Written and recorded by Trevor Hellawell, ExL Practice Development
Hello and welcome to this data law. Whether now on cults, new rules and responsibilities, my name is trouble. Hello. Well, I'm a solicitor. I apologize. High hopes he had toys as a child. Blame my parents, of course, but I have been spending the bulk of my professional career on the training and consultancy circuit, talking to a wide range of audiences about a wide range of compliance related matters. And clearly that brings me to a conversation about the cult. There are a few things I just wanted to cover off in this session who can be a cold. What the ethos and the statutory obligations are on more vertically. What is the role of the cope? You know what we actually have to do on a daily basis? I obviously want to look at the common issues and errors which we should be picking up both internal and external. And in that regard, I just wanted to mention the code of conduct, the monitoring, supervision, reporting internal office keeping that we need to observe and then old going to talk about the external matters, not in massive detail, but just to list them. But then I want to talk about. Two key things were going toe happen. Well, one of which already has guidance on what we think serious or material breaches might be that clearly the cult is under a duty to report to the S. R. 1/4 with and finally, I just wanted to reflect on the responsibilities that will come not so much with the new codes of combo, but clearly that is going to be the important focus. But with the new standards and regulations which were going to come into force on the 25th off November this year, who is the Culp? Well, the Cope is the compliance officer for legal practice, and that is their official title on, but they will. The equivalent in an A B s is the hope, the head of legal practice. But whichever you are with your culpo hope you are a key management functionary. If I can put it that way along with the compliance officer, or head off finance and administration the Cofer or offer now the ethos off the cope is broader than the ethos behind the coffers role and the role of the cult is primarily to take responsibility for managing risks in their delivery of legal services. And the cult's role is to have responsibility for the firm's internal systems and controls, all of which are ostensibly aimed at achieving the right thing. We also have responsibility, ensuring that processes are in place to enable the firm. It's managers, employees and anyone who has any interest in the firm to comply with a range of requirements. Honest. There s hope, it says in the e force behind the role that the S. R. A. Publish that you're not solely responsible for compliance with the handbook requirements, nor, indeed, the requirements of the standards and regulations that come into place later in the year. Ultimately, though, guidance sorry compliance is the responsibility of the firm and its managers. However, the Culp has a key role in ensuring that suitable systems and controls are in place in recording breaches and reporting material breaches to the S. R. 1/4 with. So the job is not to create the rules, it is to police them and make sure that all the systems and procedures are working as you feel they should. You also under a duty to supervise any systemic errors that might crop up from time to time and fix them. And that, I think, is the S R. A's approach. Really. They're very much more concerned about devoting their enforcement resources to the roads and shysters who neither know nor care that there are rules. They don't particularly want to come in with a big steak and beat us up for doing our best. They're not that kind of regulator any longer. They're much more collaborative. They want to help us to help them so that they can leave us to get on with it. And that, I think, is this. That is ostensibly what the role of the Kolb is to do the right thing because it's the right thing to do and to reassure the S r A. That they don't need to focus on us now. In theory, the culpas, the chief executive officer, the CEO of the firm. But it's not quite the same as the role of CEO is in a PLC. The focuses mainly on the provision of the codes of conduct and the statutory framework within which the firm is operating, and external rules which the firm must obviously, and here too, but I would be inclined to suggest that the Culp is also a repository off advice for the firm's teams. If the firm has questions or anybody within the firm has questions, then ultimately it will be the Culp who will have to carry the can. On it is to the Culp that one would refer those queries generally, and I think this is the supposition behind the theory is that the culpan Cofer are off a similar standing. The Cofer has a slightly different focus on the financial affairs of the firm. The Culp focuses on everything else, but I think they are rarely unless of the same person off the same level. The cult, the Cofer. Rather, it tends to be a more junior member of the accounts team or something of that nature. The culprit is more often than not the senior or managing partner of the business. But it's not part of the Culp function that we are the overall strategic leader of the business. We are a management functionary in this role, to just to make sure that everything is working as we feel it should. Now who could be a Culp Well, the cult must be an individual must be a manager or employee of the authorized body, be so it must consent to their designation as a cope. Be off sufficient seniority and responsibility to fulfill the role necessary, have to own the business. But I think in reality that's effectively what this particular requirement means. And they must further not be disqualified from being head of legal practice or Culp. They