Principles and risk-based regulation - Reserved legal activi...

Learning Outcomes

This article outlines reserved legal activities under the Legal Services Act 2007, the SRA Principles, and risk-based regulation, including:

• The six reserved legal activities and their scope
• Application of the SRA Principles to reserved activities
• The concept of risk-based regulation in legal services
• Consequences of unauthorised practice
• Authorisation requirements and exemptions
• Approved regulators for different professions
• Risk-based rationale for reserving certain activities
• Practical issues in litigation: delegation, supervision, and duties to the court
• Application of concepts to SQE1-style scenarios

SQE1 Syllabus

For SQE1, you are required to understand the regulation of legal services, the scope of reserved legal activities, and the ethical and practical implications of the SRA Principles and risk-based regulation, with a focus on the following syllabus points:

• the definition and scope of reserved legal activities under the Legal Services Act 2007
• the authorisation and exemption requirements for carrying out reserved legal activities
• the SRA Principles and their application to reserved activities
• the meaning and purpose of risk-based regulation in legal services
• the consequences of unauthorised practice and the importance of ethical compliance
• the role of the Legal Services Board and approved regulators, including regulatory objectives and oversight
• practical issues around delegation and supervision when reserved activities are undertaken in firms

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 activities are classified as reserved legal activities under the Legal Services Act 2007?
2. What is the effect of carrying out a reserved legal activity without authorisation?
3. Name three of the SRA Principles and explain how they apply to reserved activities.
4. What is meant by risk-based regulation in the context of legal services?

Introduction

Reserved legal activities are specific types of legal work that, by law, can only be performed by authorised or exempt persons. These activities are central to the regulation of legal services in England and Wales and are designed to protect the public, uphold the rule of law, and maintain professional standards. The Solicitors Regulation Authority (SRA) Principles set out the core ethical duties that solicitors must follow, especially when engaging in reserved activities. Risk-based regulation is the approach used by regulators to focus their resources on the areas of greatest risk to the public and the profession.

The policy logic is both historical and risk-driven: activities most likely to affect access to justice, the proper administration of justice, and clients’ property or rights are restricted to those subject to regulatory standards and disciplines. Under the Legal Services Act 2007 (LSA 2007), regulation is overseen by the Legal Services Board (LSB), whose statutory regulatory objectives include protecting and promoting the public interest, supporting the rule of law, improving access to justice, protecting consumers, promoting competition, encouraging an independent, strong, diverse and effective legal profession, increasing public understanding of legal rights and duties, and maintaining adherence to professional principles (integrity, proper standards, duty to the court, best interests of the client, confidentiality). Approved regulators (such as the SRA and Bar Standards Board) must act compatibly with those objectives.

Key Term: reserved legal activity
A legal activity that only authorised or exempt persons may carry out, as defined in the Legal Services Act 2007.

Reserved Legal Activities: Definition and Scope

The Legal Services Act 2007 defines six reserved legal activities. Only authorised persons (or those exempt) may carry out these activities for the public or a section of the public. Carrying out a reserved activity without authorisation is a criminal offence and may also amount to misconduct.

The six reserved legal activities are:

1. Exercise of a right of audience – appearing before and addressing a court, including calling and examining witnesses. The precise scope of an advocate’s audience rights depends on professional authorisation and, for solicitors, any higher rights qualifications. Judges may grant a right of audience in a specific case (see exemptions, below), but courts are cautious about granting rights to untrained, paid representatives due to fairness and standards concerns.
2. Conduct of litigation – issuing proceedings, commencing, prosecuting or defending cases, and performing formal steps in litigation. Courts have interpreted “ancillary functions” in this context narrowly to mean formal steps required by procedure (e.g. entering an appearance). Activities such as general correspondence or giving advice are not, by themselves, the conduct of litigation, but practical traps arise when non-authorised persons take or control formal procedural steps. For example, laying an information to commence a private prosecution has been held to be “commencing proceedings”, so only an authorised or exempt person can do so.
3. Reserved instrument activities – preparing or lodging certain legal documents (instruments) dealing with the transfer or charge of land, and submitting applications/documents for registration under the Land Registration Act 2002, or other instruments relating to real or personal estate, or instruments relating to court proceedings. Key exclusions include wills and other testamentary instruments, agreements not intended to be executed as deeds, powers of attorney, and stock transfers with no trust or limitation.
4. Probate activities – preparing papers to obtain a grant of probate or letters of administration, or to oppose such a grant. The administration of estates generally is not reserved; reservation covers the court-facing papers to found or oppose the grant.
5. Notarial activities – authenticating and certifying documents and performing activities historically carried on by notaries. Only notaries regulated by the Faculty Office may provide these activities.
6. Administration of oaths – administering oaths and statutory declarations (e.g. acting as a commissioner for oaths).

