The Solicitors Regulation Authority (SRA) yesterday (12 April) announced plans to formalise its innovation ‘safe space’ – which allows firms to develop new ideas for business lines and products that could test regulatory boundaries – with the aim of fostering innovation within the legal industry.
The initiative seeks to simplify the existing waiver process from regulatory enforcement and make the criteria clearer for firms when applying for regulatory exemptions to pursue new business models.
The innovation space includes a process to guarantee a firm that the SRA will take no enforcement action if innovation bring the firm into technical breach of its rules, in an approach similar to the Financial Conduct Authority’s regulatory sandbox.
After consultation and feedback, the proposal will include safeguards for the consumer, and the SRA ensure that any waivers will be published to maintain transparency. The process will also involve publishing an annual innovation report to ensure decisions are made consistently.
The waivers will allow existing or new firms to apply for specific rules to be relaxed and trial new ideas without reprimand. However, they will only be granted if the applicant can demonstrate the plan is compatible with protecting and promoting the public interest, and that there is no alternative for them in achieving their aim.
The waivers already exist, but the SRA is hoping this new move will provide greater flexibility and improve access to legal services at reduced prices. The scheme will supplement the initiative SRA Innovate, which was launched in 2016 as a collection of resources to encourage firms to innovate.
Paul Philip, chief executive at the SRA, said: ‘We have trialled our proposed approach through our SRA Innovate initiative, which provides a safe space for firms to try new services, with good results. Changing how we manage and publish waivers will also help firms, while making sure that the public is protected.’
The SRA will be running events in Cambridge, Bristol and Newcastle for firms interested in the scheme.