must also be a fit and proper person in a perfectly proper individual who passes the current updated suitability test both on their appointment and on a continuing basis. Thereafter. They must further be suitable at all times if they are ever ill or absent on holiday or for any other reason. A deputy must be put in place, and if they are removed or die, then a replacement must be appointed fourth with in short, there must be somebody occupying this role at all times. Now they're in place. What is their role? Well, the role of the compass, those saying Iran is effectively to supervise the firm's systems and procedures. We need systems and procedures that's plain from the mandatory principles in the early part of the handbook. So we need systems or procedures that will assess risk, manage risk and deal with all of the things which might arise. And it's the cops duty to supervise those systems and procedures in order to ensure compliance with the SA Raise handbook until that ceases to apply. So until the 24th of November 2019 that is the duty we must achieve the aims and outcomes in the ah current SRE handbook. Thereafter, we gonna have to ensure compliance with the standards and regulations or stars as they're called 2019 and its been announced that they will come into force on the 25th of November 2019. That's a Monday morning. So as from that Monday morning, we need to be up and running with these new systems and processes. If indeed we need new systems and processes that's internally, we also must ensure external compliance, and that is a moving feast which changes almost on a daily basis. We are also, I think, or rather, the cult. Culp is a residual he consultant on what to do If ever there was any doubt or ambiguity in anybody's mind about what we should be doing to comply the rules, the cults, the obvious person to ask and of course, there under a duty to monitor and record all breaches off any bit of rule ology fourth immediately and keep an eye on it. And they're also under a duty to report material breaches to the S R. 1/4 with, and I'll come on to discuss what a material breach might be in due course. But the overarching idea is that the culprit has a sort of overall monitoring helicopter view when can dip down into any particular matters, which, because concern andi, merit further investigation now internally, the requirement is that the firm has systems and procedures already made that point. Onda Culp is the overall supervisor off those firms and off those systems and procedures, so we need to have a policy on a range of issues within the business. We have the firm's way of doing things, and it's up to each individual firm to make its own decisions about a lot of these issues, subject to guidance and support and all the rest of it. But broadly, it's up to the firm to decide what its way is going to bay Once we've made that decision, we should then be training everybody within the business that this is what we mean by whatever it might be. You know, this is how we identify conflicts of interest. This is what we mean by confidentiality. So regardless of what everybody else is doing, this is what we are going to impose on all of the people within the business. If we say we're going to do it, we must do it. So we embark on implementing that policy within supervised. How its operating, we review it. We recalled address and correct any issues that are raised by anybody or anything. As part of that operational process, we report to the S. R. A. If it actually reveals a material breach will come under what that is he cute Course, I don't keep tempting you with that. And of course, we then re implement the process for next year. And that is the cycle of improvement that we ought to be adopting. And it's a continuous cycle of improvement. Every year we review, we fix the things that need fixing and we re implemented for next year on. Then we review it, and we fix it. And we generally are in a cycle of virtue, a virtuous cycle of improvement repeating myself, um, seeking to achieve the ultimate aim. And this requires everybody to participate. And this is, I think, is the biggest single challenge. The s r a r trusting us to do the right thing. So we must do the right thing. And that requires us all to participate in this. No blame culture off confession, you know? Please tell May anything that goes wrong, I'm not gonna be you up about it. But, you know, I just need to know, because if things are going wrong, then we need to fix the systems to make sure it doesn't happen again. Is the kind of approach subjecting most cops would adopt. Confession is far better than concealment. Way better than concealment. But that's the culture which the coat the Culp needs to Inco Kate within the business. No, I was attempting nearly one about with this question. What is a material breach? If a material breach is spotted, it must be reported to the S. R. 1/4 with Andi, I would be inclined to suggest that material breach in this sense, is anything that is heavy weight and serious and could justify a sanction. Now what I'm talking about there is just arranged examples unprofessional, inappropriate conduct, acting where there's a conflict of interest where we know we should not be doing so, um, breaching undertakings. We know that that is an absolute no no. Having lax conversations in corridors that people get over here, it could be a breach of confidentiality. You know, this is serious stuff and we need to be addressing all of those issues, and I would be inclined to argue that they are reportable. That's right, might not do anything about it, but it is nevertheless reportable. So acting where there's a perceived conflict of interest, confidentiality breaches, falling for a fraud or scam, I think is another one which I think merits