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All change please

The authors of the Solicitor's Handbook 2019 discuss the major changes coming for solicitors against a background of uncertainty. 

 

Writing The Solicitors Handbook 2019  turned into a much bigger exercise than was originally anticipated. We knew we would have to grapple with major changes to the Money Laundering Regulations and data protection legislation, introduced since the 2017 edition. We hadn't quite anticipated the mammoth exercise which would result from both the Solicitors Regulation Authority (SRA) and the Solicitors Disciplinary Tribunal (SDT) throwing out their existing rule books. And not to mention the wholesale scrapping of more than a decade of case law on dishonesty following the Supreme Court's ruling in Ivey.

Naturally the uncertainty surrounding Brexit only added to the fun when we turned our attention to cross border practice – sadly, that is an issue which we have had to leave unresolved until the next edition.

We were surprised by some of the changes made by the SRA. The changes, whilst designed to enhance flexibility, remove some requirements which have evolved over many years to protect clients and client money. These requirements led to the development of systems which partners may have relied on to ensure compliance without too much thought.

Accounts Rules

All managers and Compliance Officers for Finance and Administration (COFAs) are responsible for compliance with the Accounts Rules. It is important to remember that many of our detailed rules – in particular the Accounts Rules - were drafted with a very specific purpose in mind. Careful consideration should be given to changes which are to be made. Protections have been lost and the enhanced flexibility may turn out to be a double edged sword.

Changes such as:

  • the revised definition of client money
  • abolition of prescriptive rules regarding mixed money and payment of disbursements
  • curtailed circumstances in which funds can be withdrawn from client account

may all create traps for the unwary. The ability to hold limited types of client money without maintaining a client account and to use a third party managed account may allow for increased flexibility but is untested. It is likely to result in further rules and guidance being developed as the practical impact of these provisions is assessed over time.

Compliance Officers for Legal Practice (COLPs)

Other issues, particularly for COLPs, are the transfer of the COFAs' obligations in respect of financial stability to the COLP alongside the attendant changes to the reporting regime and supervision requirements. COLPs need to ensure that they are up to speed with their new obligations which are, in the authors' view, more onerous than they have been in the past.

The new Code of Conduct for Individuals

Those solicitors not involved in the management of law firms will also need to familiarise themselves with changes to their personal obligations in relation to supervision, publicity and complaints management under the new Code of Conduct for Individuals. Much has been made of the introduction of separate Codes of Conduct for Firms and for Individuals but, in the result, the emphasis of the new Codes remains firmly on personal responsibility.

Thus, individual solicitors retain personal responsibility for a number of requirements which might have been thought to be a firm responsibility – such as:

  • ensuring accuracy of publicity
  • referral arrangements
  • identifying clients properly
  • handling complaints.

Individual solicitors are responsible for ensuring the competence of those they supervise as well as retaining primary responsibility for ensuring the quality of work done.

Reporting requirements have been altered and - in some circumstances – extended and solicitors may need to reflect on when they are obliged to consider making reports to their COLP, the SRA and other regulators.

The Solicitors Handbook 2019 contains commentary and guidance on all of these issues and more and will help every solicitor to understand their role within a vastly changed regulatory landscape.

 

Views expressed in our blogs are those of the authors and do not necessarily reflect those of the Law Society.

Explore The Solicitor's Handbook 2019 - The authoritative commentary on the new SRA Standards and Regulations

In a Practical Support Feature, our partner SIFA Professional's MD Dave Seager explains the importance of choosing the right financial advisory partners for your firm and following due diligence under the new SRA Standards and Regulations

Our Risk and Compliance Service has useful free features and podcasts to help you be prepared for the new SRA Standards and Regulations

Read more about the new SRA Standards and Regulations

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Tags: SRA

About the author

Robert Forman is an experienced Professional Discipline solicitor, with particular expertise in the field of Solicitors’ Professional Discipline & Regulation. He provides advice, support and representation for firms, individual solicitors and other legal professionals facing SRA investigation and frequently appears before the SDT. Robert provides regulatory compliance advice to compliance officers, firms, large or small, and individuals. Robert is a co-author of The Solicitor’s Handbook 2019. 

About the author

Greg Treverton-Jones QC specialises in regulatory and disciplinary issues concerning legal professionals. He has appeared in many of the leading cases on the topic, both for the regulators and respondents. Most of his work nowadays is on behalf of those facing regulatory investigations, or disciplinary proceedings. He has been described in Chambers & Partners as the leading defence advocate in solicitors’ disciplinary cases.

Greg is co-author of successive editions of The Solicitor’s Handbook (2008-2019). 

About the author

Nigel West, Partner, has specialised in defence work for solicitors facing Solicitors Disciplinary Tribunal proceedings for over 20 years. He advises solicitors and legal practices on all stages of the disciplinary process from SRA investigations to SDT proceedings and appeals. The team, led by Nigel West, is recognised as one of the leading firms for Solicitors Regulation in Chambers and Partners and is named as a Leading Individual in Professional Discipline in the Legal 500.

About the author

Susanna Heley, Partner, is a litigator specialising in regulatory law and professional disciplinary work for solicitors and other legal professionals, in addition to general commercial litigation. She has also acted for solicitors challenging the refusal of professional indemnity cover.

She regularly advises legal professionals on disciplinary and regulatory proceedings, with a focus on SRA appeals to the Court of Appeal - Chambers and Partners 2020

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