Trinity Indemnity now working with Audit Compliance Ltd
/in Accounting, Insurance, SRA/by ACLAdminWe are delighted to announce that Trinity Indemnity is working closely with Audit Compliance Ltd in preparing specialist products for the legal sector.
Trinity Indemnity is now an AR of Bluefriars Brokers and is registered with the Financial Conduct Authority Reference number: 791358
SRA focuses on high standards in shorter Handbook
/in Uncategorised/by Paul WilkinsonSRA focuses on high standards in shorter Handbook
27 September 2017
The Solicitors Regulation Authority (SRA) is proposing a second phase of changes to its rules for solicitors to make them simpler and more focused on high standards, reducing the length of its Handbook by more than 300 pages.
The SRA’s Handbook sets out the standards it expects solicitors and firms to meet and the rules they should follow. The SRA has already consulted on the first phase of changes to create a simpler code of conduct and accounts rules. It is now consulting on its other rules, including how it approves firms, and assesses the suitability of those entering the profession.
The new Handbook is set to be around 130 pages and would keep rules that help maintain high professional standards, such as the need for compliance officers in all firms. However, it would get rid of some restrictive rules that add cost without sufficient public benefit. Changes include removing:
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- the need for early checks on students and trainees, so that character and suitability testing is focussed on point of entry to the profession
- the need for a solicitor owner or manager to seek SRA approval before moving firms or roles. In future, they will inform the SRA
- the, often misunderstood, rules around being ‘qualified to supervise’, which do not provide any guarantee of competence, but prevent solicitors establishing their own firms once they have qualified.
The SRA also proposes allowing a solicitor to provide reserved legal services, in certain circumstances, on a freelance basis to the public. They would not be able to hold client money or employ people, but would need appropriate indemnity insurance. This would simplify the current situation where there is a complex series of exemptions for solicitors who want to work in areas such as certain insurance services, law centres and doing pro bono.
Other changes aim to make the Handbook easier to use. For instance, the details of how people can appeal SRA decisions are now all grouped in one place.
The consultation also includes a revised enforcement policy. It aims to provide more clarity about how, and when, the SRA will, or will not, enforce. Factors it would take account of when considering action include intent, harm caused, patterns of behaviour, vulnerability of the client, seniority of the solicitor, and any remedial action taken.
The policy reflects the findings of the SRA’s ‘Question of Trust’ campaign which collected the views of 5,400 members of the public and profession. In keeping with the results, the SRA will continue to treat offences such as misuse of client money, dishonesty and criminal activities as the most serious.
Paul Philip, SRA Chief Executive said: “This is a simpler Handbook with a sharp focus on what matters – high professional standards and appropriate public protections.
“Pages of complex bureaucracy do not benefit anybody. Our approach rightly puts the onus on professional judgement and ethics. Most solicitors do a good job and earn the trust people place in them. But a small minority do not. Our enforcement policy makes clear when and how we will act if things go wrong. It is essential that both the public and the profession can have confidence that we hold solicitors to account and act in a fair way.”
The consultation also includes proposals for transitional arrangement for the introduction of the Solicitors Qualifying Examination (SQE). This is set to be introduced in autumn 2020. All those starting the qualification process from then onwards must take the SQE. However, the SRA wants to make sure that those who have started the process of qualification through the current routes have a fair opportunity to complete it. They will have until 2031 to qualify this way.
The consultation Looking to the future: phase two of our Handbook reforms runs until 20 December. As part of this programme of work, the SRA is also consulting on publishing better information to help the public make legal choices. The consultations are available at: www.sra.org.uk/consultations
Solicitor helped himself to money in client account after ‘tidying -up” exercise
/in Accounting, SRA/by ACLAdminA solicitor who helped himself to client money while carrying out what he claimed was a “tidying-up” exercise of historic client account balances has been struck off by the Solicitors Disciplinary Tribunal (SDT).
The tribunal decided [1] that Vernon Burke’s actions showed a “lack of moral soundness, a lack of rectitude and no adherence to an ethical code”.
It said Mr Burke had “maintained that bills had been sent out but had provided no evidence to support this assertion and he had not been believed in this regard”.
Acknowledging that this was a “sad case”, the SDT went on: “If the tribunal did not strike the respondent off, there was risk of harm to the public, not from the respondent who the tribunal considered would have learnt his lesson, but from the message that would be sent to the profession that it was acceptable to help oneself to small amounts of client money if subsequently it was repaid.”
