Presentation on theme: "The Work of the Supervision Function at the SRA"— Presentation transcript:
1The Work of the Supervision Function at the SRA Suki Gill – ManagerSue Heads – Team Leader2 October 2014
2Our Purpose To protect consumers of legal services; and Support the operation of the rule of law and the proper administration of justice.
3Who do we regulate?Solicitors – 163,015 on the Roll of which 130,812 have Practising CertificatesRegistered European lawyers, registered foreign lawyers, and exempt European lawyers – 4904Around 11,300 firms authorised by the SRA, diverse range of firm type, size, turnover and profitabilityAll owners, managers and employers of SRA regulated firmsAll these individuals need to comply with the requirements of the Handbook
4SupervisionSupervision directorate of over 100 staff based in Birmingham and LondonBroken down into:Firm – based SupervisionThematic SupervisionRegulatory Management
5Supervising firmsBuilding a different relationship with firms, where firms are willing to engage with the SRAFirms take responsibility for compliance and for achieving the right outcomes for consumersDelivering risk based, targeted and proportionate regulationEmphasising a proactive approachput our resources where the greatest risks aredetermine the approach to supervision of all firmsdetermine the intensity of supervisionassess events, complaints and intelligenceidentify trends which require greater regulatory scrutiny
6Managing RiskThe regulated community is constantly changing and evolving, so supervision needs to be responsive to:the risk a firm posesits own management and mitigation of riskits approach to, and history of, compliancethe level of constructive engagement with the SRA
7Supervision Objectives Deal with all high risk matters in a timely mannerRespond effectively to the risk of financial instabilityIdentify and respond to potential interventionsProgress major investigations and conduct issuesRespond to the risks posed by bogus firmsIncrease active engagement with firmsThematic WorkImpact of Legal Aid ReformsThe provision of advice in Asylum casesAnti-Money Laundering and financial crimeFailure to cooperate with the regulatorDispersed firmsSo what are our key objectives?As a risk based regulator it is to respond in a timely, proportionate and consistent manner to all high risk matters – that is those that we consider will have the most impact on our consumers of legal services and our regulatory objectives.An important current priority is responding to the widespread risk of financial instability affecting a number of law firms as a consequence of the financial crash, changes to legal aid payments and other factors. Firm failure provides a number of risks to clients and their assets and money and need to be managed effectively through close supervision.As I mentioned before, working with Client Protection, we need to be on top of situations, such as where we have evidence that clients money is at risk, or where a firm has been abandoned, to instigate the process of intervention. It is a strong power and one which we need to use carefully, and requires a fine balance of judgment about if or when an intervention needs to be triggered.We also have a number of highly complex public interest investigations involving high profile matters or conspiracies including organised crime.
8What concerns us most Top five risks to the regulatory objectives: Misuse of client money or assetsBogus firmsLack of diverse and representative professionFailure to provide a proper standard of serviceMoney laundering - Inadequate systems and controls over the transfer of money
9Supervisory approach & tools Engagement and investigation are not mutually exclusiveOur approach distinguishes between those firms that want to engage with us, and those that will not or cannot.Desk based engagement and visitsCompliance plansConditions on PCs, ownership and authorisationRegulatory Settlement AgreementsDisciplinary outcomes – rebukes, fine, publicationReferrals to the SDTInterventionEngagement and investigation are not mutually exclusiveEngagement – each month:75 visits3000 – s400 – 600 telephone callsinterventions60 DPs400 FI comms
10SRA enforcement : constructive ways to respond PAUL MILTON Case Manager, Legal & Enforcement2 October 2014
11How do we enforce? Based on our published enforcement strategy Encourages engagement with those who work with us to put things right but strong action where firms do not co-operate or where serious issues ariseEngagement is important even where disciplinary action takenAt heart: risk-based protection of public interest and credible deterrence
12Enforcement tools Obtaining documents and information Conditions on Practising Certificates, ownership and authorisationInternal Disciplinary sanctions – rebukes and finesReferral to Solicitors Disciplinary TribunalRegulatory Settlement AgreementsIntervention
13Constructive Responses to Enforcement Action Seek independent expert legal advice early onTell us sooner rather than later which facts and allegations are admitted; explain clearly reasons for denialsContinue to narrow the issuesTake any remedial steps you can, especially to improve clients’ positionsIf possible arrange to have legal representation at SDT hearing
14Regulatory Settlement Agreements Policy on RSAs is on our web site:Regulatory decision accepted by the solicitor on agreed termsUsually published for transparencyProportionate outcome achieved at reasonable cost in the public interest
15Regulatory Settlement Agreements The Agreement:Is in writing and signed by both partiesStates the factsContains admissions of failures to achieve outcomesIdentifies any remedial action to be takenImposes sanction where appropriate
16Possible terms of an RSA Agreed public statementImplementation of schemes for correction, improvement and restitutionPractising controlsRemoval from the Roll by consent
17In summary OFR is all about protection of clients and the wider public Not all breaches require enforcement actionCo-operation with the SRA is key - the sooner the better but never too late!Even if enforcement action taken, still sometimes possible to resolve by RSA/consent order or at least agree a statement of facts to save time and costs
18Sources of support SRA’s ethics helpline - 0870 606 2577 Solicitors Assistance Scheme (SAS) for independent advice -LawCare - advisory and support service for lawyers (www.lawcare.org.uk telephone )Other networks and groups such as the Sole Practitioners Group, The Society of Black Lawyers, Lawyers with Disabilities Division, The Society of Asian Lawyers and Association of Women Solicitors.
19Material breachesBreaches that are 'material' must be reported to the SRA as soon as reasonably practicableMechanisms for reporting:Factors to consider are :the detriment, or risk of detriment, to clientsthe extent of any risk of loss of confidence in the firm or in the provision of legal servicesthe scale of the issuethe overall impact on the firm, its clients and third partiesHave confidence in your judgement