reporting, creating costs, confusion in the client, creating confusion over what it is we're actually doing in breaching undertaking already mentioned stitching up a client by some inappropriate referral arrangement that doesn't meet the requirements of rules six and nine as they currently stand generally. But I'm just thinking in terms of the MPs expenses scandal, which has actually come up recently, is a matter not to be forgotten. It's probably anything that wouldn't look good on the front page of a newspaper on which could not be adequately justified. I'm put in mind when that MPs expenses scandal hit the press. The protestations were made by the people guilty that I claimed expensive, perfectly within the rules to which the universal response was. Well, you rules are wrong then, and we need to change the rules accordingly. So it's anything which we couldn't adequately defend in the teeth of public criticism. Now what the S. R a say about material breaches and the steps they will take have Bean revised in the recently published enforcement strategy, which came out in February 2019 and it's It's worth a read. But they say that not every breach justifies action on the kinds of things they'll take into account include the intent and motivation Clearly, deliberately is punishable more than inadvertence, the harm and the impact caused and had on the clients, the vulnerability of the clients, the roll, the experience and seniority of the people involved, their regulatory history and their patterns of behavior, whether they have made any remediation and the impacts had on my private lives, any criminal convictions and the like. And this is the the roundabout way of saying that the SRE will take this range of factors into account in deciding whether and if so, what action to take in response to a breach of the rules doesn't mean we don't have to report it, but it just means they don't necessarily have to pursue every single one of them. Now the there was a consultation published in February 2019 same time which sets out tests for how to determine whether a breach is serious or not along the tests, which have just been indicating. And those responses will feed into the new stars that come into force in November. No, just as an aside at the same time as the law society were so noble also, that yes are a were publishing the standards and regulations. They also published the Price Transparency Rules 2018. This was a set of rules which came into force on the sixth of December 2018 in order to meet commitments given to the Competition and Markets Authority that we would publish price information on our websites by the end of 2018. So this bit of rule ology has come into force earlier than the other bits. But we now have the transparency rules which require us to give details off the prices we charge as well as the key stages of a matter. The timescales involved the staff involved in relation to eight areas of work residential conveyancing, private client work, some motoring offenses, immigration, work, employment, dismissal claims both from the claim and down the defendant's perspective debt collection up to a certain limit on licensing. These eight areas of work are, if we undertake any of them susceptible to this obligation that we publish this information in a prominent place on our website. And not everybody is as adept as we might hope in publishing this information. I was looking just a few websites just the other day on Do Some of them were incredibly completely and where earth is this price information. But I found it in a footnote on one Pedro. That's what Is that? A prominent place on the webs website and I'm inclined to think that on the landing page we should have, you know, the our people, Our services contact us, our prices. Onda who we are with any of the usual things that we've got on the top strap line of our websites. But price should be one of them. Click on that and down comes all of these eight areas of work and we can just click on that and see how much it's going to cost us now. There is a lot of opposition to this transparency idea and a lot off firms were saying and the SRE was sympathetic to this, that we cannot give a price. You were not selling widgets. We're not selling up cattle, you know. What we do is a very much more subtle exercise, and we need to speak to our clients about this. And of course, I acknowledge that in the S. R. A. Due to. But the Competition Markets authority were were pushing us, and I understand the reason why they were pushing us to publish information on our Web sites. And I was listening to radio for just a couple of weeks ago which were discussing the funeral plan contract market. And the comment was made by the people in the studio which professional service does not publish their prices on their website these days. Yes, absolutely. And what I can tell you, woman doesn't we don't. And of course, there are difficulties in delivering this information, which is why the S R is limited it to eight areas. But if we are genuinely thinking about our clients and we're genuinely thinking about the new ways in which they come to us, they won't pick up the phone. They certainly won't come in off the street. They'll probably check us out electronically. And I wonder whether this isn't a marketing opportunity on Do we have these eight areas where it's compulsory, but why don't we do it for other areas? And of course, the fact that we have to publish this information does involve and invite comparisons. So how are we going to differentiate ourselves about against our competitors? These are the big questions which I think these transparency rules give rise to on the s r. A. R knows investigating as all of April 2000 and 19 the the extent to which we are performing our obligations