Solicitors can do consumer credit

Solicitors are to be allowed to carry out certain consumer credit activities.

The Solicitors Regulation Authority (SRA) board, which met last week, approved authorisation as long as the activities are central to the legal services the law firm provides. This means firms will not also have to be regulated by the Financial Conduct Authority (FCA) and be over-burdened with additional rules for consumer credit.

The SRA will publish guidance in the autumn on carrying out consumer credit activities.

The SRA Compensation Fund paid out more than £23.8m in the year to 31 October 2014, according to figures reported to the board. This compares to £13.8m in a 10-month period in 2013 and £18.5m in 2012. The fund compensates those who have lost out financially due to money not being accounted for or misappropriated by their solicitor. The board heard that 1,701 claims were made, with an average award of £80,000.

Crispin Passmore, SRA executive director for policy, says: “This is a positive step forward.”