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The Compliance Partner – September 2023
September 15, 2023

Introduction:

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:

  • Sanctions on legal services
  • Obligations under the Proceeds of Crime Act
  • Sectoral risk assessment as per the Solicitors Regulation Authority (SRA)
  • New SAR Portal Launch Announcement – September 18th 2023
  • Continuing competence training and maintaining training records
  • ACAS Consultation Launch on Flexible Working Code of Practice
  • CILEX Moves Forward with SRA Regulation Transition Despite Member Concerns
  • 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

Sanctions: Legal Services

Recent restrictions have been imposed on providing legal advisory services to non-UK persons under certain circumstances. It is important to note that legal advisory services are prohibited, even when the activity in question does not involve a UK person or takes place outside the UK. Understanding these new sanctions is crucial to ensure compliance and avoid any potential legal risks.

Read more about Sanctions: Legal services.

 

Guidance on Proceeds of Crime Act Obligations

Your law firm is bound by obligations under both the money laundering regulations and the Proceeds of Crime Act. Navigating these obligations can be complex, and they may differ in certain aspects. The new guidance published by the SRA is designed to help you comprehend these differences and provide you with the necessary steps to comply with both regulatory frameworks effectively. Click on the link below to learn more about these obligations and ensure your firm’s compliance.

Guidance on Proceeds of Crime Act obligations.

 

Sectoral Risk Assessment by the SRA

The SRA has released a new sectoral risk assessment, highlighting emerging risks for law firms. The report identifies potential concerns in the areas of sanctions regime, proliferation financing, introduction of new technology, and economic pressures leading firms to cut back on resources related to regulatory compliance. Stay informed about these risks and read our latest article for further insights.

Understanding Sectoral Risk Assessment by the SRA

 

New SAR Portal Launch Announcement – September 18th 2023

The National Crime Agency has announced that a new SAR (Suspicious Activity Report) Portal will be launched on September 18th, 2023. This portal will be open to all reporting organisations, and those who have not yet registered are encouraged to do so.

More details about the portal and access to it will be provided closer to the launch date. To prepare for registration and use of the new SAR Portal, firms are advised to review the supporting materials and user guides available on the website.

It is important to note that once registered, the new SAR Portal is expected to be the only reporting route for all registered firms and reporting organisations. The current SARs Online System is scheduled for decommissioning later this year.

For more information, you can visit the National Crime Agency’s website.

 

CILEx Moves Forward with SRA Regulation Transition Despite Member Concerns

The Chartered Institute of Legal Executives (CILEx) announced its intention to proceed with transferring the regulation of its members to the Solicitors Regulation Authority (SRA), despite a significant number of members expressing their reluctance to make the move.

Currently, legal executives are regulated by CILEx Regulation, which conducted a consultation among members regarding the shift in regulatory control.

Of the respondents, 68% indicated they did not consider this a priority. Despite member concerns, CILEx emphasises that the decision will be made in the best interest of the public and the profession. The consultation period ends on 5 November, and the SRA will subsequently release its own consultation on accommodating CILEX members. The transfer, if approved, will not occur before April 2024.

Read the full article here: CILEX forges ahead with SRA regulation switch

 

Compliance News Roundup

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.

 

Renewals of Practising Certificates and Firm Registration

Mark your calendars for the renewal period of practising certificates and firm registrations, which runs from 1st to 31st October 2023. The SRA has indicated that there are no new questions or changes to the forms this year, but some enhancements have been made to improve user experience.

 

ACAS Consultation Launch on Flexible Working Code of Practice

ACAS, the Advisory, Conciliation and Arbitration Service, is initiating an update to its statutory Code of Practice on handling requests for flexible working. This move comes in response to evolving workplace practices and anticipated law reform.

In light of this development, The Strategic Partner will closely monitor 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.