adequately. So it's up to the cult to monitor the provisions of this information and I would be inclined to say should be championing the open publication of this information now. The other thing which I think the cop needs to be looking at clearly are the codes of conduct. And at the moment, we're currently Inversion 21 off the SRS Handbook, which was published on the sixth of December 2018. The code is part be off the handbook, but the cope also supervises all the other parts of the handbook with the sole exception of Part C E, which is dealing with the account rules, which is the coffers part of the function. Now the the new rules which are going to come into force, were issued on the 13th of June 2017 and it was recently announced that they will come into force on the 25th of November. That data I have already mentioned, so there is change coming. But as things currently stand, we have the mandatory principles which are currently 10 in number, and I won't take you through the details. I'm sure you know what they are and a Sfar. As the common issues and errors are concerned, the things which the Culp must be supervising are the honesty, the independence and the integrity with which we deliver our legal services. And those are questions of mood and tone that I think, well, we know what they mean because I've been steeped in them for 35 years. But I just question whether everybody coming up through the ranks through the recent processes of qualification necessarily understand what integrity is all about. We clearly need to be acting in each client's interests. We need to be guarding against conflicts. We need to have confidentiality, um, nailed down. We need to ensure the maintenance of standards we need to ensure collaboration with the regulators. That collaborative approach have already mentioned. And of course, we need to have risk management issues nail down to. We also need to comply with equality and diversity initiatives, monitoring and correcting any issues arising. And I'm thinking, particularly there off the Post Weinstein hash tag. Me, too, initiatives on the gender gaps that we are guilty off, but failing to acknowledge. I think, with sufficient alacrity. We also need to ensure the protection of the client's assets, not just the money, and that is obviously the coffers responsibility. But the assets, the confidentiality issues, the cybercrime attacks that we have to do defend against, and with particular reference to the issues raised by the various chapters in the current co chapter. One, for example, talks about ensuring fairness to clients, and I think we ought to be earning on the side of caution in any disputes, bending over backwards to be seen, to be assisting with clients and not trying to pull a fast one at any time that we ensure compliance with client care provision that costs information is adequately given not just on the website in advance of instruction, but to the clients after instruction. We also need to give full information about who's in charge. And we need to settle the terms of these letters across departments because I'm conscious that you, when it comes to a client care letter, it never as many versions is there are people working for you, which is not necessarily always a good thing. We need to have complaints, information taped and of course, the S R. A logo, which is also available from the sixth off December but will become compulsory on the 25th of November, along with everything else 2019 that SRE Logan will give a click through to complaints information. So there are ways in which we can improve the delivery off this information. But the Culp should be all over this, as he should also be over customer feedback provision. Always a better word, I think, than complaints but feedback. And I would want to know if I were the Coke. What are they thinking? What are they saying? What are they tweeting about us? Because that will do untold damage to us if ever there not tweeting things positive about us, so and that's instantaneous. And we need to be all over it in ways that Google and Facebook frequently aren't on. Of course, there is the implication. The not not too distant, um uh, contemplation off comparison websites. But under Chapter two under ethnic and the quality data, we need to be gathering this information. We need to be monitoring it, checking it, reporting it. We need to be on the lookout for inappropriate behavior on, of course, gender bias. You know, the fact that we pay the women in our firm less than we pay the men, but what's the difference in the jobs in Nothing. So we should have no difference in pay is the kind of sets of questions which that gives rise to under Chapter three of the code conflicts of interest. Do we have systems in place that enable us to spot personal matters? Financial, personal, political, commercial? When do our interests conflict with those of our clients, in which case we just simply cease to act? But what considerations occur when we are acting for more than one client and their objective? Zahra Dobbs. If they're not at odds, we can continue acting for them as long as we have their informed consent. But what does that actually mean and our records adequate and further? What considerations do we have to have in mind when we erect information barriers to deal with competitors? What is acting for actually mean it all? All of this is stuff that the Culp should be picking up in dealing with Chapter four on confidentiality. We need, of course, to be all over the cybercrime issues, the hacking, the attacks to our systems because, of course, we hold a lot of financial information back lines, but we hold a lot of personal information to which, if anything, is worth more on the dark net than the financial details. So we need to be complying with a cyber