The SRA’s New ‘Effective Supervision’ Guidance Is Both Prescriptive And A Must Read For All Law Firms
New guidance from the Solicitors Regulation Authority sets out the expectations placed on law firms when it comes to ‘effective’ supervision.
Although the guidance does not officially carry the force of rules or warnings, solicitors and law firm leaders must have regard to guidance when interpreting the Code of Conduct requirements.
And the regulator “will have regard to it when exercising our regulatory functions”. So pretty much a rule by the back door.
Overcoming the challenges associated with economic instability looks set to trouble individuals and businesses alike in 2023. Increased wage demands look certain to add to the rising cost of doing business, both fuelled by rising inflation.
The impact of this situation means the Bank of England at their latest raised interest rates on Thursday 15thDecember 2022 to 3.5%, a rise of 0.5% percentage points.
Rising interest rates will be an unwelcome thought for many mortgage holders.
However, for legal practices that hold client monies, rising interest rates should be welcome news.
Your finance function could possibly generate more income in 1 hour than the average fee earner could in 1 year.
Litigation funding is an excellent option for many dispute resolution lawyers and their clients, especially when dealing with high-value or complex cases. It can help bring a successful outcome to a case, as well as provide clients with the firepower they need to pursue justice. But what exactly is litigation funding? How can it benefit your clients? How do you obtain funding for cases big and small?
In this post we look at the Code of Conduct requirements to have a written payment of interest policy in place, and how firms should decide what is ‘fair’.
With no official guidance on a reasonable de minimis figure, firms are left to decide for themselves what is the threshold for interest to reach before paying out.
News and Guidance
- Warning notice – Strategic Lawsuits against Public Participation (SLAPPs) – Must read. SRA gets serious about the abuse of the legal system in the name of reputation management. Now, whilst this is not a service line for the vast majority of law firms, it does have practical implications for all litigators. The warning notice could be read to apply to any form of aggressive litigation conduct (see, for instance, the sections on ‘conduct of the case’ and ‘labelling correspondence’).
- Guidance – Complying with the UK sanctions regime – Must read. SRA provides in-depth guidance note on sanctions compliance. The ‘risk factors’ and ‘red flags’ sections are particularly useful for communicating to your team. (And to think a year or two ago, sanctions checks were something of an afterthought to most firms).
- Consultation – SRA Standards and Regulations: minor amendments – SRA seeks to ‘tidy up’ certain elements of the 2019 rules, including the Accounts Rules, Authorisation of Firms Rules and rules relating to freelance solicitors. Most of these changes had been previously been covered by separate guidance, which will become official rules under the proposed changes.
- ICYMI…Guidance – Effective supervision – SRA issues new in-depth guidance to supervision. A cynic might say that they are once again introducing quasi-rules through guidance notes, without the need for consultation and LSB approval.
- ICYMI…Guidance – Immigration work – SRA guidance relating to the issues identified in a thematic review.
Law Society – New and updated practice notes (may require login)
- Ethics feature – The party’s over: trainee solicitor fined for drunken sexual misconduct
- Ethics feature – A changing ethical landscape: findings from our ethics roundtables
- Ethics feature – Fake news: solicitor suspended for misuse of social media
- Q&A – The other side won’t explain how the costs my client must pay are calculated. What can I do?
- Practice note – Estate administration: banking protocols
- Consultation response – New SRA-run indemnity scheme puts consumers first
- Legal Services Board consultation – Business plan 2023/24 – amongst the new proposed workstreams, the super regulator intends to make client vulnerability more of a priority for front line regulators.
- Gazette – SRA intervenes to shut down Metamorph firms– high-profile law firm consolidator runs into financial and regulatory trouble.
Live webinar: It’s the final countdown (of 2022)…our round-up of hot topics past, present and future
Wednesday 21st December, 12:00pm via Zoom – Register here.
It has certainly been an eventful year. World events have had a real impact on the world of risk and compliance. The pace of change has been breathless at times. The regulators have been busy building their ever-expanding library of guidance.
And lawyers are expected to keep up to speed.
But don’t panic! This session will be a quick fire round-up of the essential updates of 2022.
We will also take the opportunity to look forward to the likely hot topics of 2023 – forewarned is forearmed!
- A re-cap of all the important compliance issues you should have paid attention to in 2022
- A look forward to the likely hot topics for 2023
And of course, we will be answering any burning questions you may have!
Spaces are limited, so if you or your team would like to join, please don’t leave it to the last minute. You can register in advance for this webinar:
After registering, you will receive a confirmation email containing information about joining the webinar.
Feel free to share this email with colleagues who may be interested in this event.
We hope to see you there!
SRA and SDT disciplinary decisions
- Francis Hutchinson – rebuked for drink driving conviction
- Kookie Gibson – non-lawyer ‘struck off’ by the SDT for dishonestly filing backdated documents as evidence.
- Nicola Cain – former barrister working as a partner in an SRA firm struck off. She was disbarred for fabricating court documents, misleading her clients and the court.
- Brenda Devereux – conveyancer struck off after taking a second job with a client without telling her law firm employer, contrary to her employment contract, resulting in irregularities in file handling and AML failures.
- Robert Grimbley – rebuked following drink driving conviction
- Paul Wilkinson & Co – rebuke for firm that failed to display the SRA digital badge on its website
- Woodroffes – £2,000 fine for having inadequate AML controls
- Md Mohiuddin Hossain – struck off for dishonestly witnessing a signature.
- Nicola Helen Neilson – conveyancer fined £10,000 for failing to protect client interests (not registering charges on time), breaching undertakings and misleading a client.
- Danielle Louise Shawcross – sole practitioner fined £5,000 for Accounts Rules failures.