A quick reminder that COLPs need to submit their AML declaration to the SRA today (this is only relevant if you are subject to the Money Laundering Regulations and have received the declaration ‘request’ by email)
Have you read the SRA’s client care guidance?
We’ve been thinking a lot about SRA guidance lately. As you know, they have published almost 60 separate guidance notes to fill in the gaps left by the new feather-weight rulebook (Standards and Regulations).One that jumps out as being particularly important to the entire profession is the guidance on client care letters.
Now, ever since we entered the world of principles based regulation last decade (😱), the SRA has resisted giving much – if any – guidance on what ‘compliance’ looks like. That was down to the individual firm.
So this new suite of guidance is a significant departure from that.
On the one hand you might be thinking, “wow – that’s a useful resource. Thanks, SRA!”
On the other hand you might be questioning where you stand if you get your client care letters ‘wrong’ in light of the guidance. I mean, it’s not mandatory, but they say, “we may have regard to it when exercising our regulatory functions”.
And anyway, isn’t it The Law Society’s job to be guiding the profession (which they do, in a very helpful practice note)? We pay the regulator to enforce standards and protect the public where necessary. If they have chosen to give us a rulebook with huge gaps in it, then surely they can’t then try and retrospectively add de facto rules through the back door.
Read our overview of the guidance
LSB wants to review CPD again – ongoing assessments of competence a possibility?
The Legal Services Board (LSB) has issued a call for evidence to assess whether the current model of continuing competence/CPD is fit for purpose.Matthew Hill, Chief Executive of the LSB, said:
“Public confidence is the lifeblood of professional services, and the legal sector is no different. People need to know that the professionals they hire have the right and current skills and knowledge to provide services they can trust.
‘We know that consumers assume legal professionals are required to demonstrate competence throughout their careers. In reality, once qualified, there are few formal checks on competence.”
Can we really object?
If – and at this early stage it’s a big if – the LSB decides to instigate a form of ongoing professional assessment, perhaps that’s a good thing. We would indeed expect anyone practising law to be competent, and for the incompetents to be weeded out before they can do harm. So in theory there is nothing to lose.
We insist that our teachers and schools are assessed regularly, so it seems logical on the face of it that the same applies to lawyers. So long as it is sensibly delivered and does not add to the mountain of regulation, we should be cautiously open-minded.
Let’s keep an eye on this.
The call for evidence closes on 15 May 2020.
SRA wants to dilute client protections further by reducing Compensation Fund awards
Not content with trying and failing to water down solicitors’ PI insurance, the SRA is now looking to reduce awards available to innocent claimants under the Compensation Fund scheme.Claimants can currently claim up to £2m from the fund, if say their solicitor runs off with the client account. Under the SRA’s proposed rules in a new 12-week Consultation, awards would be limited to £500,000.
An alien visitor to Earth might think that a bit odd for a public interest regulator. Mork, you would be right.
Yes, the Compensation Fund does need to be sustainable. But isn’t it better for a regulator to concentrate on enforcing its rules – and dare we say it, targeting the real threats to the public – rather than expecting clients to pay.
If people don’t trust that they will be fully compensated when a rogue nicks off with their money, what is the point in regulation?
Practice notes and guidance
- The MOJ has issued three Brexit-related guidance notes:
- New and updated Law Society practice notes and advice:
- Flood risk
- Contaminated land
- UK regulations made to implement the EU mandatory disclosure rules – reporting requirements for intermediaries
- Criminal Finances Act 2017
- Brexit transition period
- Responding to a financial crime investigation
- Tipping off a client
- Customer due diligence
- Land Registry
- Anti-money laundering risk assessments
- Money laundering warning signs
- Sanctions guide
- Financial crime
- Keisha Hackett struck off for taking advantage of a vulnerable client’s lack of knowledge of the legal system; failing to apply for legal aid; entering into a private retainer; paying money into a personal account; failing to account to her firm.
- Sarinjit Singh Bahia fined £30,000 for incompetently accepting instructions to transfer £100,000 sale proceeds based on a bogus power of attorney.