essentials scheme, a requirement of the Sikh US accreditation as off the first of May 2019. But we also need to have our eyes open to the identity frauds. And are we being conned by people who we think are person A when in fact, they're nothing of the kind? Do we modify our retainer to accommodate information that should be but can't be revealed to clients because of its confidential nature? And do we have a formal information barrier policy? Is it adequate? Who police is it Because, of course, because, of course, the courts have sent that these information barriers must be a fundamental part of the organizational structure of the firm not created on an ad hoc occasional basis. Chapter five. All about duties to the court that we don't tamper with evidence were influence. We don't mislead. We don't waste time. You know all of our representatives and advocates acting properly at all times under chapters six and nine about introductions and referrals that are we making those introductions and referrals. Ari, Are we receiving them in the client's best interests? Are all our arrangements set up in a way that favors us? All the clients? Are they in writing? Have we commercial hookups with third parties, not just involving money that have not yet been fully disclosed to the client? Does the clown realize the full impact of these arrangements and how that might affect them? Do they get the benefit or do we? These are questions which the cults must be asking from the Chapter seven. Are there systems in place to enable the firm to function adequately and take all risk factors into account? Are there mechanisms to ensure the adequacy of the delivery to clients? And are there adequate internal supervision arrangements to under Chapter eight? Is our publicity honest, decent and truthful? Does it offend public perceptions of the profession? What do we say about our costs or success rates to the general public? And is that in any way misleading? Chapter 10 Do we have good relations with the S R. A. The S. R. A. Have adopted a new approach over recent years to regulation and enforcement, which we see in their new enforcement strategy, but their new staff have brought a new attitude to it, and they will trust us to do the right thing even when they're not looking. So of course, we need to get on with that. And, of course, the new freedoms that are coming under the new stars will, of course, give us even more flexibility to innovate and offer services in a novel way in Chapter 11 about undertakings. Do all of our staff know and understand what an undertaking is and how fatal it could be if we were to give on undertaking inadvertently or in an off the cuff utterance? It doesn't have to be called an undertaking, to be one. An undertaking is simply a promise that we will do something, and we could give that in all kinds of ways and all kinds of indicators. You know, I'm inclined to think that again. The more youthful members of the team could perhaps be a little bit, you know, to lax in their postings on social media. They use means that use emoticons and what a smiley face be Interpret. Herbal isn't undertaking if it was given in a response to your will you do this for me? Please? Smiley face. It's ambiguous, but who gets the benefit of the ambiguity? They dio, not us. So the question becomes, What were they thinking that we were saying on a smiley face would indicate to me that you are accepting the terms of this undertaking. But I think unless we understand that there is the obvious risk that these things might happen and we get caught out by them without sufficient thought being given to them. As far as Chapter 12 is concerned, this is the separate business provisions on and do we monitor and supervise what said to clients and by whom? In relation to any separate business operated by the firm? Is it kept rigid and distinct? I know from locally to me, where you going? One door. It's all green, and all of the paperwork is greeting, and that's the legal part of the business. But go through the other door. It's all blue, and that's the financial services sector of the business. And it plain that if it's green, it's law. If it's blue, it's financial services and that kind of clear and rigid distinction and that clear communication of rights and remedies. Declines is essential. So there's a lot which the cope is residual responsible for ensuring we are doing. And I've just quickly rattled through the key provisions. But we should be capturing all reports off any breach by anyone, anywhere, centrally. I would be inclined to suggest there's no obligation to keep these reports centrally. But I think most cops of my acquaintance would be in favor of a central record of breach. And in the reporting of those breaches, I would argue the cops should be encouraging a culture of confession, as I put it, the idea being that I'm not gonna beat you up, you know, Please fess up. It's better than concealing the matter. I'm not gonna beat you up unless it's necessary. But, you know, I just need to know what's going on so that I can fix things were necessary because I need to be monitoring for patterns and trends. And yes, I have to report fourth with any material breaches to the S. R. A. But ultimately that is all I'm doing now. In addition to all of those internal matters that I've just been discussing, Of course, there are a range of external matters that we also need to have an eye on, and I'm just gonna a lot of through the majority of them without necessarily focusing on in too much detail. But there is a vast range of things that we need to be getting right on. The first port of call is risk management. We talk a lot about risk management, and I even went on a law society course to have it explained to me because I wasn't quite sure what they meant