The tribunal said client money was “sacrosanct” and had to be safeguarded.
Mr Burke, 57, was a sole principal, practising family law from Bridge Burke Solicitors in Kingston, Surrey, since 2005. He qualified in 1992.
The Solicitors Regulation Authority (SRA) found out in 2015 that the firm’s accountant’s report had been qualified the previous year for having debit balances on client account. An investigation was launched and Mr Burke was referred to the tribunal last autumn.
The tribunal said Mr Burke was not a “credible witness”, and was “evasive” in his oral testimony, often failing to answer the questions he had been asked.
There were “stark inconsistencies” in his evidence, which the tribunal described as “wholly unconvincing”.
Mr Burke was found to have acted dishonestly and with a lack of integrity when he “cleared off residual balances on client accounts to a total value of £3,826 by issuing bills of costs and paying them from client funds when there was no proper justification to do so and without first sending those bills or other written notifications of the costs to the relevant clients”.
The tribunal said a “solicitor of integrity did not clear off residual balances, however small, without first taking steps to be absolutely certain he was entitled to the money”.
If there was no evidence on the files, he would “simply rely on his memory as to the work he thought he had done for each client”.
The SDT said that Mr Burke had argued that 17 bills were sent as part of a “tidying-up” exercise, but it found that the evidence did not support this – all the bills were for precisely the amount on client account and marked as paid the day after they were raised.
Everything pointed to the raising of the invoices as being a “paper exercise”, it found.
“Had this been a genuine ‘tidying-up exercise’, then an honest solicitor looking at his residual client balances and determining what could be billed would take steps to assure himself that the monies were due and would also have ensured that the bills were sent to the clients.”
The invoices were all reversed during the SRA’s investigation, but Mr Burke argued that this was about returning to a “state of compliance” rather than an admission of dishonesty,
Mr Burke admitted the other three charges against him, primarily improperly withdrawing a total of £47,205 from client account mainly as a result of transfers being made by the firm in excess of funds held by the client, although the withdrawals were all eventually rectified.
He also admitted failing to carry out reconciliations and operating two suspense ledgers in breach of the accounts rules.
On sanction, the tribunal said the mitigating factors were that once the SRA investigation had started, the “loss to the clients was made good”, and the misconduct was a “single episode in a previously unblemished career”.
However, an allegation of dishonesty had been proved against Mr Burke and there were no exceptional circumstances. It ordered that he should be struck off and pay £21,000 in costs.
Lawyers face prosecution over financial sanctions compliance
/in Accounting, AML, News, SRA/by Paul WilkinsonLawyers are among those who could face prosecution if they fail to report information that could undermine UK financial sanctions, after a change to the law [1] that came into force this week.
“Independent legal professionals”, along with trust or company service providers, accountants and others are now captured by the European Union Financial Sanctions Regulations 2017.
The existing regulations already placed an obligation on businesses to report to the Treasury if they were acting for anyone subject to financial sanctions, but until Tuesday enforcement action could only be taken against financial services firms.
Those caught by the new regulations will commit an offence if they fail to inform HM Treasury if they know or have reasonable cause to suspect that a person has committed an offence under the relevant regulations – such as dealing with funds that must be frozen or activities that circumvent an asset freeze – or is a person who is the subject of an asset freeze.
There are sanctions placed on people and entities from 25 countries around the world – from Afghanistan to Zimbabwe – plus ISIS and al-Qaeda.
Crispin Passmore, the SRA executive director for policy, said: “The new financial sanctions regulations mean legal firms are obliged to comply with the reporting regime. These regulations, and the approaching Financial Action Task Force inspection, are further reminders of the importance the UK and global community places on tackling terrorist financing.
“Risks exist for every single solicitor and law firm whether conveyancing on the high street or handling global transactions, and each should be thinking about their responsibilities for tackling these issues.”
Guidance [2] from the Office of Financial Sanctions Implementation (OFSI) said lawyers are not required to provide information that is subject to legal professional privilege.
But it continued: “OFSI expects legal professionals to approach their disclosure obligations with rigour and carefully consider where legal professional privilege applies, and to what information.
“OFSI will challenge any blanket claims of privilege where we are not satisfied that such careful consideration has been made.”
Paul Wilkinson
Managing Director
Audit Compliance Ltd
paul.wilkinson@auditcompliance.co.uk
www.auditcompliance.co.uk
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