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The Compliance Partner – November 2023
November 28, 2023


Maintaining up-to-date knowledge and adherence to regulatory changes is crucial for the seamless operation of your practice. In this edition, designed to provide you with useful updates, insights, and resources, we cover various significant topics such as:

  • Legal Ombudsman highlights importance of transparency pricing information.
  • SRA Contemplates Automatic Fines for Money-Laundering Regulation Failures.
  • Extension of fixed recoverable costs – client costs information.
  • ACAS Consultation on The Draft Code Of Practice On Handling Requests For A Predictable Working Pattern.
  • Continuing Competence and Training.
  • Firms Still Failing to Meet Transparency Requirements.
  • A review of recent disciplinary cases.

In addition, we spotlight a selection of recent articles published by The Strategic Partner, strengthening your resources for industry guidance.

Compliance News Roundup

Legal Ombudsman Highlights Importance of Transparency Pricing Information.

The Legal Ombudsman (LeO) has recently updated its guidance for lawyers, highlighting the importance of transparent communication regarding ongoing costs. The renewed focus is in response to a significant number of recent complaints related to lawyers’ bills, with clients being dissatisfied with how costs were communicated to them. The guidance reiterates the unchanged position that clients should never be ‘surprised’ by their bills and introduces additional details on the Legal Ombudsman’s view of good costs service. It emphasises the significance of providing clear and quality cost information, especially considering the stressful nature of many legal situations.

For more details, you can access the revised guidance from the Legal Ombudsman here.

Read our guidance on the announcement here: Legal Ombudsman Warms Firms To Be Clear On Pricing In Revised Guidance

SRA Contemplates Automatic Fines for Money-Laundering Regulation Failures

The Law Society Gazette recently published a notice suggesting that the SRA might extend automatic fixed penalties to anti-money laundering (AML) regulation breaches. Currently, firms can be fined fixed amounts for not cooperating with document requests or failing to meet transparency requirements. However, this new proposal aims to encourage firms to prioritise AML compliance and address the issue more effectively. Additionally, the regulator has announced plans for additional inspections of law firms in the upcoming weeks, with investigators wanting to see proof of relevant and functional risk assessments.

SRA Contemplates Update to Automatic Fines.

Extension of Fixed Recoverable Costs – Client Costs Information

Changes to the fixed recoverable costs regime came into effect at the start of November. You might need to review the costs information you give to clients, including how they might need to cover any shortfall, or circumstances where they might be responsible for the other side’s costs.

Read more about: Extension of fixed recoverable costs – client costs information

ACAS Consultation on The Draft Code of Practice on Handling Requests for a Predictable Working Pattern

ACAS, at the request of the Department for Business and Trade, is developing a new statutory Code of Practice to guide workers in requesting predictable working patterns under upcoming legislation. This includes drafting non-statutory guidance to complement the Code. The consultation draft, shaped by input from employer and worker representatives, is open for feedback.  aims for a clear and effective Code to aid compliance and promote good workplace practices. The draft Code outlines principles like allowing workers to bring a companion to request discussions and requiring organisations to provide reasonable explanations for decisions. All are invited to contribute to this consultation to enhance the final Code.

Read more about the consultation and respond

The Strategic Partner is closely monitoring the consultation process and the guidance ACAS produces. Once the reform has taken place and ACAS releases the updated Code of Practice, our compliance teams will promptly update the flexible working policy for those firms who use our compliance services. This consultation closed on 6 September 2023. ACAS are in the process of reviewing responses.

Continuing Competence and Training

To comply with the regulator’s Code of Conduct for Solicitors, RELs and RFLs, all solicitors must maintain their competence to carry out their role. This means they must keep their professional knowledge and skills up to date. This obligation applies to all solicitors with a practising certificate, whether working in the UK or overseas. We want to remind all our member firms using our compliance services to notify The Strategic Partner of any training courses attended to ensure continuing competence records are kept up to date for the training period.