by it. And the only thing I can remember about the courses that risk management is the management of risk, which didn't help me a great deal. But the kinds of categories of risk which the cult should be in overall charge off fall down into the strategic risks, the operational risks, which of the day to day matters and the regulatory risks. The strategic risks involved the overall risks to the long term viability off the business. And I think the standards and regulations coming into force in November posed probably the most significant risk since the Legal Services Act because they are freeing up the not only our profession but other professions as well to employ solicitors to deliver legal services to the public. And that may well, ah, create risks to the long term viability of our business in our field of operations, because people will be crowding in from the edges. We need to think about marketing about business development, point of just bean making. We also need to think about I t functions, the advent, particularly of artificial intelligence, new business models, strategic alliances. You know, the long term future of the business is part and parcel of the cult's set of considerations. Now the operational risks involve ensuring business continuity. In the short term, the effective firm policies on the client we can, under the new rules, writes out of any obligation to pay interest to the clients. But is that gonna work for the clients, frauds and crimes? The daily attempts that we face on people either to subvert our financial communications, all the information that we're holding about people, errors affecting clients, Clearly, those are reportable. And of course, we have a whole range of regulatory matters that we also need to comply with the Data Protection Act. Proceeds of Crime act money laundering regulations, health and safety at work act, You know, the kind of thing Disability, discrimination, equality, act, bribe react, criminal finances at 2017 hour range of things that we need to have in place. And I think what the Cofer is going Sorry, The Culp is going to need, ah, risk registers that Oh, a list of all of the various wrists categorised under the various headings and that are updated regularly because clearly these risks will change from time to time. The risks to business continuity may change because next door have just opened a new court system. You know, does that mean we're gonna have protests of the street in the street? Which means that we can't get into our offices to do our work things of that nature. They're going to change on a daily weekly monthly three monthly basis, and I would be inclined that to think that we need some kind of risk committee which regularly meets to discuss the risks and updates ourselves accordingly, and we obviously keep records off that process. But that is all part of the phraseology. Frauds and scams are just simply mentioned briefly for a moment because we just need to be aware, I think, in the aftermath of the Miss Kanda Rare case, particularly in the property matter, but clearly anywhere about the risks of identity fraud and are we able to pick up on those potential issues? We also need to be alert to the systems, attacks and ransomware issues that I've just been talking about, and we need to be checking the identity of the clients and all the other circumstances which support the instructions that were given. If there's anything anywhere which strikes us is order unusual, we are now duty bound to ask about them. If we're happy, then find get on with the job. But if not, then we need to be reporting its to the Culp ultimately on and maybe the criminal authorities as well. There is some pressure, particularly from within the Sikh US system, that we ought to be subscribing to cyber essentials. Government backed initiative, which would have us checking that are by T systems, are as ring fence standers, Robustas convey. And of course, the problem with I T systems is the systems can be fine. The problems in the chair not in the computer it's a picnic problem. But if we can get our staff to play the game and have sensible passwords that they change periodically and Elektronik firewalls that they that they are using adequately, then we can subscribe to certain essentials plus, which will then check the adequacy of our systems on the integrity off them for our benefit. So they'll test them externally. And of course, we need have a policy, and we need to train staff in it so that we are as alert to these risks as possible. I am. I never cease to be amazed at the number of people who get conned into all kinds of things on. I was really going just yesterday. You know, somebody got conned into handing over most of their life savings to somebody was purporting to be Jason. Stay them the actor, you know, just the way the emails and cold types were. Phrase just didn't sound like they were coming from an Englishman. But yeah, that's just may, I suppose, but it just never ceases to surprise me how people get conned under anti money laundering and terrorism law. We obviously need to ensure that we are complying with the proceeds of Crime Act 2000 and two and the new Money laundering Regulations of 2017. And, of course, the associative terrorism, Um, provisions as well. We need to be refreshing our risk assessments under that regime, we need to be enhancing beneficial owner searches and the data that we get from them on. We need to be doing enhanced pep searches, checking the sanctions lists and so on. And considering whether an Elektronik search might now be the best way of doing that, we need to be checking identity evidence thoroughly, getting it's one thing checking it is the next Onda. Of course, I would say that the overarching aim of all of the money laundering regime