The Solicitors Regulation Authority (SRA) is formulating a new whistle-blowing policy which could see individuals who report misconduct at law firms and alternative business structures (ABS) treated more leniently.

The SRA's board and its compliance committee are considering whether to launch a full consultation which would see the legal profession canvassed for feedback on the proposals.

The new policy – dubbed the 'Co-operation Agreements' policy – also includes a so-called 'whistle-blowers' charter', which would see the authority enter into co-operation agreements with witnesses who would in turn provide full disclosure and, if necessary, give live evidence in a court or tribunal. Their own conduct would be dealt with as part of the agreement.

SRA director for legal & enforcement David Middleton said: "We estimate that a handful of cases every year might benefit if potential witnesses who may have been involved in some wrong-doing could come forward and be offered leniency as part of a co-operation agreement.

"Respondents to investigations are already aware that the early correction of problems and co-operating generally with us can significantly mitigate any failures on their part."

He added: "In that context, a co-operation agreement scheme would be another step forward in encouraging disclosure and co-operation. It would be particularly beneficial in providing transparency both for those who might wish to take advantage of it, but also our staff and stakeholders as to how the scheme will operate."

The SRA is following in the footsteps of the Financial Services Authority (FSA), the Office of Fair Trading and European Commission, all of which have introduced similar leniency schemes in recent years.

Feedback obtained from a consultation on the FSA's leniency scheme included concerns that a lack of similar schemes at other regulators could damage its success.