Firms Still Failing to Meet Transparency Requirements

The transparency regime, initiated by The Solicitors Regulation Authority in 2019, aimed to enhance openness in the legal sector by requiring firms to disclose specific information. However, according to a recent article in the Law Society Gazette, many law firms are still not fully complying with the transparency rules set out by the regulator. A Year Three evaluation of SRA Transparency Rules, carried out by independent consultancy Economic Insight Limited, found that only 42% of firms claimed to publish all the information required by the regulator.

Continue reading by clicking the link below:

Thousands of Firms Still Failing to Fully Comply With Transparency Rules

Recent Regulatory Decisions

National Law Firm Fined Over £100,000 for Failing to Comply with AML Regulations

A large national law firm has been fined over £100,000 plus £1,350 in investigation costs by the Solicitors Regulation Authority for failing to comply with anti-money laundering (AML) regulations. The fine, the fourth largest ever sanctioned by the SRA, was imposed despite no evidence of money laundering or financial crime. During the investigation, the SRA identified several areas of concern in relation to the firm’s compliance with the Money Laundering, Terrorist Financing (Information on the Payer) Regulations 2017 (MLRs 2017), the SRA Principles 2011, and the SRA Code of Conduct 2011.

SRA Fines National Firm Over £100,000 For AML Compliance Failures

SRA Fines Firm £3,800 Plus Costs for Compliant Risk Assessment and AML Failures

In a recent decision published by the SRA, a firm has been fined £3,800 and ordered to pay costs of £1,350 for multiple breaches of the Money Laundering, Terrorist Financing, and Transfer of Funds Regulations between June 26, 2017, and February 16, 2023. The misconduct included, failure to have a compliant firm-wide risk assessment and neglecting to document client/matter risk assessments, perform adequate customer due diligence, and carry out enhanced due diligence.

It was decided that a financial penalty was an appropriate and proportionate sanction. The firm accepted these failings and has agreed to the financial penalty and costs order.

Read our blog in full which highlights areas of the misconduct and issues raised.

Another Firm Fined For Compliant Risk Assessment and AML Failures

Solicitors Struck Off the Roll For: Lack of Integrity, Misappropriation of Client Account, Recklessness, Solicitors Accounts Rules 2011, SRA Authorisation Rules, SRA Principles 2011, SRA Principles 2019

In a recent case brought forward by the Solicitors Regulation Authority Ltd (“SRA”), Ms Lee, the First Respondent, and Mr Syms, the Second Respondent, and directors of Lee Syms Ltd, faced allegations of serious misconduct. The SRA outlined several instances of non-compliance during their tenure at the firm. Between September 10, 2015, and November 25, 2019, the respondents failed to ensure that unpaid professional disbursements, received as Statutory Monthly Payments from the Legal Aid Agency on settled cases, were paid within the stipulated 28 days. Instead, these funds were utilised for the firm’s operational expenses, resulting in a significant cash shortage of £263,508.45. This action breached various SRA rules and principles, including Rules 6.1 and 19.2 of the SRA Accounts Rules 2011 and Principles 2, 6, 8, and 10 of the SRA Principles 2011.

Each respondent admitted to the allegations made against them, acknowledging recklessness in certain instances. In light of their admissions, they have accepted that they should be struck off the roll of solicitors.

The Tribunal Ordered that the Respondent, SAMANTHA ANNE LEE, solicitor, be STRUCK OFF the Roll of Solicitors and it further Ordered that she do pay the costs of and incidental to this application and enquiry fixed in the sum of £6,582.88

The Tribunal Ordered that the Respondent, HENRY CHARLES ADRIAN SYMS, solicitor, be STRUCK OFF the Roll of Solicitors and it further Ordered that he do pay the costs of and incidental to this application and enquiry fixed in the sum of £6,582.88.

You can find all information by following the links below:

Other Notable Articles

You can view and download the PDF of this article here. 

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