Regulation of Law firms Flashcards
What does the SRA do?
- Authorises organisations to provide legal services
- Sets and enforces standards for solicitors
- Deals with disciplinary matters
What legal services do organisations need to be authorised by the SRA to provide?
- Reserved legal activities (unless exempt)
- Immigration services (unless regulated by OISC)
- Claims management services (unless regulated by FCA)
- Regulated financial activities (unless regulated by FCA)
What are the SRA’s powers regarding disciplinary matters?
- Issue a warning to the firm
- Impose a disciplinary sanction
- Reprimand the solicitor for professional misconduct
- Order the solicitor to repay or refund the whole or part of the costs to the client
- Impose restrictions on a lawyer’s ability to practice
- Institute disciplinary proceedings before the Solicitor’s Disciplinary Tribunal (who can strike a solicitor off the role)
- Revoke recognition of a firm
- Close down a firm
What are reserved legal activities?
Reserved legal activities can only be provided by someone authorised by an approved regulator to do so. They are:
- Rights of Audience: the right to appear before and address a court, including the right to call and examine witnesses
- Conduct of litigation
- Reserved instrument activities: including preparing any instrument of transfer or charge relating to land and other instruments relating to real or personal estate for the purposes of the law of England and Wales
- Notarial activities
- Probate activities
- Administration of oaths
What are an individual solicitor’s SRA duties?
Clients:
- Competent service (CCS 3.2)
- Keep client money safe (CCS 4.2)
- Not take unfair advantage (CCS 1.2)
- Provide information the client can understand (CCS 8.6)
Third Parties:
- Do not mislead clients, court of others (CCS 1.4)
- Duty to the court (CCS 2)
- Undertakings (CCS 1.3)
- Not take unfair advantage (CCS 1.2)
Colleagues:
- Maintain competence, keep knowledge and skills up to date (CCS 3.3)
- When supervising others: accountable for their work and effectively supervise work being done for client (CCS 3.5)
- Ensure individuals you manage are competent (CCS 3.6)
SRA
- Justify your actions to demonstrate compliance with SRA’s regulatory obligations (CCS 7.2)
- Cooperate with SRA and other regulators (CCS 7.3)
- Respond promptly (CCS 7.4)
- Report promptly any matters you believe amount to serious breach (CCS 7.7)
What are firm’s SRA duties?
CCF requires firms to have systems in place to ensure compliance and manage risk.
- Must have effective governance structures, arrangements, systems and controls in place
- Keep and maintain records
- Actively monitor financial stability and business viability
- Identify, monitor and manage all material risks to the business
- Effective system for supervising client matters
Who is responsible for ensuring compliance with CCF?
Managers:
- sole principal in a recognised sole practice
- a member of a LLP
- a director of a company
- a partner in a partnership
- in relation to any other body, a member or its governing body
Managers will be jointly and severally liable.
What is the role of the Compliance Officer for Legal Practice (COLP)?
Ensures:
- firm complies with all the terms and conditions of authorisation by the SRA
- firm complies with its regulatory obligations
- record any failures to comply and make records available to the SRA; and
- report any material failure to the SRA as soon asit practicable
Will also organise systems such as how conflicts of interest are identified and how client confidentiality is protected.
What is the role of the Compliance Officer for Finance and Administration (COFA)?
Ensures:
- firm complies with the SRA Accounts Rules 2019;
- reports any serious breaches to the SRA promptly;
- informs SRA of facts which should be brought to SRA’s attention to investigate whether a serious breach of regulatory obligations has occurred
Do firms have to have a COLP and a COFA?
Yes. The SRA requires law firms to have an individual who is designated as its Compliance Officer for Legal Practice (COLP) and an individual who is designated as its Compliance Officer for Finance and Administration (COFA) - whose designations the SRA has approved.
Possible for one person perform both roles.
BUT remember responsibility for any breach rests with the managers who are jointly and severally liable.
What are the three categories of organisations that can be authorised by the SRA?
- A sole practice
- A legal services body
- A licensable body
What is a sole practice?
Where a solicitor practices on their own account, under their own name or trading name. When the SRA authorises a sole practice it is called a ‘recognised sole practice’. If an individual is practicing though a limited company that is not a sole practice and the company itself must be authorised.
A sole practitioner can employ several qualified solicitors, as long as those solicitors are not also principals (e.g. not partners or co-owners) of the practice.
These are declining.
What is a legal services body?
A legal services body is a firm within which all managers/interest holders are lawyers. A legal services body can be a partnership, company or a limited liability partnership (LLP).
Once a legal services body is authorised by the SRA it is called a ‘recognised body’.
What is a licensable body?
One within which the managers/interest holders includes lawyers and non-lawyers - must have at least one non-lawyer interest holder. Once authorised by the SRA it is called a licensed body.
Means non-lawyers are able to share in the management and control of a business which provides reserved legal activities to the public.
An ABS can be wholly-owned by non-lawyers.
What are the priority lists for the legal profession?
- Anti money laundering
- Client money
- Diversity in the profession
- Information and cyber security
- Integrity and ethics
- Meeting legal needs
- Standards of service
