Regulatory Update

Bronwen Still director

Infolegal

To be covered

Getting started and regulatory help

Statutory background – LSA and its framework for legal practice

SRA and its regulatory changes – and their impact on you and your firm/practice

Sources of help

www.sra.org.uk

Contact centre: 0370 606 2555

Ethics guidance: 0370 606 2577

Law Society – practice advice: 0370 606 2522

Returning – where to start?

Register with MySRA

Obtain practising certificate (fee for full year 2016/17 £290)

Notify SRA of your practising address within 7 days

Note - new training requirements

Do I need a practising certificate?

Practising certificate necessary:

Sections 1 and 1A Solicitors Act 1974

Effect of Rules 9 and 11 Practice Framework Rules

Accepting position as paralegal

Becoming an in house solicitor

Extensive SRA guidance:

http://www.sra.org.uk/solicitors/code-of-conduct/guidance/do-i-need-a-practising-certificate.page

Coming off the roll an option

Setting up in practice

As a sole practitioner/recognised body - must be authorised

i.e. a firm which has been recognised by the SRA and in which all the managers and owners are lawyers

As an ABS – must be licensed

i.e. a firm which has been licensed by the SRA and which includes non-lawyers as managers and/or interest holders and at least one lawyer manager

Authorisation Rules – your starting point

Legal Services Act 2007

Main objectives:

Open up legal services market

New transparent regulatory framework (NB government review)

Separation of regulatory and representative powers

New efficient complaints regime

Introduction of regulatory objectives

Opening up of legal services market

Legal Disciplinary Practices - 2009

Alternative Business Structures - 2012

Multi-disciplinary Practices - 2014

New Regulatory Regime

Legal Services Board

Ten Approved Regulators

Office for Legal Complaints/Legal Ombudsman

Legal Services Consumer Panel

LSA – approved regulators Legal Services Board (LSB) - Independent statutory body overseeing nine approved regulators

Law Society (SRA)

Bar Standards Board

Chartered Institute of Legal Executives

Council for Licensed Conveyancers

Chartered Institute of Patent Attorneys / Institute of Trade Mark Attorneys – now IPREG

Master of Faculties (notaries)

Costs Lawyers Standards Board

Plus three accountancy bodies

Approved regulators – what they regulate

“Reserved legal activities”

Defined in LSA:

Advocacy and litigation

“Reserved instrument activities” – conveyancing

Probate activities

Notarial activities

Administration of Oaths

Will writing – an interesting story!

The Office for Legal Complaints

Independent ombudsman service known as LeO

Deals with consumer complaints – i.e. redress for poor service – in respect of any regulated firm or individual, not just SRA firms

Powers include:

Requiring firms to pay a charge

Requiring firm to carry out remedial work

Refunding / reducing legal fees

Awarding compensation up to £50,000

SRA – how it describes itself

An outcomes focused, risk based regulator

Proactive – not reactive

A proportionate regulator

Wants to work with firms to help them improve

What it has done

Became a licensing body – December 2012

Introduced the SRA Handbook – October 2011

Developed risk framework/risk index

Re-structured itself:

Authorisation

Supervision

Enforcement

SRA – outcomes focused, risk based regulator

Outcomes focused approach to regulation means “our goal is to ensure that legal services providers deliver positive outcomes for consumers of legal services…” [SRA] Risk based regulator – goal is to identify and manage risks to the public/regulatory objectives

Risk framework and index Risk outlook – updated twice yearly Risk profiling of all firms

SRA Handbook 2011

Manifestation of OFR/risk based approach

Contains all SRA’s regulatory requirements including:

Set of Principles

Code of Conduct

Accounts Rules

Authorisation Rules

Most up to date version online

SRA Handbook - contents The Principles Code of Conduct Specialist Services Rules Authorisation Rules Practice Framework Rules Accounts Rules Indemnity Insurance Rules/Compensation Fund Rules Disciplinary Procedure Rules All training requirements Glossary

The SRA Principles 2011

Mandatory and overarching – you must:

Uphold the rule of law and administration of justice;

Act with integrity;

Not allow your independence to be comprised;

Act in the best interests of each client;

Provide a proper standard of service to your clients;

Behave in a way that maintains the trust the public places in you and the provision of legal services;

The SRA Principles 2011

Comply with your legal and regulatory obligations and deal with your regulators and ombudsmen in an open and timely manner;

Run your business or carry out your role in the business effectively and in accordance with proper governance and sound financial and risk management principles;

Run your business or carry out your role in the business in a way that encourages equality of opportunity and respect for diversity;

Protect client money and assets.

SRA Handbook – the use of outcomes

All rules prefaced by high level outcomes

The Code of Conduct –

Outcomes replace rules

Indicative behaviours support outcomes – tell you what achieving/not achieving outcomes looks like

SRA Code of Conduct

Comprises four sections:

You and your client

You and your business

You and your regulator

You and others

Each section is subdivided into chapters

Code of Conduct - chapters

Section 1 - You and your client

Chapter 1 Client care

Chapter 2 Equality and Diversity

Chapter 3 Conflicts of Interests

Chapter 4 Confidentiality and disclosure

Chapter 5 You client and the court

Chapter 6 Your client and introductions to third parties

The SRA Handbook – compliance officer regime

All firms must have approved at all times:

a COLP and a COFA

Must be:

manager or employee of firm

of sufficient seniority and responsibility to fulfil role

Approved by SRA – but solicitor COLP/COFAs deemed approved in small firms

(COLPs only) a lawyer

Important messages from the Handbook

Firms must have compliance plans – incorporating effective risk management

These must be updated and reviewed

Everyone is responsible for compliance

All non compliance must be recorded

“Material non-compliance” must be reported immediately to the SRA

But – changes on the way

SRA reviewing the entire Handbook

Main proposals

Fewer Principles

2 Codes of Conduct – firm Code and individual’s Code

Standards – not outcomes, no IBs

Shortened simplified Accounts Rules

Solicitors able to provide services to the public through non-authorised entities

Questions

Any Questions?

Bronwen Still Director Infolegal Ltd

Email: bronwenstill@infolegal.co.uk

Website: www.infolegal.co.uk