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Legal Services (V) > Regulatory role of SRA > Flashcards

Regulatory role of SRA Flashcards

1
Q

What is the apprved regulator empowered to authorise solicitors and firms to carry out reserved legal activities?

A

SRA

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2
Q

Who oversees SRA?

A

Legal Services Board (LSB)

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3
Q

What is the duty of LSB in exercising its functions?

A

To promote regulatory objectives:
* protecting and promoting public interest
* rule of law
* acccess to justice
* interests of consumers
* promoting competition
* indepdependent, strong, diverse profession
* undertanding of citizen’s legal rights
* professional principles
* prevention of economic crime

These objectives are passed onto SRA

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4
Q

Purpose of SRA’s regulation?

A

Dual:
* protect consumers of legal services
* support operation of rule of law and proper administration to justice

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5
Q

What does it mean that SRA takes risk-based approach to regulating firms?

A

Do not set prescriptive rules but encourage firms to set own standards and ensure compliance (after setting out regulatory framework)

SRA focuses on misconduct most likely to harm public interest

Potential Harm + Likelohood

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6
Q

Does SRA expect firms to engage in their own risk management?

A

YES, Code of Conduct for Firms requires a firm to identify, monitor and manage all material risks to its business.

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7
Q

To what 4 categories of people do individual lawyers have duties to?

A
  1. Clients - 7 principles, CCS obligatinos etc.
  2. Third parties - uphold confidence in profession, duty to act public generally as well as court
  3. Colleagues - maintain competence and adequate supervision
  4. SRA and other regulators -cooperate with SRA and ensure they can justify their actions
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8
Q

Who is responsible for ensuring compliance with the CCF?

A

‘Managers’ = sole principal in a recognised sole practice, partners/members of LLP, directors of company, partner in partnership

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9
Q

What two roles must firms appoint and what is their job? Must they be different people?

A

COLP (Compliance Officer for Legal Practice) = comply with regulatory obligations and record failures to do so
COFA (Compliance Officer for Finance and Administration) = comply with SRA Account Rules and report serious breaches to SRA

One person can perform both roles (for small firms)

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10
Q

What is PII and why must firms take it out?

A

Professional Indemnity Insurance - provides cover for firm and clients, pays out claims from clients or TPs

Minimum levels specified in SRA

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11
Q

What is minimum level of PII for recognised & licensed bodies?

A

At least £3 million

Recognised bodies: partnership, LLP, company.
Licensed bodies: ABS.

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12
Q

What is minimum level of PII in all other cases?

e.g. Reconised sole practice

(except recognised bodies and licensed bodies)

A

At least £2 million

recognised sole practice

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13
Q

‘Adequate and appropriate’ insurance

A

Solicitor is required to take out ‘adequate and appropriate insurance’.

E.g. if solicitor is dealing with a high value estate, cover will need to be in excess of minimim.

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14
Q

Exceptions for obligation to have ‘adequate and appropriate’ insurance?

Aka solicitors working outside authorised firms

A

Freelance solicitors and solicitors in non-commercial body (eg charity) only have this obligation if they provide reserved legal services to public.

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15
Q

Does indemnity absolve solicitor from liability in negligene?

A

NO!

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16
Q

Solicitor firm working in real estate oractice dealing with properties valued at around £5 million but not exceed £10,000 milliom.

How much indemnity insurance?

A
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17
Q

When can a solicitor work as a freelance solicitor?

Working outside authorised firms

A

If authorised as a sole legal practice or falls within exceptions:

Exceptions:
* their practice consists entirely of activities which are not reserved legal activities
* any reserved legal activities are provided through an authorised body; or
* solicitor practiced for a minimum of 3 years, self-employed, practice in their own name, has indemnity insurance, not employ anyone and only holds limited categories of client money.

Even though authorisation is not required, must inform SRA of intention to practice and SRA will place his details on public register.

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18
Q

In-house solcitors

Working outside authorised firms

A

Can only deliver reserved legal activities to their employer, but not general public.

BUT: in-house solicitor is to provide reserved legal activities such as pro-bono to public

Must ensure chairty has adequate and appropriate insurance.

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19
Q

Non-commercial organisations (charities, trade unions)

Working outside authorised firms

A
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20
Q

Who can limit liability below £2 million in PII?

A
  • Only freelance solicitors; and
  • Solicitors working in non-commercial firms

can exclude/limit liability below minimum set by SRA

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21
Q

What firms/when need to have PPII?

