Hello and welcome to this data law. Webinar on the New SA raise Stars, standards and regulations, codes of conduct on the Council's 2019. My name is Trevor. Hello. Well, I am a solicitor. I'm sorry he had no toys as a child, but I've actually spent the bulk of my professional career talking about matters. Compliance codes of conduct, Malita wondering GDP, our account side cramps since, well, for three decades or more, I'm here really to discuss the content of the SA Rae's new standards and regulations of 2000 and 19. I just wanted to focus on some four main areas. I wanted to discuss the implications of these new rules generally because there are some deep and meaningful changes that are coming to the structures of practice. That, I think, is the major upset in in all of these regulations about I mean, that's something that matter of rearranging things rather than any disgruntlement with them. I also want to mention the codes of conduct which had been issued. I also want to say a little bit about the councils and also be making a passing reference to price transparency on and other rules which are can't concomitant upon the introduction off these new starts, looking at the key changes and then talking about the effective implications off these new rules before we get into any of that. So I just thought it might explain the saris thought process behind all of this because the S. R. A. Have changed immensely in the way they are going to. Regulators are regulating. Isn't going to regulators in the future the attitude of the top brass within the S r. A. And I'm thinking about the chief executive, Paul Philip, and the latterly executive director of policy Christian Passport, who's who's view waas, that regulators need only regulate where the law is deficient or inadequate. And, of course, over the decades that we've had the rulebook consumer remedies of vastly amplified. So there's less need for regulation to do a lot of the persnickety detail that it was trying to do. A further thought it consistent with the government's red tape initiative, is that any regulation requires justification, and if you cannot justify why a rule exists, cross it out on that has been very much the editorial, Gary to the reduction off the volume of the handbook into the much reduced standards of regulations, which they've come up with at the same time as they were doing this editorial rehash off the rule book. They were also aware that large numbers of lawyers were already working outside the SRE regulated environment simply because they couldn't find jobs within the SRM regulators environment that they wanted to do so. They found jobs with will writing companies, convincing factories doing non reserved legal work. Yeah, outside the orbit off their ability to call themselves what they truly are because people who aren't working within the S r a regulator environment cannot call themselves solicitors on the SRE view is that surely it would be better to enable solicitors to advise, with their experience, their expertise of training, that gravitas, the professionalism with which they're inculcated. And that would surely improve the position, wouldn't it? On at least part of this agenda is driven by the unmet legal need that which is a worrisome statistic. But if it's anywhere near true that I think we are deeply to be ashamed of it, that 90% off private individuals with a legal problem will not consult the solicitor so where they're giving their advice from, because Consumer Markets Authority competition market authorities research would suggest that 73% of the clients who who get legal advice end up with a better result. So it's clearly in their interests to consult us on. Yet they will not because they perceive us to be expensive and time calculating him on day. Obtuse, rude, almost, and they just don't want to talk to us. 90% of our clients fall into that category, and 73% of small and medium sized enterprises similarly will not consult a law firm if they have a legal problem. And, as I said, motive that I feel is shameful. So yes, all right, I think, are also of the view that it is shameful. They are open to taking responsibility for the fact that if it's their rules that have made us this way, obviously no rules need to change, so they've changed their bit. It's now up to us to change an orbit. Now the Law society have taken a very different view on this. They regard these efforts find the S r A. To relax the rules and to let us orphaned just as damaging the brand somehow, and it's undermining the meaning and function of regulation to do less by way of regulation than they used to do. But I just can't help feeling that the s r A are sounding a little out of kilter in this regard. I understand, of course, the very fair points they're making. But I just feel they're making them in the wrong time to the rule people. The Legal Services Board, the overarching regulator of regulators, take the same view the S r a. Do that There is this unmet legal need on we need as a professional to be more open, more accessible, more user friendly on and to that extent they are with the S r. A in three, the new regime that they've proposed they granted approval to those rule changes in November 2018 on the implementation date for these new rules is the 25th off November 2000 and 19. So, as I'm recording this, it's a little over six months away. Just under six months away, Robert. But the 25th of November is thesis art date for this new regime. Now the 25th of November Monday. Eso effectively It's the previous Friday that we have to have all of our thinking and four processes and revisions in place. So it's really the 22nd of November. But those few days and show worth make a difference. But what are the Rays proposals? Well, in a timeline, this rather regiment of the Brexit negotiations The first SRE consultation was this year three years ago, in June 2016 on they underwent a lot of gestation and mulching and arguing. Andi, they see the new rules in June 2017. But they're not coming into force until November the 25th 2019. So at least it is happening, unlike certain other things. But the timeline has been equally painful. But the broad approach which the s r. A were suggesting engendered as much by the new staff that brought in as much as anything, felt that the old codes of conduct in the councils were too confusing, too rigid to detail to persnickety. They don't they were directed at you. But there was some confusion over that who that meant on one size did not fit all so under the heading of flexibility and public protection. They proposed a massive editorial simplification of the