SRA Standards and Regulations – in force from Monday
It’s finally here, launch day. Are you ready with your party poppers and fanfare?The new rules have been talked about ad nauseam over the last few months. Hopefully now we can shift our focus to some more pressing compliance and risk topics.
AML, particularly with the SRA’s renewed focus, and the 5th Money Laundering Directive almost upon us (January 2020), is the big topic for most law firms. Many are scrambling around to get their systems in place before the regulator comes knocking.
Brexit could still be an issue for many cross-border firms, or those who send or receive data from the EU.
Fraud and cybercrime targeting solicitors gets more sophisticated by the day.
And yet much of our attention has been focused on the SRA’s new rulebook.
We said it last time, but it’s worth repeating: Don’t panic
Yes, it is important that all regulated people are aware of the new rules. We need to do the training. (Reminder that all our retainer and ABS clients have access to the staff e-Learning module in your compliance portal).
And yes, there are some changes – some quite subtle and unintentional, others less so.
But the main theme of the new rules is evolution not revolution. Simplicity and flexibility over poorly drafted Outcomes and Indicative Behaviours. And taking the next logical step on the Principles Based Regulation journey.
The biggest changes in the rules are:
- The radical new ways of practising outside of full regulation
- A significant emphasis on ethics and individual accountability over ‘compliance’
- Wonderfully accessible and sensibly-drafted Accounts Rules
Even the regulator’s message has been that ‘compliance’ on 25th November will look the same as today. We shouldn’t need to be making wholesale changes to internal systems and processes.Instead, we need to increase our focus on:
- Taking personal responsibility for our own ethical behaviour – both in and out of the workplace
- Being less reliant on prescriptive rules, and being able to justify our decision making
- Keeping records to demonstrate compliance
- Understanding rules that apply to us – for example, the Accounts Rules (which are now accessible to all)
- Reporting our concerns internally and – where necessary – externally
- Understanding that supervisors carry a regulatory responsibility – they are accountable for the work of those they supervise
- Minimising the risk of working with the ‘new breed’ of solicitor – the freelancers and those working for unregulated businesses.
- Getting used to keeping a close eye on regulatory guidance.
Access the e-Learning (clients only)
SRA Digital Badge – mandatory from Monday
Is the Digital Badge GDPR compliant…?
The SRA came under fire recently by risking the unlawful processing of personal data via the SRA digital badge. It has been reported that the software used by the SRA has the ability to track website visitors and and target them with advertising.
The regulator has now confirmed that these concerns has prompted them to turn off the Google analytics integration “at the moment”.
Latest cybercrime attacks
Equally attractive to cyber criminals and agents of espionage are transaction projects, intellectual property, and the legal affairs of corporates.
To underline the point, the SRA keeps a running log of attacks and attempted frauds. We suspect these are the tip of the iceberg:
- Warning: Correspondence from “Struattslaw UK LLP”
- Warning: Letter misusing the name of Bott & Co
- Warning: Email misusing the name of Allen & Overy LLP
Legal Ombudsman drops mediation scheme
Unfortunately, there was lack of appetite from both law firms and complainants, resulting in a success rate of just 4 per cent.
ICO provides new guidance on ‘special categories’ of personal data
Special category data includes the following information relating to an individual:
- health
- sex life or their sexual orientation;
- racial or ethnic origin;
- political opinions;
- religious or philosophical beliefs; or
- membership to a trade union.
Practice notes and guidance
- New Law Society Practice Note: Legal Professional Privilege
- SRA guidance: Steps required to identify your client under the new Standards & Regulations
Disciplinary decisions
- Waheed Rahman suspended for inflating his hourly rate tenfold as a transaction ran into difficulty.
- Ian Burleton – non-lawyer working in the finance section of a City practice – convicted for diverting £32,000 intended to pay suppliers to his own account.
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