Key Term: authorised person
An individual or entity authorised by an approved regulator to carry out one or more reserved legal activities.

Key Term: exempt person
A person permitted by law to carry out a reserved legal activity without formal authorisation, such as a litigant in person or someone granted a right of audience by a court in a specific case.

Reserved activities are restricted because the risks—misuse of court processes, impact on fundamental rights and property, and the need for procedural compliance—are significant. Courts will scrutinise steps taken by unauthorised persons and may declare them ineffective or penalise misuse through wasted costs.

Relevant illustrations of scope include:

• A private prosecutor’s unlawful commencement of proceedings due to the information being laid by an unauthorised person led a court to hold the prosecution itself unlawful. By contrast, where parties themselves filed divorce documents generated by an unregulated “facilitator”, the court held that the facilitator had not conducted litigation because formal filing was done by the parties.
• For barristers without authorisation to conduct litigation, signing statements of truth or engaging in advocacy is not of itself “conducting litigation” where the procedural rules permit such acts by legal representatives; however, controlling formal steps like issuing processes or serving proceedings would be.

Worked Example 1.1

A paralegal working for a law firm drafts and submits a claim form to the County Court on behalf of a client, without supervision from an authorised solicitor. Is this permitted?

Answer:
No. Issuing proceedings is a reserved legal activity (conduct of litigation). Only an authorised person or an exempt person may do this. The paralegal is neither, so this is unauthorised practice and may be a criminal offence.

Authorisation and Exemptions

To carry out reserved legal activities, a person or entity must be authorised by an approved regulator (such as the SRA for solicitors, the Bar Standards Board for barristers, or other regulators for specific professions). Some exemptions exist, for example for litigants in person, McKenzie Friends (with court permission), or employees acting under supervision.

Key Term: approved regulator
A body designated under the Legal Services Act 2007 to authorise and regulate persons carrying out reserved legal activities.

Key Term: unauthorised practice
Carrying out a reserved legal activity without authorisation or exemption, which is a criminal offence and may result in regulatory action.

Approved regulators are linked to particular professions and reserved activities:

• SRA (for solicitors and firms) can authorise the exercise of a right of audience, conduct of litigation, reserved instrument activities, probate activities, and administration of oaths.
• Bar Standards Board (for barristers) can authorise rights of audience and, subject to rules, conduct of litigation.
• CILEx Regulation (for chartered legal executives) can authorise most reserved activities except notarial.
• Council for Licensed Conveyancers (for licensed conveyancers) can authorise reserved instrument activities, probate, and administration of oaths.
• Intellectual Property Regulation Board (for patent and trade mark attorneys) can authorise advocacy and litigation rights in certain contexts, but not probate or notarial activities.
• Costs Lawyers Standards Board (for costs lawyers) can authorise rights of audience, conduct of litigation, and administering oaths.
• Faculty Office (for notaries) can authorise notarial activities and certain other reserved activities excluding rights of audience and conduct of litigation.
• Institute of Chartered Accountants in England and Wales can authorise chartered accountants for probate activities.

