Compliance and Regulation Newsletter
The Strategic Partner is a knowledge hub, consultancy, and service provider for law firms, Professional Indemnity Insurers and those who interact with the Legal industry. Our focus is to provide quality services to all clients, enriching their businesses with our knowledge and expertise and becoming an integrated and valuable asset.
In the first issue of “The Compliance Partner” our compliance and regulation newsletter, we look at some of the most recent events regarding risk, regulation and compliance affecting the legal industry.
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Earlier this month we highlighted the SRA’s crackdown on firms not complying with the transparency code. The SRA has given firms ample time to adhere to the requirements and is now giving stern warnings to those who have failed to comply with the update, and they will be tackling over a thousand firms that are not compliant over the coming weeks to ensure that the sector is up to standard.
The real issue here is not just failure to comply with the transparency rules but if your firm cannot get this right, it may raise questions on what else in the firm is non-compliant.
In a recent case, the Solicitor Disciplinary Tribunal fined a solicitor for failing to carry out adequate customer due diligence on the proprietor of a property and therefore breaching SRA Principles. The solicitor failed to obtain instructions from the proprietor and ensure they had agreed to the transfer of property. The proprietor was incarcerated at the time of the transaction when the property was being transferred to the proprietor’s mother.
The solicitor stated it did not cross his mind that the mother could not be relied on “to act properly” in respect of her son transferring the property by way of gift. If it was not for the solicitor choosing to take an early retirement, he could have faced severer disciplinary action. This case is a clear example of how important it is to carry out customer due diligence and obtain proper instructions. This is the bare minimum requirement in any transaction, but in this instance, the solicitor did not comply. In order to ensure your firm avoids this type of risk, it would be important to incorporate a firm-wide policy in terms of customer due diligence and ensure staff adhered to it. To read the full judgment click here
A Politically Exposed Person (PEP) is an individual who is in a prominent public position or is exposed to individuals in the government, law enforcement or public body. These individuals often present a greater risk for involvement of bribery and corruption due to their position or connections, as well as having access to facilities where money laundering is possible.
It is important for firms to provide training to staff and incorporate a firm policy on how to recognise a politically exposed person. Try out this little quiz to see if you can recognise a PEP.
A junior solicitor who was struck off the roll after she left confidential documents on a train has been allowed to have her case reheard. The junior solicitor will now get her case reheard by a new panel of the Solicitors Disciplinary Tribunal after the SRA allowed for her original decision to be quashed and her matter to be reheard based on new medical evidence. This is unique in the sense that the SRA has allowed for the decision to be quashed. Read more about it here.
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