LSB approves new SRA reporting regime
The Legal Services Board (LSB) has approved the proposed new requirements for reporting breaches to the SRA, which will take effect at the end of November alongside the new SRA rulebook.
The changes are reported to include a new rule 7.7 which requires that:
Why it matters
The new rules provide the SRA with greater investigative powers at an earlier stage. What remains outstanding is clear guidance in respect of the SRA’s whistleblowing policy following on from recent high profile cases, particularly Emily Scott who was struck off after alerting the SRA to breaches that occurred when she was a trainee. Rule 7.9 appears to obligate firms to refrain from subjecting employees to detrimental treatment as a result of any report or proposed report to the SRA but it isn’t clear whether the regulator itself will go easy on professionals who raise the alarm.
Common sense dictates that going after whistle-blowers is self-defeating.
LeO publishes ‘good costs service’ guidance
The Legal Ombudsman (LeO) has published new guidance in respect of what criteria it will apply when considering complaints relating to costs.It states that the aim of the guidance is to achieve a sound costs service for the consumer and the guidance indicates that the best way to achieve this is through transparency. It helpfully breaks down each contact point with the client when it is anticipated that costs information will need to be shared with the client and how this should be carried out.
You can download our one-page briefing note below, for a concise breakdown of LeO’s guidance.
Legal profession told to tighten AML procedures
The International Bar Association (IBA) and the Organisation for Economic Co-operation and Development (OECD) has published its report in respect of the Role of Lawyers and International Structures which sets out 8 principles that it suggests legal regulators should adopt to ensure that self-regulation is effective.
They are reported as follows:
- Non-facilitation of illegal conduct;
- Misuse of the duty of confidence and privilege – “A lawyer should not use the confidential nature of the lawyer–client relationship or the principles of legal professional privilege to shield wrongdoers”;
- Carrying out client due diligence;
- Taking action where client conduct is, may be or becomes, illegal;
- Multijurisdictional risk – A lawyer should ensure that transactions involving more than one jurisdiction are legal;
- Not using illegally obtained information – “To facilitate this, legal frameworks should be consistent across jurisdictions as much as possible, given that it is often through cross-border conduct that confidential or secret information located in country A is accessed (without the consent of the owner of the information) and then disclosed to a person in country B”;
- Disclosure of beneficial ownership – A lawyer should obtain beneficial ownership information, supported by domestic laws providing for the disclosure of ultimate beneficial ownership of any corporation, trust or other legal entity formed within the jurisdiction and access to the information for state regulators, investigators and enforcement agencies; and
- Any advertising by lawyers on international commercial structures should be transparent, accurate and truthful.
It is reported that Natalie Limbasa, legal adviser for the OECD, said: ‘There is pressure on the legal profession and we need to act before someone else does”. The suggestion is that legislation will be introduced to combat the problem if lawyers aren’t able to evidence they have their house in order.
Why it matters
We are seeing increased activity from both the regulators and the government with regards to tackling money laundering. The Draft Registration of Oversees Entities Bill, which aims to make it difficult for money launderers to use UK property as a means of hiding criminal funds, is currently before the joint committee but has been criticised for not eradicating loopholes.
Nevertheless it is indicative of government’s will to tackle the issue head on. The SRA has recently conducted a sweep of law firms and published its thematic review, which highlights huge concerns with regards to the apparent lack of compliance on the part of the legal profession. It has also published a new warning notice recently. The conduct of lawyers is likely to receive increased scrutiny.
Practice notes and guidance
- Legal Ombudsman guidance in relation to achieving a good costs services – see story above together with our briefing note.
- David Kingsley Wedge has been struck off and fined £15,972 by the SDT following findings being made in relation to allegations of dishonesty. The tribunal found that his “conduct was motivated by his desire to cover up his incompetence and his failure to progress matters”. One of the cases concerned a child contact matter which he failed to progress and deceived the client in respect of the proceedings.
- William Bowes Mawdsley, a trainee solicitor, has been handed a section 43 order banning him from working in any regulated entity without SRA permission after having been found guilty of being in possession of a class A drug (cocaine) when attending a police station as a police station representative.
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Change of company name – Jonathon Bray Limited
The eagle-eyed amongst you will have noticed that we have changed our name to Jonathon Bray Limited in order to better reflect our brand and service offering. The company itself is the same entity (Company Number 07799826) and our full details are available at Companies House.