Red flags to look for when spotting financial abuse
The introduction of the SRA Standards and Regulations (StaRs) on 25 November 2019 brings with it a number of changes to the legal regulatory landscape, as set out by my colleagues in previous blogs in this series. Change is not always something we welcome with open arms, especially when busy workloads leave little time for us to take stock. This, however, is a real opportunity to do just that; review your firm’s current systems, processes and approach to complying with its regulatory obligations, and reflect on your own practice, and improve these for the better.
In the flurry of coverage on the StaRs it can be easy to lose sight of the fact that these are not wholesale revolutionary changes but rather tweaks to the existing regulatory regime aimed at making our busy lives easier. And so there is no need to panic; step back, take stock, and prioritise those necessary steps to ensure compliance post 25 November.
Below are some of our key suggestions to ensure your house is in order.
As outlined by my colleagues Iain Miller and Jessica Clay, the launch of the StaRs will see the introduction of two Codes of Conduct, one for firms and one for individuals, with an overarching set of seven Principles.
The main take away from the changes is that the Principles comprise the fundamental tenets of ethical behaviour which the SRA now expects all those it regulates to uphold, including employees of an authorised firm who are non-solicitors. Further there has been a widening to the scope of the Principles with all these applying not only inside but, where appropriate, also outside of your practice (i.e. in your private life).
A key step is to ensure you have issued compulsory training to all your staff on the key changes brought in by the StaRs. This training should outline: 1) the seven overarching Principles themselves; 2) what these require; and 3) their scope and application.
As part of this training, regulated persons should be directed to review the new codes of conduct so that they understand both their ethical and professional obligations in full and understand that they will be accountable for their actions. It is also worth emphasising to your non-solicitor staff that the SRA can still seek to take regulatory action against them through the Code for Firms where their conduct falls significantly below the Standards set out. The SRA’s Enforcement Strategy and associated topic guides should also feature in any training programme and a similar direction given for these to be considered in full.
As outlined previously in our blog series, the changes to the reporting obligations brought in by the new Codes of Conduct are without doubt one of the areas keeping everyone on their toes.
Whilst we still await further guidance from the SRA on this difficult topic, the changes and the widening of these obligations should be a focus area for any training programme. The training on this topic should:
cover the importance of keeping records of decisions made as part of any consideration of whether or not to report. The importance of keeping records generally from 25 November has been addressed in a previous blog in our series;
remind individuals to whom they should report concerns; and
Simplified Accounts Rules will also come into force as of 25 November and any training programme should cover the key changes introduced. Our previous blog in this series provided an overview of the high level changes introduced and what this could mean for you.
The SRA’s clickable logo (referred to as the ‘digital badge’ in the SRA Transparency Rules) is provided via software which will make sure only SRA regulated firms can display it. The SRA website explains:
‘the logo will show online visitors that you are regulated and provide them with a link to information on the protections this provides. Displaying the logo will help you differentiate yourself from unregulated providers.’
Use of the logo is currently voluntary but come 25 November 2019, this will become mandatory. The SRA provides online resources in relation to the clickable logo and guidance on how to obtain this which can be found here.
As with the recent price transparency requirements (see below), the SRA has said they plan to carry out a random sweep to monitor compliance with this compulsory requirement going forward. Ensuring the logo is displayed on your website from 25 November should therefore be a priority in the coming days.
Julie Norris and I commented earlier this year on the SRA’s first web sweep which took place during March/April 2019 to monitor compliance with the SRA Transparency Rules which came into force on 6 December 2018. Since these Rules came into force, firms who publish that they work in certain areas must display price and service information while all firms must publish their complaints procedure. The results of the first web sweep showed notable levels of non-compliance.
On 30 October 2019 at the SRA’s annual compliance conference, Richard Williams, a policy associate at the SRA, confirmed that a second sweep will be carried out before the end of the year. Reports from this event state that he commented that this area, ‘has the full gaze and full vision of the SRA at the moment.’
Whilst price transparency is already in train, the SRA’s imminent second web sweep will inevitably, it seems, involve a dual check, also checking compliance with the ‘clickable logo’ requirement detailed above. Non-compliance in either or both of these areas is a risk that can be easily avoided by considering the requirements and taking the necessary steps to implement them. The SRA has previously hinted at the possibility of it taking enforcement action should non-compliance with the Transparency Rules continue. This very much emphasises the need to pay particular attention to these compulsory areas in the coming days.
Should you require any assistance in embarking on the steps required to ensure your house is in order post 25 November, we are, of course, here to help.
Charlotte Judd is an Associate Solicitor in the Regulatory department. She assists and advises on matters spanning the department’s three core service areas, namely legal services regulation, defending regulated individuals, organisations and corporates and advice for regulators and public bodies .
 Residential conveyancing, uncontested probate, motoring offences (summary offences), immigration (excluding asylum), employment tribunals (unfair/wrongful dismissal), debt recovery (up to £100,000), and licensing applications (business premises)
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