Authorisation attaches to both individuals and entities; an authorised firm must be appropriately authorised for the activities it undertakes, and individuals must act within the scope of their authorisation and the firm’s authorisation. There is regulatory overlap where, for example, a barrister works in a firm authorised by the SRA—each is regulated by their own approved regulator.

Exemptions under the LSA 2007 include:

• Rights of audience granted by a court in a specific case (e.g. a McKenzie Friend where permitted), or under particular enactments.
• Litigants in person conducting their own case.
• Employees carrying out certain reserved instrument or probate activities under supervision by an authorised person. Note that there is no general exemption allowing non-authorised employees to perform formal litigation steps; caution is needed to ensure that formal acts (issuing, serving, acknowledging service) are done by an authorised person or properly within the firm’s authorisation.
• Acting without fee, gain, or reward in relation to some reserved instrument and probate tasks.

It is a criminal offence under s 14 LSA 2007 to carry on a reserved legal activity if neither authorised nor exempt. The offence is punishable by up to two years’ imprisonment. In addition, in the context of rights of audience and conduct of litigation, acting when not entitled can amount to contempt of court, leading to sanctions including imprisonment. Courts may also disallow or set aside steps taken and issue wasted costs orders against those responsible, including unregulated businesses that conduct litigation.

Beyond the LSA framework, some providers are regulated separately for defined work: claims management companies (now regulated by the Financial Conduct Authority), immigration advisers (Office of the Immigration Services Commissioner), and insolvency practitioners (Insolvency Practitioners Association). Unregulated providers still supply non-reserved legal services (for example, will-writing and general advice), and many have qualifications and adopt voluntary codes, but they are not subject to the statutory regulation that accompanies reserved activities.

Worked Example 1.2

A will-writing company offers to prepare and submit probate applications for clients, but none of its staff are authorised persons. Is this allowed?

Answer:
No. Preparing papers to obtain a grant of probate is a reserved legal activity. Only authorised or exempt persons may do this. The company is acting unlawfully.

Worked Example 1.3

A litigant in person asks a legally trained friend to address the court on their behalf at a hearing. The friend is not authorised. Can the friend speak?

Answer:
Only if the court grants a right of audience for that specific hearing. A litigant in person may conduct their own case, but a non-authorised friend needs the court’s permission. Courts will consider fairness, the nature of the case, and whether the friend is charging for services.

Worked Example 1.4

A trainee in a conveyancing department prepares a transfer and lodges an application to register a charge at HM Land Registry. The trainee is not individually authorised. Is this permitted?

Answer:
Yes, if done under appropriate supervision within an authorised entity. Reserved instrument activities may be carried out by employees under supervision of an authorised person. However, the firm must be authorised and the supervisor must ensure competence and compliance.

Worked Example 1.5

An unregulated claims company drafts and files a defence for a client and serves it on the claimant’s solicitors. No authorised litigator is involved. Is this acceptable?

Answer:
No. Filing a statement of case and serving it as part of formal procedural steps constitutes conduct of litigation. An unauthorised company cannot do this. Courts may penalise unfair or improper conduct by issuing wasted costs orders or otherwise sanction the conduct.

The SRA Principles

The SRA Principles are mandatory ethical standards that apply to all solicitors and SRA-regulated firms. They underpin all aspects of legal practice, especially reserved activities.

Key Term: SRA Principles
The core ethical duties set by the SRA, requiring solicitors to act with integrity, independence, honesty, and in the best interests of clients and the public.

The seven SRA Principles are:

1. Act in a way that upholds the constitutional principle of the rule of law and the proper administration of justice.
2. Act in a way that upholds public trust and confidence in the solicitors’ profession and in legal services provided by authorised persons.
3. Act with independence.
4. Act with honesty.
5. Act with integrity.
6. Act in a way that encourages equality, diversity and inclusion.
7. Act in the best interests of each client.