A

A firm must have a qualifying insurance in place at all times.

22
Q

When must organisations get their legal services business authorised?

A

If they provide any of the following:
1. Reserved legal activities
2. Immigration services (unless regulated by OISC)
3. Claims management services (unless regulated by FCA)
4. Regulated financial activities (unless regulated by FCA)

23
Q

Will a business who only provides non-reserved legal activities never be authorised?

A

Does not need to be - but may choose to be authorised to reassure clients its practice has protections that arise from being authorised by SRA e.g. requirement to have specific level of PII

24
Q

What is a sole practice? Is it only one person?

A
  • Solicitor practices on own account and provide services under own/trading name; sole principal
  • Can employ several qualified solicitors as long as they are not also principals

NOT a company

Less common nowadays - profession more specialised and indemnity insurance gone up

25
Q

What is the difference between a legal services body and a recognised body?

A

Legal services body = a firm within which all managers/interest holders are lawyers (partnership, company, LLP)
Recognised body = legal services body once authorised by SRA

26
Q

What is the effect of authorisation on recognised body?

A

One authorised a recognised body is entitled to carry on all reserved legal activities (except notarial).

27
Q

What is the effect of authorisation on licensed body?

A

Entitles to carry out same ac tivities as recognised body (i.e. reserved legal activities).

28
Q

Is solicitor working in a multidiscprilnary ABS obliged to adhere to CCS and CCF when carrying out non-legal work?

A

Yes, SRA does not regulate non-legal activities but SRA requires authorised bodies (such as ABS) and authorised individuals (solcitiors) to comply with SRA’s regulatory arrnagements.

SRA’s authorised individuals and authorised firms carrying out non-legal activities are subject to SRA regulation, and as such solicitor (who is SRA approved & authorised) working for an ABS (which is SRA approved (authorised) entity) must adhere to respective codes of conduct when conducting both legal and non-legal work.

29
Q

What is a licensable body? How many non-lawyer managers must it have?

AKA alternative business structure (ABS)

A

Body within which managers/interest holders include both laywers and non-lawyers (must have at least one non-lawyer manager).

ABS is an authosied body.

ABS is not wholly owned at hands of legally qualified individuals.

Intro of ABSs to the legal services market = non-lawyers are able to share in the management and control of businesses which provide reserved legal activities to the public.

Permits a non-lawyer - e.g. director of finance and administration - to own shares in an incorporated law firm or share the profits of a partnership, as well as having voting powers.

30
Q

How can ABS be authorised?

Authorised as a licensed body

A

To apply for authorisation as a licensed body, ABS must have **at least one manager who is authorised by SRA ** (solicitor) or another approved regulator (e.g. converyancers).

It also has to eb a ‘licensable body’: have a non-authorised person (non-authorised by SRA or other regulator) as:
* manager; or
* interest holder
Or, alternatively:
* another body A is a manager
* non-authorised persons are entitled to exercise or control at least 10% of voting rights in A

31
Q

Do law centres/legal advice centres need to be authorised by the SRA? Must pro bono work be covered by indemnity insurance?

I.e. places that give legal advice and undertake casework for free

A
  • Not if they do not provide reserved legal activities (but must be authorised if they do e.g. litigous debt claims!)
  • A solicitor must still comply with CCS even if unpaid
  • Pro bono work must be covered under indemnity reasonably equivalent to that required under SRA indemnity insurance rules
32
Q

Must in-house practices be SRA authorised?

A

No - but solicitors must comply with CCS standards

33
Q

What is the status of multinational law firms and the SRA codes?

I.e. firms operating both inside and outside E+W`

A
  • Foreign lawyers practicing in E+W required to comply with CCS, SRA etc.
  • SRA regulated individuals/authorised bodies practicing in offices outside E+W must comply with SRA Overseas Rules
34
Q

What requirements in the CCS and CCF ensure that legal professionals address the risks to integrity of the legal profession?

A

Keep client money safe
Do not take unfair advantage of clients
Ensure solicitors’ instructions reflect client wishes
Address EDI
Provide clear complaints procedure
Provide clear information that client can understand about service they receive and how much it will cost

35
Q

What must you do when supervising or managing others providing legal services?

A
  • Remain accountable for the work they carry out
  • Effectively supervise work done for clients
36
Q

Must someone supervising client files be legally qualified?

