The UK government has issued new wide-ranging sanctions to increase pressure on the Russian economy.
New laws severely limit access to legal services provided to businesses and individuals connected to Russia by British lawyers. This is in addition to previous restrictions on trust services.
Premiums for PII have been on the rise since 2019, prompting many solicitors to dread the arrival of summer with the usual request for time-consuming renewal forms.
A constant stream of annoying brokers banging on the door to quote doesn’t help to lighten the burden.
This year, however, the marketplace might be a little easier for well-run practices.
Many firms renewing in April found that premium rates had levelled off. Legal practices’ financial results coming out of the lockdown period were strong and this can push premiums up, even if Insurers risk-based rates stay the same.
Anecdotally, many Insurers say that claims are increasing, and we have certainly experienced a rise in the number of disputes with eye-watering potential.
Despite this, the same Insurers have a healthy appetite to grow their solicitors PII portfolios, for the first time in several years.
Law firm IT projects are notoriously difficult to get right. We have all known law firms that have spent big on shiny new case management systems, only to find that it has little real world benefit. Or people just don’t use it in a way that realises the theoretical gains.
We spoke to Alex Hutchinson, the freelance IT director, to find out why law firm IT projects often fall down.
Do you find it difficult to get your team to follow your AML policy and procedures? Do the words ‘head’ and ‘brick wall’ spring to mind?
Perhaps you should direct them to this case, which resulted in a £3,500 fine for a legal executive conveyancer who didn’t ‘adequately’ establish the source of funds on a couple of property transactions.
The SRA noted that this was contrary to the firm’s AML policies, controls and procedures.
There was no suggestion that this was a pattern of behaviour, or that the transactions resulted in actual financial crime. It was enough that a ‘wilful disregard of her regulatory obligations…had the potential to cause harm to others’.
Anyone who has direct responsibility for the cases they handle faces similar exposure.
If anti-money laundering and sanctions compliance are in the spotlight right now, spare a thought for the Criminal Finances Act 2017. A shy, overshadowed piece of legislation that desperately craves your compliance department’s attention.
In this post we look at:
- The scope of the Criminal Finances Act 2017
- Definitions of ‘facilitation of tax evasion’ and ‘associated person’
- Compliance controls you might consider putting in place
News and Guidance
- Guidance: Proceeds of crime – Comprehensive practice note on the Proceeds of Crime Act 2002, covering the main legal obligations and ways that solicitors can get caught. Makes for a good reminder to all staff, or the basis of a training session.
- Deadline for diversity submission is fast approaching – As you know, the SRA Diversity questionnaire has been sent out to all firms to complete. There are just over 2 weeks left to do so! Please note that the deadline to submit is Sunday 23rd July 2023. You can read more about the requirements here.
Law Society Updates (may require login)
- New law allows UK lawyers to practise in Luxembourg
- Updated practice note: SRA powers of investigation
- Updated practice note: Making gifts of assets
- Updated practice note: Entity-based regulation
- Updated guide: UK sanctions regime
- Research: Attitudes toward lawtech adoption: Findings from a survey of solicitors in England and Wales
- HM Treasury consultation – Reforming anti-money laundering and counter-terrorism financing supervision – This important consultation could result in a single AML supervisor for the legal professions. At the moment, the front line regulators (SRA, BSB etc.) are responsible for policing compliance with the Money Laundering Regulations, with varying approaches.
We were delighted to co-host this session with our friends at Thirdfort.
Unsurprisingly, we get asked many questions about source of funds, source of wealth, identification of clients, and the like. In the current world of regulation, we find many law firms are very nervous about ‘getting it wrong’ and want to ensure compliance.
In this webinar, our JBL team discussed some of these most common compliance queries with valuable input from Harriet Holmes of Thirdfort, including:
- Source of funds – how far do we need to go? How do I know I’m done?
- Source of funds – is the ‘Bank of Mum and Dad’ low risk?
- Source of wealth – can I take my client’s word for it?
- Risk assessment – do I need to do one at the start of every file?
- Ongoing monitoring – what should this look like in practice?
- Employee screening – we don’t DBS-check all our staff. Should we?
- Independent audit – how often does it need to be done?
- CDD – do I need to verify the identity of all the Directors of a client company?
- CDD – who do I need to verify in a trust?
SRA and SDT disciplinary decisions
- Ross Coates Solicitors – firm rebuked for failing to deal with substantial residual client balances.
- Jacob McSherry – paralegal barred from the profession for falsified CV and references.
- Mahmood Malik – non lawyer litigation executive barred from the profession for charging a divorce client £2,500 and banking the money in his personal account.
- Robert Arnison – partner suspended for a year after inserting a false witness signature.
- Malcolm Richard Glynn – struck off for lying about his connection to a known illegal money lender.
- Christopher Fry – fined £9,000 for a misleading PII application and running up unpaid professional disbursements to over £600,000.
- Jessica Cross – fined £1,700 following drink driving conviction.
- Nadine Feuerstein – solicitor rebuked for overseas drink driving conviction.
- Shideh Mirshamsi – rebuked for drink driving conviction.