is that we are performing ongoing monitoring properly. It matters far less who somebody says he is. It matters critically what it is they're asking us to do. And this is the old new your client idea. The better. You know, your client, the better placed you are to assess risks under the GDP are, of course enforce. From the 25th of May 2018 we have the Data Protection Act 2018 but we also need to comply with. If we're going to ask for consent to the use of their data, we need the clients actively to give that consent. Of course, there are other reasons and grounds for us using the data, but we need to explain their rights in a privacy notice because, of course, there are new information commission officers penalties for breach of any of these provisions. And it's it's not primarily aimed at the professional services sector because we've been subject you are professional duties of confidentiality. For long enough, it aimed at the electron ICS, the Facebook's and Google's and Amazon's of this world that take our data and then sell it for a whole variety of reasons in return for our free use of their services. And, of course, I would simply repeat the point that we are under a duty to maintain, uh, the confidentiality of all the information we possessed. If we are ever using data on on clients the insurance distribution directive, I would also mention it came into force on the first of October 2000 and 18. It requires the appointment of an insurance distribution officer, the rewording of all of our paperwork and client facing documentation, but critically, it involves the setting. Whether the policies that we are suggesting to clients is resolution of various issues are indeed adequate. It also requires us to match those policies to the needs and requirements of the clients and to provide to the client s'more information earlier than we have been doing the hand. Of course, we get into the whole issue of customer service the constant pressure not only from the clients but from above, from the competition and markets authority in the Legal Services Board and the S R A. To deliver quicker, better, cheaper and MAWR transparent legal services and advice to the general public in recognition of the unmet legal need that gets frequently mentioned in the correspondence that 90% off private individuals with a legal problem will not consult a lawyer. And indeed, 73% off the small and medium sized enterprise market similarly will not consult a lawyer. Why not? That's what we're there for, surely, but were perceived to be old fashioned and you ring fenced in jargon on expensive, and people just don't want to come to us because as soon as they walk in the door. They will get pummeled with three communications, telling them who to complain to when we foul up. They also get a 15 page client care letter, 10 pages of terms and conditions, and I please. I just want to talk to somebody. You can't do that because we haven't done all this first. But I think that is the the problem that we are perceived to be difficult to get to in the way that GP czar, you try talking to a GP these days. It's impossible and those feedback mechanisms that we are encouraged to provide the responsiveness that we can demonstrate to them. I think our things which are going to become increasingly important was the new generations of our clients move on. And I think the millennials view of tradition ality has changed radically. I mean, they just don't want to be partners in law firm anymore. Yeah, why should they? You know they can work from a computer for more flexibly. It's a completely different mode of operation and I think the transparency rules that we are fighting to comply with, I think, go some way towards meeting that market demand. But as far as complaints and alternative dispute resolution processes are concerned. I think there is to some extent a greater readiness to complain these days. But ultimately within the regulations of the legal profession, there are nothing different regulators to complain to. And this notion of competition between regulators is starting to create some real issues, not for any sort of bad reason, but the idea that oh well, that was delivered by that person their license convinces. So you need to complain off there All that was done by us. We're s are regulated to find you can complain to the sorry if need be you know? Well, there, there, there it breaks. So you need to complain to It's confusing. And there is as part off the revision of the Legal Services Act, some discussion amongst the regulators about how many regulators there needs to be in their suggestions that should only be 21 for reserve business, one for non reserved business. But that's ah, discussion way above my pay grade. There are also issues to do with P II insurance. Chrisman Passmore, the director of policy who as walls at the S. R. A. Would make the comment and was actually trying to push through these amendments that, uh, how much cover do you need? Do you need three million quit per claim, or could you get away with less than that? And his argument is that whereas they were looking to change the rules and were unable to do so, there's no reason why we couldn't ask the s r a for a waiver off this p I provisions a requirement and be allowed to get away with lesser cover if we can get cover a tall Andi. This is the other question, of course, that if we want P I I cover off the minimum terms and conditions standard. Then, of course, there are pressures from the P II insurers as well. What did they say about cyber fraud? What did they say about continuing competence and what effect our claims gonna have on our renewal premiums? Of course, we also have HR systems and discipline to deal with. Obviously we need policies about recruitment and training and discipline