Hello, and welcome to our new look newsletter!
The premise is very simple – we want to be able to keep you more regularly updated with key news in the compliance world. So, we pull together the most important updates from the regulators, Law Society, legal press etc. to save you time hunting for it. We’ll also comment on each news item setting out why it’s important, and identify any action you need to take.
Sound good? Great – let’s get straight into it.
SRA Handbook Updated
Version 16 (yes, you read that right) of the SRA Handbook was published on 1 April 2016.
Why is it important?
There are 2 notable areas of change in the Handbook. Firstly, some of the rules around authorisation of new firms have been simplified or removed completely. Great news for ABSs, which were until now having to shoe-horn reserved activities into their licence purely to get authorised.
Secondly, the new rules on conducting consumer credit work have come into effect. The new position is that (thankfully) you do not have to be separately regulated by the FCA to do consumer credit work that is incidental to legal work.
More information can be found here
City solicitors have ‘very poor’ knowledge of SRA Handbook
Research has found that an alarming proportion of City lawyers demonstrate ‘very poor’ knowledge of the SRA rules. For many, compliance has been ‘insourced’ to specialists, rather than being seen as everyone’s job, with an over-reliance on the COLP in particular.
The author of the research, Dr Steven Vaughan, noted that “there is a widely accepted view (erroneous in our minds) that the Handbook is common sense and that professional conduct issues are so obvious that direct reference back to the Handbook is not necessary.”
Why is it important?
In our experience, it is not just City lawyers who lack specific knowledge of the Handbook. We still see experienced lawyers openly admitting that they have never read the Code of Conduct, 5 years after its release. Others only have a vague understanding of Outcomes Focused Regulation (OFR), or wrongly assume that there is no prescription at all.
Many see the COLP as the ‘go to’ person whom they would expect to know everything. This is not what the COLP role is supposed to be about – the compliance responsibility is on everyone in the firm, and this starts with a duty to be familiar with the SRA Handbook.
As a profession, we are pretty good at training everyone on AML, data protection etc. But compliance, risk and legal ethics are often forgotten topics.
Read more here
Solicitors’ handbook to be slashed to just 50 pages
The SRA has outlined plans to cut the Handbook from its current 600 pages to nearer 50. The revised Handbook and Code of Conduct will be published for consultation in June.
Why is it important?
The proposed plans aim to simplify the Handbook and make it more easily accessible. The Code of Conduct will be no more than 10 pages, and the Accounts Rules will be significantly reduced – perhaps meaning a move away from the silly technical breaches that pose no harm.
It will also change the way the regulator operates, moving away from more prescriptive rules to more of a collection of core behaviours and values that a solicitor would be expected to adhere to. Crucially this means that all of the detail and guidance will disappear from the Handbook. In its place we are promised better guidance and toolkits on the SRA’s website. For those who enjoy the flexibility of OFR, this is fantastic news – but not so much for those who prefer the certainty of black-and-white rules.
We eagerly await to see if the new approach does improve solicitors’ knowledge of the rules.
You can read more about this story here
Warning Notice on personal injury
The SRA have released a new warning notice on ‘Risk factors in personal injury claims’.
Why is it important?
Issued on 21 March 2016, this is a must read for anyone working in personal injury, particularly those who take referrals from third parties, work closely with them or act on their instructions.
The SRA only issues Warning Notices infrequently (the last was July last year) – so when they do it is worth sitting up and taking note.
You can read the full warning notice here
Our ‘Top Tips’ on compliance!
Following a successful CPD Seminar this week, many attendees have already been in touch requesting a copy of our slides with our Top Tips about how to stay on track and focused on compliance. This session was based on our experience with over 100 firms over the past 5 years. Our model pulls together all the good bits and systemises compliance.
You can access our slides here