handbook, and they've created the standards and regulations or stars as I keep going instead. And within the stars there are two separate codes of conduct. The current code is 45 pages long, full of outcomes and objectives and indicative behaviors. And you must do this and you must do that in the next thing. All of that has gone two separate codes of conduct, each of six pages on six pages only, but one code which is directed to the SRE regulated law firm on a separate code which is directed towards all of us as individual solicitors, no matter where we work. Now what this new regime has done is it has offered flexibility for individual solicitors to work outside S r. A regulations over solicitor. I don't work for NSR regulated body, so I can't call myself what I am. But I could under this new regime, I could own up to my professional qualification and call myself a solicitor even though I'm working outside the SRE regulated environment. But even then, there is flexibility for phones too, to work outside S. R. A regulations. Cotton? Yes, There is flexibility for firms to work Outside rate S r A. Regulations if you don't want to be regulated by the s. All right. You don't have to pay. I feel as if we've been let off the leash. In the way I let off the leash dog. I bought Rose living in York, and he was romping around the house while he was waiting for his jabs, chewing everything, including my passport. But we gave in his jobs and took him out to some large field next to the racecourse in your cause. It happens when we let him offer these gonna run ledge where you like any promptly sat down, stand out of the way. And I feel a bit like that, huh? What do I do is very much what I'm left thinking, but we have that freedom now. But at least part of the aim of offering us these flexibilities is to enable us to offer our legal advice and services to the general public on a more free and more accessible basis. Within had a second consultation which was issued in September 2017 published in June 2018 and again it comes into force on the 25th of November 2000 and 19. And this adjusted various All the rules made changes to the suitability test to the requirements for the solicitor's qualifying exam. And they permitted us as individual freelance lawyers to undertake what it called reserved business with the benefit of full SRE regulation Full insurance. But with the to provide those that we don't employ staff on. We don't hold client money, but this alteration just puts us in exactly the same position as direct access barristers. If you want to instruct me to conduct a litigation matter, I could is a There's a fully s are regulated freelancer. Go and do that for you. No problem. Don't only staff don't hope for money, but I can deliver you thes individual services Now at the same time, the S. R. A. Also publish its transparency rules. Now what these transparency rules did was they made requirements office that we publish information about costs and other information to do with the matters. It also adjusted SRE registration facilities. It created a digital register role information so that our details can be checked and they also offered the S R A logo, which many firms have now adopted voluntarily. Now these other requirements the logo as well only come become mandatory on the 25th of November 2019. But they're optional, first to take up in the meantime. But the transparency rules, the feet transplant rules came into force on the sixth of December in order to meet commitments given to the Competition and Markets authority that we would have transplant rules by the end of 2018. So we've only got these things. And although we have known for some good two or three years that they were coming, the transparency rules require alof us all of us as SRE regulated firms and individuals all 10,000 plus off us to publish Vira Prominent place on our websites a range off information which includes a new indication firstly of the total cost off the services that we're offering the total cost off the services in broad average terms because I was having spoken to you. So how would I know what it will actually cost? But in broad terms, are you looking at £2000? It will be 10,000 looking at 502 100 quit. If that's the kind of message that we ought to be publishing, we also want to be explaining I would argue in his brief as terms as possible the basis of our charges. We also need to be explaining the experience and qualifications of anyone carrying out the work and their supervisors details, many disbursements and other costs. And what off those are the costs carried V. A t. Arguably all of it. Details of the services included in the price quoted, including the key stages of the matter. Any time scales for each stage on the details of any services that might be expected to be included but which are not. And this is to be a requirement. This publication of this information in respect off for individual clients at least residential convincing, uncontested probate, the preparation and submission of immigration application is not including asylum. The provisional advice and representation at a first year immigration tribunal, not including this asylum. The provisional advice and representation at a Magistrates court in relation to a summary only road traffic offence dealt with at a single hearing the provision of advice and representation to employees in relation to the bringing of a claim before an employment tribunal in respect of unfair or wrongful dismissal and in respect of corporate clients. It is to be a requirement that we provide advice and representation to employers in relation to defending a claim for unfair or wrongful dismissal debt recovery up to the value of £100,000 on the provision of advice and assistance in relation to licensing applications. Now it's those areas of work that were consulted upon Onda. We, as a profession, said, okay, if you have to do this than do it, at least in these limited areas, because we can kind of come up with a price for that kind of work. But master ammonia work p I work employment work other than what I've just mentioned. It is too complicated that I can't put a number on it. So the S r a. Shrug their shoulders. OK, fine what were limited to these particular areas and that is what we have had to do Now. I was listening to radio for the money box or whatever iwas when they were talking about Hugh neural plan contract provisions and one of the contents is making the point that you know who in the modern age does not publish their prices on their websites. And although well, we don't but that we have to and my immediate faults on and off the things Dr Seat so far are really only about 50%. 