We often get asked whether a particular breach (or series of breaches) is ‘material’ i.e. reportable to the SRA.
So in the light of the Duncan Lewis case our blog this week is on breaches, and the factors you should consider when considering whether a breach is material or not. Please do get in touch if you have a particular breach you would like to discuss.
We also bring you an update on the Solicitors Qualifying Exam and an interesting story on conflicts of interest which may make impact your own policies and procedures.
Is your firm a member of the Conveyancing Quality Scheme? If so, make sure your marketing material is not misleading – read more about that below.
The SRA has also recently published the Autumn update to the risk outlook, and we have summarised the updates to the 8 priority risks for you. We also bring you our usual roundup of disciplinary decisions as well as recent news releases from the SRA.
If you have any comments or feedback, please get in touch.
Regards,
Jon and the team
Essential reading: When is a breach “material”?
Our blog this week concentrates on the factors you should take into account when considering whether a breach is a material breach. It’s a question we are often asked, and there is limited guidance from the regulator.
Solicitors Qualifying Exam update
The Solicitors Qualifying Exam (SQE – apparently pronounced ‘skewy’) has making news again, following the results of a recent survey, which looked at the views of 1370 students and 59 law firms on the fundamental changes to the way solicitors will enter the profession. The survey found that the majority of law firms were aware of the changes, but there is a low awareness amongst students. The law firms that felt negative about the SQE ‘outnumber those feeling positive by more than two to one. Interestingly, the more firms said they understood the SQE changes the less positive they felt about it.’
Why it matters
Jo-Anne Pugh, Strategic Director of Programme Design and Development at BPP University Law School, finishes off the opening of the report stating ‘Ultimately, it may make sense for law firms and students to see the SQE as an essential ‘floor’ for legal training rather than a sufficient ceiling‘. This is unlikely to go down well at the Cube, with the SRA’s vision that SQE will ensure solicitors meet ‘consistent, high standards’. The SRA is however, cracking on regardless – recently announcing that it is asking the LSB to approve regulations implementing SQE.
Does your firm have CQS accreditation?
Some 3,000 firms are accredited with the Law Society’s Conveyancing Quality Scheme, or CQS. The Advertising Standards Authority has ruled that the Law Society’s own advertising of the scheme ‘misleadingly exaggerated the membership requirements’. The Law Society claims that firms have to go through ‘rigorous examination and testing to demonstrate that they have a high level of knowledge, skills, experience and practice’, a claim which the ASA ruled was misleading. In fact very few firms are audited by the Law Society, and the accreditation is given on the basis of a firm undertaking.
Why it matters
As well as the huge embarrassment to the Law Society, the ASA’s decision has put the burden on CQS firms to make sure that their marketing material is not misleading. Firms who have taken direct quotes from the Law Society may wish to consider removing the offending wording. We wonder whether the lenders will now put pressure on the Law Society to make the accreditation more robust.
‘Conflict out’ all your potential oppositions
A client named in proceedings as OE made an application to the Court to debar Raymond Tooth (Aka Jaws!) and his firm from acting for his wife in divorce proceedings. OE claims that he had consulted with Mr Tooth some months before his wife issued a divorce petition and imparted with confidential and privileged information. Mr Tooth conceded that a meeting probably did happen, but that he had no recollection of it and it was probably no more than a general discussion. OE had consulted with 5 other solicitors on the same day, despite already signing up with a firm. The judge commented that the meetings ‘were at least in part motivated not by a genuine consultation but a conflicting exercise’.
Why it matters
Whilst there is little that can be done to stop a litigant acting in bad faith, this case is a reminder of the importance of having a proper conflict checking procedure in place. In this case the judge found that no confidential or privileged information was disclosed in that meeting, but that is not the case in all initial meetings. Do initial meetings come up on your conflict search?
Let’s not forget that international firm White & Case was recently fined £250,000 by the SDT for a conflict issue.
Risk outlook Autumn update
The SRA has published its Autumn update to the Risk Outlook. The updates to the 8 priority risks are summarised below:
- Access to legal Services – SRA is looking into publishing more data and a reminder is given to respond to its consultation on Better information by the 20th December.
- Standards of service – We are promised that independent research on the effectiveness of dealing with complaints will soon be published. The SRA also refers to the concerns surrounding holiday sickness claims and the warning notice on this issue.
- Information security – GDPR comes into force in May 2018. Reference is made to the ICO’s 12 steps to take now guidance as well as the recent SDT case where a solicitor and his firm were fined for disclosing a woman’s address to her husband despite being warned not to.
- Protecting client money – cybercrime is a massive risk to client money, but positively the SRA reports that although still a serious threat, firms and consumers are getting better at identifying the frauds and the numbers are stabilising
- Anti-money laundering – reference is made to the NCA’s Suspicious Activity Reports Annual Report where the NCA have identified that legal sector submissions have reduced, despite an increase in reports overall. The SRA says it will ‘soon be asking solicitors and firms to tell us about their compliance with the new regulations’ – you have been warned!
- Investment schemes – this continues to be an area of concern and reference is made to the warning notice as well as the fines levies against SDT for solicitors who have got involved with investment schemes.
- Independence and integrity – reference is made to the warning notice on tax avoidance and to to a case where a solicitor was struck off the roll by the SDT for facilitating tax avoidance schemes.
- Diversity in the legal profession – data diversity has of course been collected earlier this year. Research includes a review of how firms promote diversity and diversity trends in the profession over the last 30 years.
SRA News releases
- SRA finalises new exam regulations whilst boosting qualifying work experience supervision
- Profession needs to be alert to money laundering
- Risk Outlook Autumn update
Best of the rest
This week’s best is the new focus by the Gazette which gives an useful roundup of ‘What the budget means for solicitors’.
Disciplinary decisions
- David Heselton was was a partner at Heseltons Solicitors, the firm closed as an authorised body in September 2010. After closure, Heselton was found to have failed to adequately respond to several requests to ensure the publicity of his practice was accurate and did not give the impression that it remained an authorised firm. He received a written rebuke and was ordered to pay the SRA’s costs.
- On the 22nd August 2017, Liam Tinkler entered into a regulatory settlement agreement with the SRA to receive a section 43 order, a rebuke and a £2000 financial penalty for sending a backdated letter to the Court given the impression that he complied with a Court deadline when he had not. Just over 2 months later the SRA have approved his employment as a conveyancing paralegal at another firm.
- Vikesh Dinoo Bharakhda received a rebuke and a fine of £2000 following a conviction of two offences of common assault and one public order offence.
- Mohammed Ayub, the sole equity partner at Chambers Solicitors, was struck off the roll following a convicting of conspiracy to defraud the Legal Aid Agency and a failure to supervise an unpaid junior member of staff. His salaried partner Neil Frew also agreed to be struck off.