These Principles apply to all legal work, but are especially important when carrying out reserved activities, which often involve the courts, client money, or significant public interest. Practical applications include:

• In litigation and advocacy, duties to the court (Principle 1) take precedence over client instructions where they conflict. A solicitor must not mislead the court or interfere with justice (e.g. tipping off a client to frustrate lawful searches).
• Independence (Principle 3) requires resisting pressures from clients, third parties, or funders where those pressures compromise professional judgment, particularly in court-facing work.
• Honesty and integrity (Principles 4 and 5) demand transparency in procedural compliance, accurate representations of status and authorisations, and avoidance of any “masquerading” as authorised when not entitled.
• Public trust and confidence (Principle 2) is engaged by all reserved activities, especially litigation and conveyancing, given the risks to others. Conduct that undermines trust (e.g. discriminatory behaviour, offensive communications, or poor control of client money) risks regulatory action.
• Best interests (Principle 7) require competent, timely steps within the scope of authorisation. Competence includes ensuring that formal litigation steps are taken properly by authorised individuals, and that supervised employees are adequately trained.

Regulatory enforcement is consistent with a risk-based approach. The SRA applies an Assessment Threshold Test to decide whether to investigate and, if needed, may issue advice or warnings, rebukes or financial penalties, impose practising conditions or suspensions, or refer serious matters to the Solicitors Disciplinary Tribunal (SDT), which alone can strike-off or impose unlimited fines. The SRA expects COLPs and COFAs in firms to maintain systems and promptly report serious breaches.

Worked Example 1.6

A solicitor is instructed to represent a client in court. The client asks the solicitor to mislead the court about a key fact. What should the solicitor do?

Answer:
The solicitor must refuse. The SRA Principles require solicitors to act with honesty and integrity and to uphold the rule of law and the proper administration of justice. Misleading the court would breach these duties and is misconduct.

Risk-Based Regulation

Risk-based regulation is the approach used by the SRA and other regulators to focus their resources on the areas of greatest risk to the public and the profession. This means that the SRA:

• identifies and assesses risks to its regulatory objectives (such as protecting the public, upholding the rule of law, and maintaining public trust)
• prioritises supervision and enforcement action where the risk of harm is highest (for example, in relation to client money, vulnerable clients, or unauthorised practice)
• expects firms to have systems in place to identify, monitor, and manage risks to their business and clients

Key Term: risk-based regulation
A regulatory approach that targets supervision and enforcement on the areas of greatest risk to the public, clients, and the legal system.

In practice, risk-based regulation links policy to the risks of reserved activities:

• Litigation and advocacy: risks to the administration of justice, fairness, and abuse of process. Regulators focus on misuse of rights of audience, improper litigation steps by unauthorised persons, and competence in advocacy.
• Conveyancing (reserved instruments): high-value transactions and client money risks (e.g. property fraud, failed registrations). Regulators expect robust client account controls, reconciliation, and secure payment processes.
• Probate: vulnerability of bereaved clients, accuracy of court-facing papers, and delays. Supervisory focus includes competence, timeliness, and clarity around contributions and statutory charges if legal aid is involved.
• Oaths and notarial activities: reliance by foreign authorities and financial institutions. Risk controls include identity verification and proper record-keeping.

Firms should implement proportionate controls: risk assessments tied to practice areas, competence frameworks and supervision structures for employees undertaking reserved work under supervision, staff training (e.g. anti-money laundering where relevant activities are undertaken), incident registers, and escalation processes to compliance officers. The Legal Services Board’s regulatory objectives guide risk prioritisation and help regulators balance consumer protection with access to justice and competition.

Worked Example 1.7

A small law firm regularly handles large sums of client money in conveyancing transactions. What is the SRA likely to expect from the firm under risk-based regulation?

Answer:
The SRA will expect the firm to have robust systems for safeguarding client money, regular account reconciliations, and effective supervision. The SRA may monitor the firm more closely due to the higher risk of harm if things go wrong.

Worked Example 1.8

A firm’s litigation department uses unqualified case handlers to draft pleadings and arrange service on defendants. Authorised solicitors review drafts but allow case handlers to file and serve. Is this compliant?