48% for firms sample have something on their websites, Atal. Some great someone really helpful. Some are instantly accessible and with to a couple of clicks, you've got a feel for how much it costs to buy a house. It's £1000 plus of the 80 plus expenses. Okay, fine. That's just looking. At least I know others around the grudging. You've got to really dig for the information I own Some. I think you've even got to put in the words price transparency in a search field before we come up with any information. And then it says it will be also forced us to say this. And then he got pages and pages and pages and pages and pages of complicated calculations to work out what the final total is. And I don't think that is what the SRM pretending by this openly accessible information, which they are encouraging us to provide. So I think some of the thoughts that will be going through the Essar's minds will be. How many clicks does it take to get to know how much even a charge mint? Why don't you put information about how much it costs to get a divorce or sort the kids out or sort out the money? One can't. I know how much it'll cost to run a P I claim or something of that nature. Yeah, I think there's every pressure on us to be a Zopa Nas, accessible as we can, in as client friendly a way as possible because, of course, we could caveat all of this information. Just look, I'm just publishing our prices instructors, and that's the broad area off money you talking about. But I think there are some real benefits in that, because people might look a little dot is only 1000 quit. My daughter thought bid 5 5000 quid, so it might actually encourage people to instructors, and it will put some discipline almost to make sure that when we have conversations with the clients and we adjust the figures that we don't go wild. Onda come up with some out of the unrealistic figure. But but it's the clients expectation that this information will be there. So we need to make the client halfway on and put the information out there in a zoo, brief away, as I think is possible. And then, of course, we're not a mile away from the Compare the market type comparison websites or trust pilot recommendations. You know, if you go to this firm, then okay, they look cheap, but my God, you'll get rubbish service. Get that for a little bit more expensive. But my God, they're good is the kind of market differentiation that I think the s r. A would have included in this endeavor, but they've backed off. Any indication that we have to published are differentiating features, but that's just the general transparency agenda. Just market to the online community, and I'm minded obviously to think about Children were in their late teens early twenties now, and you would never cross them mind to pick up the phone to find out how much you charge they will research it online, but if they can't find the information will move on now the s r A are starting as off now a Zoff, June 2019 To investigate how far we've gone down this line. They're not in any particular rush to beat us up over it, but we just need to be playing the game. I think. Is there a suggestion nor which takes me to the codes of conduct which are, of course, the subject of a lot of revision in the network of provisions which they already have come up? I'm just gonna whistle through very quickly the provision off the codes of conduct as they relate to law firms on then I just wanted to debate the main changes which moto how firms seek to wish to configure themselves to meet the market demand. But the code of conduct itself hasn't changed a great deal. Its structure has changed. It's been shorn of outcomes and indicative behaviors and all that kind of stuff. And it has also been short of any guidance but directed to the law firm. The key rules are pretty much as they always have been the first thing which the standards of regulations starts off with. It is a description of the principles which they say apply to all entities, all managers of the entities, the owners of the business. On any employee, there are seven now, down from the 10 we currently have, and they say that we must uphold the rule of law and the proper administration of justice. That's now number one, number two. We must act in a way which upholds public trust and confidence in the profession and those who deliver legal services that we must act with independence. We must act with honesty and integrity, and they're separated. Those two out because of case law which does differentiate between the two and say they're not entirely the same thing. We must also act in a way that encourages a quality, diversity and inclusion on. We must also act in the best interests off each client. Now the trump in the Cofer have being retained his office holders. But as I mentioned a moment ago, outcomes of being removed into behaviors have gone. The guidance has gone, though they say they will publish a toolkit shortly, which will illustrate how these rules are supposed to work in practice. And I'm not expecting there to be any particular massive upheaval in what those rules is suggested. But just in short, the rules that relate to firms are only nine in number. Rule One talks about maintaining trust. I call it a rule. I'm not sure whether that's the right term for it, but you it's It's a role that cultural is easier, that we do not unfairly discriminate, that we don't abuse our position. The rule on three that we perform all undertakings given by us within a reasonable time is all it now says. It's all it has said about undertaking for many a long year. But I remember when I had to learn the 1999 going to professional convert, which the bed that thick, which had six chapters on undertakings that complexities the implications, the what ifs on the ultimate thought as to who was responsible for all of this. All that's gone just as you perform all undertakings given by you or anybody on your behalf. But the ease with which one can give an undertaking is, I think easily underestimated. I digress. We mustn't mislead clients who mustn't abuse our position by unfair conduct. We've got to publish workforce diversity data, which is not always that easy together, but that endeavor is still with us. We also need compliance and business systems in place which deliver effective governance to manage the regulatory requirements that we are burdened with. We need to maintain records. We also remain accountable if work is carried out through others. We must also monitor our financial and business stability. Andre must monitor and manage all of the