committed to supporting all regulators to reach the standards the public and profession deserve."
Join 9,000+ City lawyers who start their day with our newsletter.
The essential read for commercially aware lawyers.