and removal. We need appraisal systems. Do they work? How could they be improved? Can be made more effective. Periodic supervision of the clients David Mr used to call this pigeon training. How do you train pigeons to get to the pile of grain across the other side of the room? You don't say. There you go pigeons. That's your goal for the next year. I'll see you in a year's time because you'll come back to a room full of dead pigeons. You need to train them to follow the path of grain across to the big pile in the corner and you'll come back to a room full of fat pigeons. But that's a periodic supervision process, which is part of want continuing competence is all about, and those are extra duties imposed by the S R. A in their new continuing competence framework, which we've had admittedly from from November 2016. But this process of reflective professionalism is something we should all be participating in. And there are a couple of extra duties imposed by the Money Laundering Regulations of 2017. The idea that we must be supervising the staff to for financial skullduggery if there is any, and we also need to be, ah independently auditing the processes and systems that we have in place. No, as far as continuing competences concerned. We need to reflect on the SRS competent statement what we need. There are a selection of training sources that we can call upon to deliver to us the things that we need to be able to do our job properly. But at the end of the day, it's the cope who has to sign off on the fact that everybody is competent as judged by the S r a on their competence framework. And that's just a quick scattergun approach through the range of duties which we're currently under. And frequently the Culp is seen as the last resort on matters compliance. If there are questions to be asked, then it will be the Culp who will have to answer them. Generally speaking, they're not the overall leader, but they are the overall manager off the business and how we do things. I'm just going to finish off with a brief consideration off the new responsibilities which are going to come with the new codes of conduct on the new standards and regulations of 2019 because we've known for some a couple of years what the rules are going to say. But it was recently announced that they're going to come into force on the 25th of November. They will cover S are a authorised bodies only so clearly if we're not authorized by the S. R. A, then we don't need to comply with their codes. But the cope has bean retained in this framework. They've separated out the codes of conduct into two relatively brief recitations of the rules from a fairly dense and complex 44 pages. And what they are doing with these new rules is they are giving us flexibility. Two separate codes, one for firms and a separate one for individuals. So there's flexibility for individual solicitors to work outside the S. R. A. Regulatory framework. We don't need to be employed by an S r, a regulated firm staffed by a sorry regulated solicitors. To be able to call ourselves a solicitor, it will no longer be our monopoly. And equally there's flexibility for firms to opt to move out of SRE regulation into some other possibly unregulated form of business delivery in the soul, with the sole aim of enabling the public to obtain quality legal advice more freely and flexibly. There are costs in abandoning S R A regulations, because if we're not SRE regulated, then we could not perform reserved legal activities, which broadly, is covering litigation and advocacy. Nor could we call ourselves solicitors. But Slater and Gordon call themselves lawyers nor carry off a compulsory P. I Iove the minimum terms and conditions standard that alternatives are available, nor Khoury off a compensation fund recourse because that's only available to those who pay into the compensation fund. And that's only s are regulated law firms. And I think the critical point to me anyway, is that unless we RSR a authorized, we could not give privileged legal advice we could, as an individual solicitor giving advice to the general public in our own name, which is a possibility that is true. We could give privileged advice in that context. But if we were a solicitor working for an or a different organization and a firm of accountants, for example, privilege breaks down because the advice is given in the name of the accountants by solicitor admittedly, but in the name of the accountants, and I don't think there that legal professional privilege would apply. So the questions for the cold ultimately I think will affirm. Want to remain SRE regulated doesn't want to be regulated by one of the eight other providers. Will it want to divide often offer some unregulated services? The cope will remain responsible only for the S r A regulated business. But clearly that's part of the strategic decisions for the business that the cop will obviously have a part to play it. But the substance off the rules remains largely the same. There's not a great deal of difference at street level in what the rules actually require office. I say that all the guidance will be removed. Outcomes fall away. Indicated behaviors disappear. Ah, and the s r a r abdicating ultimate responsibility for telling firms know what to do necessarily but how to do it. The cope is going to be jointly and severally liable for compliance with the handbook. And the stars from November will be responsible for installing and maintaining those systems, old or new. And ultimately, the regime that is going to come into place is a compliance system for grown ups where we do the right thing because it's the right thing to do, not because anybody is telling us to do it this way. Thank you very much indeed. For listening
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