business risks, continuity as well as the more day today we'll mundane legislative requirements. Rule three says under the heading cooperation of information requirements that we must keep up to date with the law. Coldly, we must cooperate with the S L. A. We must respond promptly and accurately to them. We must respond promptly in response to any requests and demands they make of us. We also need to inform the clients promptly of any action they might have against us. That perhaps rather embarrassing requirement is still with us. And we must also under all 3/6 notify the s a way of any financial issues that arise or if anything, in the information they have on us should change. We also need to provide the S r. A with an information report on nearly informing them of any changes to our managers. Information on this more generic rule 39 we must promptly report to the regulators any serious breach by anyone, then says off service and competence in rule for one, that we should act only on a client's or authorized representatives instructions. This is just a statement of what we've known to be true for many a long year. We must also ensure that the services we deliver or competent we must also ensure rule for three says competence in all of our staff. The particular inclination of the standards and regulations is to do this for the legal staff. But I would be inclined to think that actually we should be doing it for everyone, ensuring competence in everyone to do the job. Being engaged to do and rule for four says that we must have a mechanism for effective client supervision as well. So the file reviews that we've been conducting for many a long year are still with us under all five. If we must account for any financial benefit, that's the old commissions point and roll 52 We must safeguard any client money, they say. But raw sex then talks comprehensively about conflicts on confidentiality. They were separated in the old code between two chapters there now combined in Rule six, Rule 61 thing that we must never act where a conflict arises between us on the client, something that I'm sure we all acknowledge and appreciate. The rule 62 says that if a conflict arises between two clients, then we should not act either unless exemptions apply and the same exemptions apply under these new rules, as we have had for some 10 years or more. Under the old rules, the common interest exception would permit us to act form or than work client even where their conflicts that interests potentially conflict as long as they're trying to achieve the same aim. And that aim is far more important to them than the pedantic arguments there may be conflicted out, blah, blah, blah Onda. We must be absolutely sure it's in everybody's interests that we act for them on. Do we have to get the written, informed consent to the understanding that it actually for both of them, I can't act for either one of them? I am compromised. Therefore, I can act for the pair of you, but only on what the pair of you tell me to do. If either one of you wants to have a quick, quiet word with me about whether this is a good idea, what I'm afraid I can't tell you because I'm not acting for you on acting for the pair of you. And if I tell you what, I really think I'll be acting against the interests of the other. That's a classic conflict, and I can't do it if you want that kind of specific advice you need. Your own lawyer is the kind of conversation we have to be having with the clients. But it's also permissible under the Rule 62 exceptions to act for more than one client. Both of them are competing for the same objective, whatever that objective might be. But the implication is that only won't you can win now. Clearly, you have different teams on each client's matter on, only one will win, and that's true. And as long as the clients understand that you're acting for competitors, that's absolutely fine, and as long as there is no actual conflict, there's no conversation or discussion between the teams. We could continue to act for these floods in parallel on the understanding that only one will win. But there's nothing new about any of this. We've had those provisions for some years. On the other hand, confidentiality is still writ large in the rules. Rule 63 says, We must maintain confidences, and that is the general obligation with all of us. Keep everything secret from everybody, about everybody forever. That is the rule on confidentiality. There are many exemptions and deceptions do it, but that is the basic principle no. On the other hand, Rule 64 says that we must give full information to all of our clients of any information which might be off help to them. But clearly that comes into conflict with our duty to keep information about people confidential. You know, there's certain things I can't tell you, and that is the point that we need to be explaining to clients that, of course I will tell you everything. I think that you need to know unless it is confidential to another client and you have to appreciate that there may be things that I can't disclose to you. Are you happy with that or not? If not, go away and see somebody else. But if you happy, then fine. Let's go ahead that has to be expressly brought to the clients. Attention was part of the retainers obligation, but overall, all of that Rule 65 says that we must never act against the interests or former Cline's, unless exceptions apply. Those exceptions. In short, being that we talked to the old client and get their consent, or if we can't get their consent that we build a new impregnable information barrier around that information so that there is no risk zero risk off it coming to the attention of the new client. All of this is not unfamiliar. I mean, we're aware of all of this, and we've lived with these rules for some time. Rule seven applies to affirm many of the sections of the code for individuals referrals, the provision of services, the obligation to identify one's own client complaints, information publicity. All of the rules that apply to individuals will also applying to the firm, and that is just carried across by cross reference. The managers in an SRE regulated firm and by managers. I mean, the owners effectively are responsible for compliance with the provisions off the code of conduct. And, of course, there are compliance officers. The cold for the Cofer, who, under rule nine off the code must take all reasonable steps to ensure compliance with the vast range of obligations referred to on must report any serious breaches. Two. DSR A. As soon as is reasonably practicable and that is old, the code says. Now there's a