Principles and risk-based regulation - Other regulated providers of legal services

Learning Outcomes

After studying this article, you will be able to explain the core principles and risk-based regulatory approaches applied to barristers, licensed conveyancers, and legal executives in England and Wales. You will understand the main regulatory bodies, their key duties and codes, the concept of entity regulation, and how risk-based supervision is implemented. You will also be able to compare these frameworks to those for solicitors and apply this knowledge to SQE1-style scenarios.

SQE1 Syllabus

For SQE1, you are required to understand the principles and risk-based regulation of other regulated providers of legal services. Focus your revision on:

  • the main regulatory bodies for barristers, licensed conveyancers, and legal executives
  • the core principles and duties imposed by each regulator
  • the concept and implications of entity regulation
  • the meaning and application of risk-based regulation and supervision
  • how these frameworks compare to those for solicitors.

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

  1. Which regulatory body oversees barristers in England and Wales?
  2. What is meant by 'entity regulation' in the context of legal services?
  3. Name two core principles that licensed conveyancers must follow.
  4. What is the main purpose of risk-based regulation?

Introduction

Legal services in England and Wales are regulated by several bodies, each responsible for different types of legal professionals. While solicitors are regulated by the Solicitors Regulation Authority (SRA), barristers, licensed conveyancers, and legal executives are overseen by their own regulators. All regulators set out core principles and use risk-based approaches to supervision and enforcement. Understanding these frameworks is essential for SQE1.

Regulatory Bodies and Their Principles

Barristers and the Bar Standards Board (BSB)

Barristers are regulated by the Bar Standards Board (BSB). The BSB sets out core duties for barristers, including acting with independence, honesty, and integrity, and upholding the administration of justice.

Key Term: Bar Standards Board (BSB)
The independent regulator for barristers in England and Wales, responsible for setting standards, authorising practice, and enforcing discipline.

Key Term: Core Duties (Barristers)
Fundamental obligations imposed on barristers, such as acting with independence, honesty, integrity, and in the best interests of each client.

Licensed Conveyancers and the Council for Licensed Conveyancers (CLC)

Licensed conveyancers are regulated by the Council for Licensed Conveyancers (CLC). The CLC's code requires conveyancers to act with independence and integrity, maintain high standards, and act in clients' best interests.

Key Term: Council for Licensed Conveyancers (CLC)
The statutory regulator for licensed conveyancers and probate practitioners, setting conduct rules and supervising compliance.

Key Term: Core Principles (CLC)
The main ethical and professional standards for licensed conveyancers, including independence, integrity, client care, and compliance with court duties.

Chartered Legal Executives and CILEx Regulation

Chartered legal executives are regulated by CILEx Regulation. Their code of conduct requires acting with honesty, integrity, independence, and in the best interests of clients, as well as maintaining competence and respecting diversity.

Key Term: CILEx Regulation
The independent regulator for chartered legal executives and CILEx-regulated entities, responsible for authorisation, conduct, and enforcement.

Key Term: Core Principles (Legal Executives)
The main duties for legal executives, including honesty, integrity, client care, competence, and equality.

Entity Regulation

Entity regulation means that not only individuals, but also legal practices (such as law firms or chambers), are subject to regulatory requirements. This approach recognises that firm-wide systems, culture, and supervision are essential for compliance.

Key Term: Entity Regulation
A regulatory approach where the organisation or firm, as well as individual lawyers, must meet regulatory standards and may be subject to supervision and enforcement.

Worked Example 1.1

A barrister is employed by a BSB-regulated entity (a barrister-only law firm). Who is responsible if a breach of the BSB Handbook occurs—just the individual barrister, or the entity as well?

Answer: Both the individual barrister and the BSB-regulated entity may be held responsible for breaches. Entity regulation means the firm must have systems to ensure compliance, and the individual must also follow the rules.

Risk-Based Regulation

Risk-based regulation is a strategy where regulators focus their resources and supervision on areas, firms, or individuals that pose the greatest risk to the public, clients, or the integrity of the legal system.

Key Term: Risk-Based Regulation
A regulatory approach where supervision, inspection, and enforcement are prioritised based on the likelihood and potential impact of risks to regulatory objectives.

How Risk-Based Regulation Works

Regulators assess risk by considering factors such as:

  • the type of work undertaken (e.g., high-value conveyancing, complex advocacy)
  • the firm's size, structure, and history of compliance
  • any complaints, disciplinary findings, or financial concerns

Firms or individuals assessed as higher risk may be subject to more frequent inspections, targeted supervision, or additional reporting requirements.

Worked Example 1.2

A licensed conveyancer's firm has recently expanded rapidly and now handles large sums of client money. The CLC identifies this as a risk factor. What action might the CLC take under risk-based regulation?

Answer: The CLC may increase the frequency of inspections, require additional reporting, or review the firm's systems for safeguarding client money, focusing resources on the higher risk.

Comparison with Solicitor Regulation

While the SRA, BSB, CLC, and CILEx Regulation all use principles-based and risk-based approaches, there are differences in codes, enforcement, and the scope of entity regulation. All regulators, however, require compliance with core duties such as independence, integrity, client care, and proper handling of client money.

Worked Example 1.3

A legal executive working in an SRA-regulated law firm is found to have breached CILEx Regulation's code. Can the SRA also take action?

Answer: Yes. When working in an SRA-regulated firm, the legal executive must comply with both CILEx Regulation and SRA requirements. Both regulators may investigate and take action if appropriate.

Summary

RegulatorWho They RegulateKey PrinciplesRisk-Based Regulation?Entity Regulation?
SRASolicitors, SRA firmsIndependence, integrity, client care, public trustYesYes
BSBBarristers, BSB entitiesIndependence, honesty, integrity, client careYesYes (for BSB entities)
CLCLicensed conveyancersIndependence, integrity, client care, court dutiesYesYes
CILEx RegulationLegal executives, CILEx entitiesHonesty, integrity, client care, competence, equalityYesYes

Key Point Checklist

This article has covered the following key knowledge points:

  • The main regulatory bodies for barristers, licensed conveyancers, and legal executives are the BSB, CLC, and CILEx Regulation.
  • Each regulator sets out core principles and duties, including independence, integrity, and client care.
  • Entity regulation means that firms, as well as individuals, must comply with regulatory standards.
  • Risk-based regulation focuses supervision and enforcement on higher-risk areas, firms, or individuals.
  • All regulated providers must maintain systems to ensure compliance and protect clients and the public.

Key Terms and Concepts

  • Bar Standards Board (BSB)
  • Core Duties (Barristers)
  • Council for Licensed Conveyancers (CLC)
  • Core Principles (CLC)
  • CILEx Regulation
  • Core Principles (Legal Executives)
  • Entity Regulation
  • Risk-Based Regulation
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Pleased to share that I have successfully passed the SQE1 exam on 1st attempt. With SQE2 exempted, I’m now one step closer to getting enrolled as a Solicitor of England and Wales! Would like to thank my seniors, colleagues, mentors and friends for all the support during this grueling journey. This is one of the most difficult bar exams in the world to undertake, especially alongside a full time job! So happy to help out any aspirant who may be reading this message! I had prepared from the University of Law SQE Manuals and the AI powered MCQ bank from PastPaperHero.

Saptarshi Chatterjee

Saptarshi Chatterjee

Senior Associate at Trilegal