Answer:
Drafting may be permissible under supervision, but formal steps in the conduct of litigation (filing, serving statements of case) must be taken by authorised persons or within an entity’s authorisation and proper supervision frameworks. Allowing non-authorised case handlers to carry out such formal procedural acts risks unauthorised practice. The firm should ensure an authorised person formally executes and files procedural steps.

Consequences of Unauthorised Practice

Carrying out a reserved legal activity without authorisation or exemption is a criminal offence under the Legal Services Act 2007. It may also amount to professional misconduct if done by a regulated person. The courts may refuse to recognise steps taken by unauthorised persons (for example, issuing proceedings), and the SRA or other regulators may take disciplinary action.

Unauthorised practice can have serious personal and procedural consequences:

• Criminal liability: up to two years’ imprisonment for carrying out reserved activities while not authorised nor exempt.
• Contempt of court: acting in litigation or advocacy without entitlement may constitute contempt; courts have imposed imprisonment where individuals continued to “masquerade” as solicitors after authorisation was withdrawn.
• Procedural invalidity and wasted costs: courts may treat steps as invalid (e.g. unlawful commencement of proceedings) or order wasted costs against unregulated bodies conducting litigation without entitlement.
• Regulatory sanctions: regulated persons may face rebukes, fines, practising conditions, suspension, or referral to the SDT, which may strike off.

The line between non-reserved and reserved activity can be fact-sensitive. Unregulated providers who generate documents but leave parties to file them may avoid “conduct of litigation”, but if formal procedural steps are taken by the provider, it becomes reserved. Firms should ensure the correct person carries out formal steps and should document supervision.

Exam Warning

Carrying out reserved legal activities without authorisation is a criminal offence and may result in prosecution, fines, or imprisonment. It can also lead to disciplinary action, including striking off or suspension for regulated persons.

Worked Example 1.9

A struck-off former solicitor continues to negotiate and file applications in ongoing court proceedings, representing to the court and other parties that they are a practising solicitor. What are the likely consequences?

Answer:
This is both unauthorised practice and contempt of court. Courts have imposed custodial sentences for such conduct. Regulatory consequences are severe; the SRA may take further action, and courts may penalise the misuse of the court’s processes.

Worked Example 1.10

An online “divorce facilitator” drafts documents but requires parties to file all papers themselves. Is the facilitator conducting litigation?

Answer:
No, provided the facilitator does not carry out formal steps like filing or serving documents. If the parties themselves lodge documents, the facilitator is not conducting litigation. Any deviation where the facilitator takes formal steps risks unauthorised practice.

Key Point Checklist

This article has covered the following key knowledge points:

• Reserved legal activities are defined by the Legal Services Act 2007 and can only be carried out by authorised or exempt persons.
• The six reserved legal activities are: exercise of a right of audience, conduct of litigation, reserved instrument activities, probate activities, notarial activities, and administration of oaths.
• The scope of “conduct of litigation” focuses on formal procedural steps; drafting and general correspondence are not, by themselves, conducting litigation, but caution is needed around filing and service.
• Some instruments are excluded from reserved instrument activities (e.g. wills, powers of attorney, and agreements not intended to be deeds).
• Authorisation attaches to both individuals and entities; supervision of employees is permitted for certain reserved tasks (e.g. reserved instrument and probate work), but formal litigation steps must be taken by authorised persons or properly within firm authorisation.
• Exemptions include litigants in person, specific court-granted rights of audience, and some supervised or non-fee work; acting outside authorisation or exemption is a criminal offence.
• The SRA Principles apply pervasively; duties to the court and public trust are central when carrying out reserved activities.
• Risk-based regulation prioritises higher-risk areas (client money, vulnerable clients, misuse of court processes), expecting firms to implement proportionate controls, supervision, and training.
• Consequences of unauthorised practice include criminal liability, contempt of court, invalid procedural steps, wasted costs orders, and regulatory sanctions.

Key Terms and Concepts

• reserved legal activity
• authorised person
• exempt person
• approved regulator
• unauthorised practice
• SRA Principles
• risk-based regulation