lot of back story behind those points of principle. It may only be a few words, but in fact it's a few chapters of understanding that needs to be built into it. But the regulators aren't saying Look, you know, it's up to you. You know, your sensible professionals. You make your minds up about how you do this. This is only our obligation. Just make sure that you don't do excellent. Why? Where's the fun? Where I think there is a slightly more seismic change is in the practice framework rules because, as I said earlier, firms can now decide whether they wish to bay. SRE regulated doesn't know need to be a sorry regulated. If you don't wanna pay. Many legal services are not even Legal Services Act reserved activities that have to be carried out by somebody who is regulated many legal services not regulated by anybody at all. Necessarily the only things that need some kind of regulatory approval under the Legal Services Act are the conduct of litigation, the conduct of advocacy, the preparation of instruments, transferring title to land That's not over conveyancing process. That's just the drafting of the instrument. Transferring the title, preparing papers for a contentious probate matter, no Terell activities or the administration of boats. Those are the only things that require approval by somebody somewhere the rest of it does not. So what the s are air pointing out is that firms may decide I simply open the option for consideration, to opt, to become, or to hive off parts of their business to an alternative commercial legal services provider who is not regulated by the S. R. A tool, but by another regulator, possibly by no regulator at all. It just depends upon what you want, what your clients are prepared to pay for and that other regulator, if you choose to go with them, they have less onerous, cheaper practicing provisions that will enable you to streamline the property purchase part of your business, not the drafting of the conveyance, but the property purchase process of the business to ah, much more. Um um, pared down on and cleanly and less comfortably regulated entity. Fact, Do nothing stopping you doing that at all. The drafting of the conveyance has to be done by a SRE regulated lawyer or CLC regulated practitioner. That bit needs regulation. Respite doesn't unless I think is the origin. Well. It's the explanation about this motion of the competition between regulators that was so beloved of David Clemente. Many first introduced these provisions into the legal services after decade again, but it seems an old notion. But now it's becoming even more. Cliff has been clear for that for years, but it's more clear now that we can chop and choose and switch between regulators, however, and this is the big. But if a firm wishes to perform any of those reserved legal activities if he wants to benefit from the use of the title solicitors, which Slater and Gordon don't from state and Gordon lawyers. But if you want to call yourself solicitors that has a certain implication to it. If also you want to offer compulsory P I I cover off the minimum terms and conditions standards offered by the That's all right. Obviously, alternatives are available. But if you want to offer compulsory p hot, then you have to be a sorry regulated. If you want to offer compensation fund records, Andi, on this, to my mind, is the critical point. If you want to give privileged illegal advice, then you're gonna have to be s are regulated. No. Then I really think this puts a different complexion, all things, because I think this is effectively requiring off us a certain appreciation off what it actually means to relinquish SRE regulated status. And the S R is saying, of course, there are perfectly good reasons to stay within SRE regulated for they might be more expensive, but they're better for all 1000 reasons on. And if you want to see why going to a necessary regulator for might be advantageous then of course, you could click on the S R. A logo on our website and many law firms have already taken up this logo. It was available from the sixth of December 2018 it will become compulsory on the 25th of November 2000 and 19. But that logo hosts our landing page, which, if you click on it, that will take you to the landing page, which explains the regulatory status of the organization. The fact that there are rules and regulations that, given what we do, the insurance position that the S are air obliging is tohave. The fact that there is also a compensation fund to which they found could have recourse. Onder the complaints track record. You could complain to the law firm or to the legal ombudsman, and you can click on the various you RL's and I will take you to the Roman pages. And that logo is intended to do a lot of the selling off the S R A regulated law firm to the general public, along with the price transparency rules which I've already talked about. No, The one thing which gets missed in this s r A logo is the point about legal professional privilege. It's nowhere mentioned anywhere that that is actually the key advantage of going to an S are regulated law firm because there are certain off a structural paradigms which don't bring that advantage with them. And I want to discuss that. I want to pick that up again a little bit later, if you don't mind. But that is my key problem. That nowhere does anybody tell us that if you go to this s are regulated firm, then we will also get the benefit of legal professional privilege. And I think that's the mission. Now, as far as individuals it concerned, I will just rattle through the individual code for individual solicitors. It applies to anyone who is a solicitor and I'll put myself in this bracket. I am a sister, but I haven't practiced a such for many a long year. But I am a solicitor and I must therefore, if I subscribed to this code, I want to own that title. I must observe the principles which are the same seven hours of already discussed and debated upholding the rule of law, acting on honesty and integrity and all the rest of it. But this code applies to all individuals, regardless of where we work. And if we want to be cold solicitors, we must adhere to this code of combat and have a practising certificate as well. But there are eight paragraphs to this code, rather than nine that we're looking at in relation to more firms, which cover much the same kinds of principles about maintaining trust and acting fairly. Rule 13 about performing all undertakings given by us within a reasonable time. If I am a solicitor and I given undertaking, I have to perform it on. That is true no matter where I work and there's a slightest