Tel: 020 7626 0191


  • QLP Legal,
  • 124 City Road,
  • London, EC1V 2NX

What is incidental?

It’s a curious word, incidental. Originating somewhere in the 17th Century with roots in Latin, it has a surprisingly wide range of definitions. Indeed, even a cursory ‘surf’ of the internet will come up with the following subtle variations:

This is not mere rambling, however. The reason that the word has been placed in the spotlight is that regulatory change has once again reared its (unwelcome) head, with the FCA taking over the regulation of consumer credit activities from the Office of Fair Trading. As a result, from 31 October an SRA-authorised firm will only be able to carry out regulated consumer credit activities (think credit brokerage, debt advice or debt collecting etc.) if the firm is authorised by the FCA to carry out this business or, in the alternative, the activity is an exempt regulated activity under Part 20 of the FSMA.

Now, there are a number of conditions to be met in order for an activity to be exempt, but the crux of the matter appears to be that the consumer credit activities are provided in a manner which is incidental to the provision of legal services to a particular client. So, back to the question, what exactly is incidental?

Attempts to arrive at an answer will no doubt lead to a lot of head scratching for lawyers up and down the land, as they attempt to come terms with the new regime. Of course, they could always succumb to the SRA’s useful suggestion that, due to uncertainties, most prudent firms would register with FCA in any case…

Those ‘prudent’ among you will be placed into either ‘higher-risk’ or ‘lower-risk’ categories and have a detailed application process for FCA authorisation to look forward to, probing for information regarding your business, its structure and financial resources. Oh, and there is a fee to be paid if you do make the threshold (of course!)