The Compliance Partner – May 2023
Use the arrows to flick through our latest compliance newsletter.
A plain text version is provided below.
During the course of the month, we have published a number of articles in which we discuss regulatory issues directly relevant to law firms and industry professionals. In this month’s Compliance Partner newsletter, we review industry related news along with the latest regulation and compliance updates and advice published by The Strategic Partner.
Key compliance articles:
Businesses are being strongly encouraged to restrict the volume of alcohol served at workplace social gatherings to reduce the likelihood of individuals engaging in unacceptable or inappropriate behaviour towards their colleagues.
This guidance from the Chartered Management Institute (CMI) arrives in conjunction with the unveiling of a recent survey, indicating that approximately one-third of managerial staff have observed harassment or improper conduct during company celebrations.
The poll further reveals that women were more inclined than their male colleagues to report having witnessed such inappropriate behaviour at these events. You can read further information publicised by the BBC here.
While this guidance is aimed at all industry sectors, law firms and their managers have additional obligations to ensure that behaviour outside of the office does not breach SRA Core Principles, specifically those which say you must act with honesty and integrity and “… behave in a way that maintains the trust the public places in you and in the provision of legal services.” Several published cases have highlighted the high-level standards of ethical behaviour expected by solicitors, even in their private life, including how they conduct themselves online or over social media. – see recent case highlighted in compliance news roundup.
Furthermore, the regulator has recently set out its expectations regarding new rules on health and well-being in the workplace – continue reading here
SRA Raises Concerns over Accounts Rules Failings
The Solicitors Regulation Authority recently expressed concerns over the increasing number of firms failing to meet their obligations under the Account Rules. In particular, it is felt that some firms are failing to meet the requirements under two specific areas, including Rule 3.3, which states solicitors ‘must not use a client account to provide banking facilities to clients or third parties, and obligations under Rule 12 regarding obtaining and delivery of accountants’ reports.
Read the full article and our guidance regarding the SRA’s Accounts Rules Concerns here
SRA Continuing Competence: New Focus Warnings
Announcements from the SRA earlier this year confirm that the regulator will take a more proactive and robust approach to assessing continuing competence. From this summer, it will publish an annual report with a general assessment of the profession’s competence and highlight areas where standards fall short.
To collect this data, firms must provide information on first-tier complaints and professional indemnity insurance claims, and the regulator will conduct spot checks, audits, and file reviews. This review process may become more intrusive as the SRA seeks evidence of supervision, quality checks, and training record. –
Compliance news round-up
Unnamed solicitor fined £23,000 over ‘sexualised’ song
A solicitor has been fined £23,000 plus £22,000 in costs after they sang a song with sexualised gestures in front of a colleague following a Christmas lunch. The solicitor, referred to as Respondent AC, was a partner of the firm, and the tribunal involved complaints raised by Person A, who joined as a trainee. Although AC was four years older than Person A, they acknowledged a power imbalance due to their respective roles within the company. The solicitor’s behaviour was deemed inappropriate and resulted in a significant penalty. The Solicitors Disciplinary Tribunal proved the allegation that, while in practice as a solicitor, AC sang a song in front of and/or directed at Person A and made gestures which accompanied the words used, which were sexualised in nature. AC was found to have breached Principles 2, 6, and 9 of the SRA Principles.
SRA asks solicitors for more as budget soars by £10m
The fees for practising solicitors are going to experience an increase this year. The Solicitors Regulation Authority (SRA) and Law Society require an additional £9.3m to support their work. Subsequently, it is expected that the Solicitors Regulation Authority will ask solicitors to pay 7% more in practising fees to help fund a £10m hike in the regulator’s annual budget.
In the announcement published by The Law Society Gazette, it has been confirmed that the SRA’s portion of the individual practising certificate fee will increase from £151 to £162 next year. This is due to the regulator’s contribution from the profession increasing from £60.5m to £67.5m. Law Firms – responsible for around 60% of this total – will continue to pay a proportion of their turnover. It is not yet known what the Law Society’s proposed call on the PC fee for 2023/24 will be.
Deadline for submitting your response on financial sanctions risk ends this month
Firms are reminded that they must inform the regulator about the firm’s approach to financial sanctions. All SRA-regulated firms not previously required to provide a return as part of the SRA’s 2022 anti-money laundering information exercise must participate in this exercise.
The SRA will have emailed Your Compliance Officer for Legal Practice (COLP) or Authorised Signatory with instructions if your firm is included.
The window to provide this information is open from 2—31 May.
Read the full notice here:
All relevant firms must submit the information within the timetable, as there are no exceptions to the requirement to do this
Regulatory Guidance and Support from Industry Experts
At The Strategic Partner, we work with firms to assist them with the management of risk, compliance, and regulation through a range of training and outsourced support solutions. Our goal is to ensure the firms we work with have and retain a compliant structure enabling the firms, their managers, and owners to focus on running their businesses and servicing their clients.
If you believe your firm may be at risk or wish to confirm your firm is achieving the required standard, we offer a range of compliance solutions at The Strategic Partner, including:
- Review – A review of the firm’s approach to regulation and compliance to include AML procedures. The output of this provides the firm with a written gap analysis and solutions to remedy any issues.
- Regulation 21 AML 2017 Independent Audit – A review of the firm’s approach to regulation and compliance to include AML procedures with the audit meeting the requirements of Regulation 21 of the AML 2017. The output of which provides the firm with a written gap analysis and solutions to remedy any issues that arise and ensure the firm is compliant,
- Training– Our typical AML Training includes:
- AML Training for ALL staff to meet the firm’s obligation to provide annual training.
- 1-2-1 training for the MLRO and MLCO on their obligations and requirements.
- Practical training for those involved in client onboarding to ensure their ID and AML checks are correctly completed.
- File Reviews/Auditing – At TSP, we engage with firms undertaking file reviews where we consider your procedure, staff, systems, and files to ensure the procedures are up to the required standard and being implemented at case level with a report of the outcome.
Packaged Solutions – Implementation of robust solutions to ensure the firm achieves compliance and then maintains compliance through the provision of ongoing support and assistance: –
Get in Touch
For more information on our risk and compliance products, training service or to speak to one of our compliance team, visit our website www.thestrategicpartner.co.uk, email us at email@example.com or call us on 020 3911 9710.