you there that if we are called upon to honor our undertakings, it's going to be me who's gonna have to honor the undertaking. My employer may well shift off the responsibility we're not. Lawyers were not bound by what you say you are, but so I'm gonna have to respond to this undertaking that I've given personally. In addition, ruled 14 says that we mustn't mislead the court or others, either by our actions or our missions or complicity. Rule two goes into much more detail about our duties to the court, not tampering with evidence, only putting forward arguments that are properly arguable, not being in content to that kind of thing. but I'm sure you're familiar with that, particularly for doing court work. Rule free has its acting only on instructions from clients or authorized representatives and ensuring that our services are competent and timely. Rule 33 urges us to maintain our competences, and this is of course, consistent with what we sa, Rose said about continuing education, continuing professional development, CPD, whatever you wanna call it, that it is now up to us to decide how much we get from whom of what and on what areas we need to be trained because it's our duty to reflect upon our professional kip capabilities and improve them where necessary. We also need to take account of the client's needs and attributes remaining accountable for the actions undertaken. Remar behalf by third parties, and we must ensure competence in anyone we supervise off client money. Rule four says that we account for financial benefits that we might receive as a result of acting for a client. We safeguard any money and assets and trusted to us by clients, and we do not in a personal capacity hold any client money. Rule five on Referrals Introductions says that we must give to clients full information about any referral, introduction arrangement and any financial interests. We must also ensure that those agreements are in writing on, but there is no breach of any other part off the code. In three pursuit of those endeavors, rule 52 and three save separate businesses that we if we have referral fees that we make full disclosure off, Um, Andi that we refer pick people to any separate business in which we have an interest only with their informed consent. We have exactly similar provisions in relation to conflicts and confidentiality as individuals, as applied to the law firm, the same exemptions. The same extensive duty of confidentiality applies to me as an individual to I'm also under cooperation and accountability responsibilities to the SRE. As my regulator must keep them up to date, I must cooperate with them and be able to justify ALS the decisions and actions which I have taken in my capacity as an independently regulated solicitor. No withstanding the fact that I'm working for some different organization Regulation eight rule. It obliges us to identify any people we are acting for. No, this process of identifying clients is obviously imposes by the money laundering regulations anyway. But side besides that, I think this is a slightly different issue. I think this is just saying to us that we need to know who our clients actually are, which is not always that easy. And we must ensure that insofar as we can and this is a fraud protection step that they are in fact the people that claiming to be it's a fraud prevention issue. It's not so much of money or bring issue, but clearly there was a huge overlap between those two duties. It also says, when acting meant for members of the public that we have a complaints handling mechanism, that we tell them what it is that we inform them of the complaints handling process, including the legal ombudsman's ah jurisdiction. But that's something which the SRE logo also picks up on. If we choose to go for that and Ruling Five says, we must deal with complaints promptly, fairly and for free. It then says of client information and publicity that we must inform clients in a way they will understand so they can make informed decisions about how the matter will be priced, How the matter will be handled. We must ensure that any publicity is accurate and not misleading. And we also must explain how were regulated on the protections available to the clients if they wish to instruct us now again, the number of words used to make these points is vastly reduced, but the hinterland hasn't changed. So what I would say of these, this process of simplification is that yes, OK, we've reduced 45 pages of codes of conduct down to six pages beef, but many of the rules of the same. But this new guidance there's no outcomes. There's no indicative behaviors, but nor is only changed of the lower either the law or what a conflict of interest looks like. The duties of confidentiality. What an undertaking is what publicity isn't is not acceptable is still there. We still need to be aware of what those broader issues and thinking are. The regulators are telling us, so we may have to adopt our own processes for our own internal benefit, particularly for the youngsters says in patronizing May. But I just wanted to mention that the practice framework rules, I think in this area give us again the greatest seismic change because firms can decide what they want to be regulated by soaking individuals. And as I said earlier, many legal services are not reserved activities. We can do anything we like in whatever form we like. It's only the reserved activities that carry that need to be regulated at all. And as individuals to we can choose where we work on. We can also claim our professional title. The SRE regulated profession no longer has a monopoly on employee solicitors. Anybody can employ solicitors. Anybody? Yes, anybody. Anybody could employ me as a solicitor to do. Ah, legal services job for them. But there are some implications behind that. But I could choose to work for a less or non regulated body perfectly OK. I could be employed as an individual solicitor on. I'll be able to call myself that. I'll be subject to the code that we've just looked at and I'll have a practice. It is that we get and I will need to explain to clients the protections I can offer, if any, that come from my employment within this accountancy firm or estate agency, firm or online service provider or whatever it might be that we are choosing to work with. But if we're not, as are regulated, the providers, the firm's the entities that are employing me. I can't do a lot of the things that we've said we might wish to do. They can't do perform, but the camp a form, reserved legal activities. They can't benefit from the use of the title solicitors for there, not a