 

Recent Regulatory Decisions

Solicitor Agrees to Be Struck Off for Unethical Conduct

Matthew Goldborough, a solicitor, has been struck off by the Solicitors Disciplinary Tribunal (SDT) due to his unethical conduct. He instructed clients to pay fees in cash or into his personal bank account over a span of more than four years while concealing this from his employers. He also submitted client applications to the Home Office from a personal email address to hide his actions. Goldborough also received funds from clients for legal work that he never performed, admitting to dishonesty.

In one instance, a client paid him £650 in cash for legal fees, which he did not return or account for. Similar irregularities were found in other cases as well. When Goldborough moved to another firm, he received cash payments from clients without disclosing these transactions to the new firm.

The SDT approved the SRA’s decision to strike Goldborough off the roll of solicitors, and he was also ordered to pay £1,000 in costs.

You can find more details in the provided link: Read more

 

Solicitor Struck Off for ‘Threatening’ Emails Deemed a ‘Danger to the Public

Kirsten Von Wedel, a solicitor admitted in 2000 and the sole principal of Berkshire firm K Law, has been struck off by the Solicitors Disciplinary Tribunal for sending ‘threatening and offensive’ emails to a client. The tribunal deemed her actions as a ‘danger to the public’ and stated that it had a duty to protect the public by removing her from the solicitor’s roll.

The judgment highlighted instances of misconduct, including failing to redeem a client’s mortgage within a reasonable timeframe and eventually redeeming it from a foreign bank account. In another case, she failed to pay stamp duty and register a property with HM Land Registry.

Regarding the offensive emails sent to the client, the tribunal found Von Wedel’s language highly inappropriate for a solicitor. Phrases such as ‘spastick’ were described as ‘an utter disgrace,’ and other expressions were deemed ‘clear examples of threatening language.’ These emails were sent in response to the client’s legitimate inquiries and appeared to be intended to deter further questions.

In mitigation, Von Wedel explained that she had been working under severe pressure, including a hospital stay and lockdowns, amidst challenging circumstances dating back to 2014. However, the tribunal concluded that her misconduct evolved to mask her own mistakes, including misrepresentations to clients and attempts to intimidate the client into ceasing their inquiries.

As a result, Kirsten Von Wedel has been struck off as a solicitor and ordered to pay £49,001 in costs.

You can find more details in the provided link: Read more.

 

Recent Regulatory Decisions

Solicitor Personally Fined £12,000 plus Costs

With the regulator’s new fining powers and an updated approach to issuing financial penalties for proven misconduct, a recently published decision by the Solicitors Regulation Authority (SRA) is a stark reminder of the importance of stringent adherence to compliance regulations.

Proven regulatory or code of conduct breaches can result in severe sanctions and financial penalties for firms and their staff. Not meeting necessary regulatory standards can also harm a firm’s reputation. In this blog, we highlight the details of the SRA’s recently published decision regarding an investigation ruling involving Mr Mohammed Israr, who was directed to pay a financial penalty of £12,000 and ordered to pay costs of £1,350 for failing to adhere to core compliance requirements and risk procedure obligations.

Continue reading: Solicitor Fined £12,000 for regulatory breaches.

 

SRA Fines Firm Employee for Breaching Internal AML Policies, Controls, and Procedures

A law firm employee (who was not a solicitor) has been individually fined by the Solicitors Regulation Authority (SRA) for breaching obligations under Regulation 28(11)(a) of the Money Laundering, Terrorist Financing (Information on the Payer) Regulations 2017 and in doing so breaching Principle 2 of the SRA Principles 2019. The summary of the decision showed that the SRA fined the employee £3,500 plus costs of £1,350 for failing to follow the firm’s internal Anti-Money Laundering (AML) policies, controls and procedures requiring her to adequately investigate source of funds when acting for clients in two residential conveyancing transactions.

Continue reading: SRA Fines Firm Employee.

 

Sign off Page – Services

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 your approach to risk and MLR 2017 compliance needs to be reviewed, or you are concerned your Regulation 18 Firm Wide Risk Assessment needs to be updated or is not at the required standard, The Strategic Partner can assist you.

  • 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 –

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

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