Monthly Archives: April 2012

The third edition of the SRA Handbook is now online

The SRA has released the third edition of the?Handbook after it was approved by the Legal Services Board.

Further editions of the Handbook have been necessary for a number of reasons. These included technical matters, such as some matters out for consultation and issues arising from the delayed designation of the SRA as a licensing authority for Alternative Business Structures (ABSs).

The SRA also wanted to review rules working in the new outcomes-focused regime, and hindsight has allowed the Authority to make a number of minor amendments that ensure they work in practice and accurately reflect the Legal Services Act (LSA).

One of the key changes for Edition 3 is the implementation of the SRA Handbook Glossary. The glossary contains all terms used throughout the Handbook which are shown in italics, and sets out their definitions. This will allow online users simply to ‘click’ on an italicised word to view the glossary definition.

Other amendments include clarification on conflict of interest matters overseas (where if compliance with the Code would result in a breach of local law or regulation, the outcomes can be disregarded to the extent necessary to comply with the local law or regulation) and Rule 53 on Transitional provisions has been deleted.

In the Authorisation Rules, some amendments have made rules clearer and ensure they accurately reflect the LSA. In particular, the Practice Framework Rules have been amended so solicitor involvement in a body owning a licensed body does not automatically mean the solicitor is “practising” in that body. And Rule 8.6 has been amended to ensure licensed bodies are specifically authorised by the SRA to provide immigration advice services under the Immigration and Asylum Act 1999.

There are also amendments that deal with SRA Practising Regulations to mirror existing provisions in the Authorisation Rules such as the requirement to appoint a Compliance Officer for Legal Practice and a Compliance Officer for Finance and Administration. This is necessary because the SRA Practising Regulations continue to apply to the recognition of sole practitioners, so that as far as possible the same standards of the regulation apply to the different types of firm the SRA regulates.

The current Handbook was published online in October 2011 and it underpins the SRA’s introduction of outcomes-focused regulation. The web version has been designed to be as easy to use as possible, and includes advanced search options that allow specific sections to be looked at, a quick guide to the Handbook itself and the ability to print only those sections that are needed, rather than all 500+ pages.

The online version also has a “history of” facility, so users can compare the third edition to previous copies of the Handbook.

Go to the Handbook

SRA announces COLPs and COFAs timescales and spells out senior managers? responsibilities

SRA Executive Director Samantha Barrass has?laid out the SRA?s plans for nominating and appointing Compliance Officers for Legal Practice (COLPs) and Compliance Officers for Finance and Administration (COFAs).

In a keynote speech delivered at the COLPs and COFAs Conference held at the DeVere Holborn Bars, London, Ms Barrass announced that firms would be able to nominate COLPs and COFAs from 31 May 2012, with a closing date of 31 July. The launch of the form has been delayed to take account of the late start of the PC renewals and recognitions exercise, giving the SRA more time to ensure firms did not experience difficulties with the nominations process.

Firms will be asked to complete a web-based nomination form. The delay also allowed the SRA to reflect on its approach to the COLPs and COFAs? nomination and approval process.

Fundamental to the SRA?s thinking was how to balance being both proactive and risk-based when regulating a community of 11,000 firms. It needed to consider how best to deploy its resources in support of the delivery of competent and ethical legal services.

Ms Barrass stressed that: ?Whilst the vast majority of firms place a great deal of importance on professional ethics and delivery of profession services, others may not have adequately assessed their risks, and how those risks affect their achievement of the regulatory outcomes.

“What this tells us is that a proactive, efficient regulatory regime is one where the primary responsibility for managing compliance risk lies with the firms, with particular responsibilities for the most senior people in firms. It encourages the development of a strong proactive compliance culture in firms by creating a clear formal focus for delivery of the regulatory outcomes in each firm, increasing the chances that the vast majority of firms will identify and deal with regulatory risk.?

This risk-based approach leaves the SRA to focus on those who cannot and/or will not deliver competent and ethical legal services, and on those who are capable and willing but need SRA support to manage particular compliance issues.

The SRA is also keen to stress that whilst COLPs and COFAs are the formal focus points for compliance, they will not be seen as sacrificial lambs. Senior managers will be held to account and will not be able to absolve themselves of their responsibilities. The intention is to create a firm-wide culture of compliance.

The form that firms will be asked to complete will be short but based on binding declarations by both a senior manager with authority to sign on behalf of the firm and the COLP and COFA nominees, for which the signatories will personally be held to account by the SRA. There will also be declarations relating to the Suitability Test.

The form will include:

  • confirmation that the firm has suitable arrangements in place to ensure that the COLP and COFA are able to discharge their duties, and
  • confirmation that the COLP and COFA declarations, including that the nominee has sufficient seniority and responsibility in the firm, is correct

The SRA will take a risk-based approach to checking nominations, but will go back to a subset of firms largely on a risk basis. It will also conduct some random sampling. Dedicated phone support will be available to firm managers and nominees seeking advice. COLPS and COFAs in Alternative Business Structures will still be subject to a full series of checks to ensure that they work to the same high standards as traditional law firms.

Ms Barrass?concluded: ?We expect to confirm most COLPS and COFAs by the end of October, consistent with the overall timetable although we may need to accommodate some late approvals of COLPs/COFAs, and we are currently considering this.?

See?Samantha Barrass? speech to the conference.