solicitors firm. After all, they can't offer compulsory P II. They can't offer compensation from because nor could the organization give privilege legal advice either. And no, could I? As an individual as part off my employment, I could not give privilege legal advice because if I am asked as an individual solicitor for my opinion about a stamp duty avoidance scheme or something of that nature, I could have conversations with the client about their suggestions and so on, and we could come to some kind of formulated view and aggressive. Andre will go off and do whatever they dio and known off those conversations would be privileged because although I am an individual lawyer, I am SRE regulated. I have all the various advantages which they purport to offer. May the one thing I can't do is I cannot give privileged legal advice because if I'm employed by the accountancy firm, it will be in the name of the accountancy firm that I'm giving the advice to you on. That is not privileged. It would only be privileged if I was individually employed to buy you to give you that advice. And I don't know many employers that would let me duck out of their employment in order to advise you personally. Andi. Then it be privileged. It's it in an old point. But it's not one that I think the SRF cottoned on to. I'm sure they're aware of it, but they haven't mentioned it in their logo stuff. They haven't mentioned it anywhere in the vast literally of correspondence and discussion about this. But that is the position the individuals like me employed by some non s are regulated. Body could not give privilege legal advice. If you want privilege legal advice on, do you want the benefit of the full range of services that lawyers offer, including the reserve legal activities? If you want to go to a firm of solicitors because that name as a magic for you if you want access to the conversation, but critically, If you want privileged legal advice, you are gonna have to go to an S are regulated firm or freelance provider. I'm put in mind of, ah, client firm of mine in a place that should be nameless. Does he pull in? There's a glass palace on the left, which is the accountants on. There's a glass palace on the right, which is the lawyers. No, As I pull in under this new regime, I could go toe on either firm. I could go to the accountants, the tax advice. And when I'm there, I could get advice from solicitors on my legal position so I might be tempted to veer off to the left and go to the accountants. But the one thing I will not get from that accountancy firm is privileged legal advice. I have legal advice, but it will not be covered by privilege. Throw into the law firm it would pay. I think that is the unique selling point which the law firm can offer, but nobody's making noise about it now. The other thing, I would point out this is something which Chrisman Passmore Since he left the SA right, has being heard to say in various blocks He's published that of course, you can now apply to the S r a for a waiver off any particular rules that you not happy with. They've already being granted these waivers to known SRE regulated entities employing SRE regulated solicitors offering services to the general public. Cronuts which rocket law have all done that? But it's also available to S R A regulated entities who wish to delegate from what the rules currently provide. You know, it was applying to the S. R. A for a delegation from the existing rules on insurance, for example. And that is what the S. R. A innovate website has been set up to do to offer us different ways within the rules. With the SRS permission offering legal services are little flexible basis. So there are some thoughts for firms is to have the one to configure themselves. There are some thoughts that individuals about how they want to work, and I think the big change is going to be that the marketplace can soak up all of us solicitors who are not employed by SRE regulated firms to deliver legal services in the general public with the warm limitation that we can't get privileged legal advice for what difference that might make now. The other big set of rules which are undergoing change or, of course, the accounts rules. And I just wanted to say a few things about the account trolls by way of general conclusion. Now, the newer capture ALS are due in force on the 25th of November, as I've already explained, and they're like, Well, is much simplified. They've benefited from an editorial revision, which they did not get the last time the codes of conduct were revised. They've already changed the rules on the accountant's reports and when they have to be qualified. And the IRA support that change with a mention of statistics, which indicate in 2015 they received 4500 qualifying reports on only 179 showed any riel risks to client money. So the change, the rules and in 2017 the first year for which statistics are being available, they received only 900 reports so vastly reduced but 400 of those merit of the investigation. So that is refining the view of the reporting accountant's onto the things that really do matter on should be preoccupying the S on my Chrisman possible is being heard to say that in his opinion, there need only be want a cultural. You don't make your client's money full stop. The rest of it's up to you. You're growing up to you. You've got Coface in place. You got systems, procedures in place. Get on with it, you know? Okay, that might be the occasional Arab medical error, but that's just human. So fix it, you know, sort it. Where's the problem? Is very much their approach then quite got that far in the position. You can't rule, but they have reduced them to only 12. Sorry, 13 rules over six pages, which have four main folk I. They focus first on keeping the client money safe on separate from business funds, returning it promptly at the end of the matter, using it in the meantime only for its intended purpose and filing of accountants reports proportionately only if they're qualified and that means something very different now. They had proposed a new definition of what client money walls to be the overarching aim being to keep it safe. But what was it exactly? They had proposed a new definition off what was to be client money. But objections were raised since he summarized the 18 months of argument so that the rules narrow provide that money's on account off costs and disbursements are still client money on must be put into client account unless they have bean built. And this seems to be the general distinction, which is made in the rules. If we have built for it, it's our money. If we haven't its client