A

No - as long as they have suitable experience, knowledge and competence to deal with potential issue and they have clear guidance re when/to whom issues outside their authority should be referred upwards they are permitted to supervise client matters

37
Q

What are the roles of the COLP (Compliance Officer for Legal Practice) and the COFA (Compliance Officer for Finance and Administration)?

A
  • COLP = ensure firm complies with all T&Cs of authorisation by SRA/statutory obligations, record failures to comply with authorisation and make available to SRA, and report any material failure to SRA as soon as is practicable
  • COFA = ensure firm complies with Accounts Rules and reports breaches of such to SRA promptly
38
Q

Do COLPs and COFAs report breaches to the managers or to the SRA?

A

SRA

39
Q

What type of system must COLPs and COFAs put in place?

A

Not prescribed - requirements vary depending on size and type of firm

But most will implement risk/financial management policy

40
Q

What is the criteria for being a COLP or COFA? What must a COLP be in particular?

A
  • Be a manager or employee of authorised body
  • Consent to designation
  • Not be disqualified from acting as a Head of Legal Practice
  • For COLP: be an individual authorised to carry on reserved legal activities

Manager = sole principal, member of LLP, director of company, partner in partnership

Authorised body = body licenced by SRA to practice as a licensed body/SRA-recognised sole practice

41
Q

Must the COLP and COFA always be different people?

A

Can be same person provided they have necessary skills and meet criteria, but likely that this will only be the case for sole practicioners and some small firms

42
Q

Do COLPs and COFAs have sole responsibility for compliance?

A

No - compliance is ultimately the responsibility of owners/managers of firm (managers have responsibility for compliance by firm with CCF) who share responsibility joint and severally

But COLPs and COFAs still have pivotal functions in their organisation

I.e. if a COLP/COFA decides not to take any further action after you alert them of serious breach, you should still pursue matter further

43
Q

What will the COLP generally be responsible for with regard to the CCF?

A

Ensuring that appropriate systems in place to minimise risk of non-compliance with CCF i.e. clear and effective governance structure.

44
Q

What systems must the firm/COLP implement?

A
  • How conflicts of interest are identified
  • How client confidentiality is protected

Ultimately obligations on firm but most delegate to COLP (day to day)

45
Q

When will a:
* Sole principal
* Other manager
not have to be approved by SRA?

A

No - there are exceptions:
1. Sole principal whose practice has been authorised as a recognised sole practice is not requird to be approved as a manager of that practice
2. When the SRA is satisfied that the manager of authorised body is not involved in: day to day strategic management of body; compliance with SRA’s regulatory arrangements; or carrying on reserved legal activities or provision of legal services in E+W

46
Q

A firm must have at least one manager or employee or must procure the services of an individual who is and does what?

A
  • A lawyer of E+W and has practiced as such for at least 3 years; and
  • Supervises the work undertaken by the authorised body

Important in ABSs’ - owners required to employ at least one lawyer wo is qualified to supervise ABS’ reserved legal activities (as non-lawyers should not be responsible for overall supervision of reserved legal activities

47
Q

How to be a qualified solicitor?

A
  1. Admitted as a solicitor; and
  2. name on the roll; and
  3. have a practising certificate issued by Law Society

Anyone who does not complied = unqialified person.
Cannot practice as a solicitor = criminal offence.

Anyone acting as a solicitor must have a practising certificate.
Requirement applies irrespectie of whether solicitor will be carrying out reserved legal activities!

48
Q

What does practising solicior entitle solicitor to do?

A

Carry out all reserved legal activities (except notarial).

Solicitor have right of audience but need seperate qualification for highest courts.

49
Q

Do reserved legal activities by solicitors need to be provided only through an authorised body?

A

YES, solicitor can only use his certificate to carry out all types of reserved legal activities via authorised body (firm), not alone as he wishes.

50
Q

What does an applicant need to disclose on appplication to admission?

A

Must disclose all matters, wherever they have taken place (overseas incl), which are relevant to assessment of character and suitability.

  • Most serious (likely refused): convictions of criminal offence, dishonesty, fraud, perjury, sexual offences, caution from police.
  • Serious (may refuse): caution accepted, crim offence.
  • Other types of behaviour (will take into account): dishonest/violent/harassing/discrimination, deliberate assesment offence (plagiarism/cheating), deliberate finance offence (avoiding debts), subject to serious disciplinary/regulatory finding.

Legal Services (V) (3 decks)

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