money simple. There's nothing in the current rules which say that before we build for it, we've actually got to do the work. New. No. Still, you can have your hands on your client's money as soon as you like, as long as you've sent a bill for it. That's fine now many most, if not all bar one law for my small firms I've spoken to. So no, I'm not gonna let the fear let's get their hands on the client's money any earlier than they currently can. So I'm not going to change the rules. Talk fine. You don't have to, but that's for you to decide. It won't say in the rules what you have to do any longer. Furthermore, there's no definition of office money any longer. It's either client money, in which case all of the, uh protections cling to it or it's yours, and you can do pretty much with your money what you like. There's no mention of agreed fees in these new rules either, nor is only mentioned off unpaid professional disbursements or come to that paid nonprofessional dispersement. The simple differentiation is if the money has bean build for its hours, it hasn't this that further changes in the rules are that although time frames, which we come across in the existing rules 14 days to move this to hear two days to move it from there today or the following working day to pay money in have all changed to the word promptly, which is nowhere defined. So as they say, it's for the firm to decide what you mean by promptly. But I'm inclined to think in the modern era of electronic banking, it's a matter of minutes. I think if we decide that something's in the wrong place at 10 past 12 on a Monday, then how long does it take you to instruct the boat to move it? 10 minutes? So I think this notion of what we understand prompted to me is going to be changed very soon. Mixed payments can be paid into any account, provided the firm arranges the prompt banking off any client money into kinda counter doesn't matter where the money comes in, its where it ends up, which is important. And firms could use 1/3 party managed account if that was what they wish to do. Further, there's no longer any requirement for a written policy on the payment of interest, but things which have been retained. The requirement off having a Cofer is retained as is the requirement to obtain statements and perform reconciliations at least every five weeks, is also retained. And that's a tripartite reconciliation of the statements. With the Office Ledger balanced, they sort of the capital bands on the client ledges so that they will tally and if not, we investigate any differences revealed on the requirement to obtain and deliver. A qualified accountants report has also Bean kept one big change, which time is against me and discussing right now. But one big change is that we must now, under these new rules, perform reconciliations at least once every five weeks on a client's own account on which we are the sole signature, not just our client. Again, it's the client's own accounts to on which we are sole signatory. We also have to perform reconciliations on them to So what have being trying to think? Is that what? No, only satin between now and the 22nd of November? Uh, Friday. We need to be putting our policies in place to make sure that we have systems that are robust enough to meet the SA raise requirements. It's like the fire service. They're not telling us which firings it to use to get out of the building. Their view as a regulator is just if the bells ring run, you know, I'll meet you in the car park. That's about the size and length of the new account rules. So we need to define what we mean by promptly what we want it to me. You this question Unpaid disbursements in office account. There may be some cash flow issue behind the idea that if we haven't built its client money. We can't just impaired into office to pay us back. If we haven't sent a bill, it's still kind of money. So there may be some cash flow issues there. Transferring money's after we deliver a bill to the front. How long do you want to be able to do that? What authority procedures do you want to have in place for client account withdrawals? What and who and how? How is this to be done? Appendix three of the council's vanished the procedure for repaying balances At the end of a matter, we get bowled down with residual balances, and I think one could clarify that with terms and conditions payments in lieu of interest, we could simply remove the obligation to pay it as long as we've given the client adequate information about about what we're doing. Instead, that's absolutely fine. But there's new problem with writing out of our obligation to pay interest. Retention of client money is in non instant access client accounts perfectly possible with the consent of the client on, we must be undertaking the preparation and the review and the resolution off those plant account reconciliations. So what I'm suggesting is that between now and the end date 22nd November. Ultimately, we need to be ready to go on the morning of the 25th is that firms and coffers will need to devise and adopt the policies that meet the unspecified aspect off. These very much briefer new rules adopt the current rules if that's what you wish. But you could adapt them to fit your firm and your own needs. But if we're going to adjust things, which I'm sure we will, then we need, I think, to be talking to our accountants because whatever we put in our rules is the standard against which will be audited in due course. And if the accountants auditing us, I want their view on what they're gonna feel is reasonable and we must train everybody in what our new provisions are today. So in conclusion, we are enjoying a massive editorial simplification off a very dense rulebook. It's being massively send out. There's flexibility for firms to innovate in the method of operation, this flexibility of maneuver for individuals and choosing where to work. There's a reconfiguration of the accounts rules into our if the bells ring, run, type of analogy. So we are much freer to offer our services to the general public on a more accessible and possibly cheaper basis. This is regulation for grown ups on what yes, are a would say is look. Okay, That may be minor errors. Find you've got systems in place coffers, cults in place that can deal with that. Just get on and do it. You know, don't bother us with the small stuff. So that is what I think my ultimate conclusion would be. Don't sweat the small stuff. It doesn't really matter too much. What really matters is the important stuff. Thank you very much indeed for this, Nick.
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