SRA to relax rules on reporting breaches
The Solicitors Regulation Authority plans to drop the much-criticised requirement for compliance officers to report all non-material breaches, an executive said today.
Samantha Barrass, director of supervision, risk and standards, told delegates at the Law Society's Risk and Compliance Annual Conference in London that the authority's current rules will be changed so that firms' records of non-material breaches will not need to be reported annually to the SRA.
The change is subject to consultation and approval by the SRA’s board.
Compliance officers for legal practice (COLPs) and finance and administration (COFAs) will still need to record non-material breaches however, in order to support the identification and management of patterns suggesting systemic risk issues.
The change to reporting requirements requires an amendment to the rules and will be consulted on as part of the next phase of the SRA’s Red Tape Initiative. The consultation will be published in April, ready for the necessary changes to come into effect in October.
Barrass said: ‘In light of extensive engagement with those we regulate and the increasing effectiveness of our risk centre, we have come to the conclusion that we can safely remove the requirement for recognised bodies to report non-material breaches.
‘We recognise that the requirement to record and report non-material breaches has not been popular with firms, many of whom have told us that this is a burden that is simply not proportionate to risks.’
She said the regulator’s main concern ‘is, and always has been, identifying patterns of non-material breaches, that combined may amount to a material breach because of the systemic underlying issues’.
Barrass also said the SRA will shortly be providing regular COLP/COFA alerts so they will be the first to know of any developments that may affect their role.
She noted that the frontline regulator's budget has been placed under pressure by the cost of interventions. A budget allocation of £1.3m to deal with interventions is already overspent, with the cost of two interventions alone reaching £1.8m.
If mismanaged, the cost to the profession of the failure of a firm of the size of Cobbetts could be in the region of £6m, she estimated.
Advice for COLPs and COFAs, including support for decision making on whether or not a breach is material, can be found on the SRA website.
Comments
Link not helpful
Just takes you to general SRA page on COLP/COFA rather than specifically to any support about decision making.
What a fearfully bloated
What a fearfully bloated bureaucratic monster this SRA has become to justify its existence.
When will the Law Society wake up to the fact that it has created a lunatic asylum for failed non legal executives run by non legal professional civil servants people who have little or no understanding of how to run a business or how to deal with people.
What this announcement means in a nutshell is, "make sure we have a good case to hang you
from your own records". Sole practitioners and small companies watch out. Large practices and
magic circle companies no problem, business as usual.
As an interested observer I can see that this SRA is choking the legal profession
with flawed bureaucracy, which is converted into Rules, which the SRA do not have sufficient
staff to police, so they place the emphasis on small businesses, to build their own scaffold,
tie their own noose, and hinge their own trapdoor, just in case we need to come for you, when
our figures are running low. Large partnerships and magic circle companies excluded of course.
Someone shortly is going to start asking some serious questions of what this bloated quango
really achieves. The sooner the better.
Make up your mind
Make up your mind SRA. Please would you be kind enough to define what would be " non material breach" please?
So where do the solicitors who have been intervened stand in all this?
So when the SRA feels the heat from these interventions and see all the criticism from the solicitors they decide to take this decision when it suits them.
Pathetic
Really relax!!!!!
Really relax!!! That will be the day. Sorry but even SRA's CEO , legal directorate & others with cushy jobs need to fill their pockets.
IS this the situation like whistle-blowers.If you report we will be lenient with you.
Like going to the wolves.
What???
‘In light of extensive engagement with those we regulate and the increasing effectiveness of our risk centre...
1. Who do they engage with - I know of no firm who has been 'engaged' by the SRA to discuss their approach -does anyone?
2. Risk Centre - recent threads have emphasised that they do not manage risk - Cobbetts / Blakenores comparisons show that - they jump in when its too late if they can (Blakemores) but then justify not doing so when they cannot (Cobbetts)
I am struggling to see what
I am struggling to see what value the SRA bring to the profession, let alone the public. Something has to give at some point, we should be run and governed by people that have real world experience and can think commercially as well as strategically so as to ensure the profession survives.
The status quo needs radical change before the entrenchment and nonchalance become permanent.
If the Law Society thinks the
If the Law Society thinks the SRA are doing a good job because people
are forever complaining about them. then the Law Society needs to wake
up.
Almost all posts concerning the SRA are critical of their actions.
The legal system in this country may well need regulating, but not by
an organisation that bears much resemblance to an insidious secret
police organisation.
This SRA does not regulate with any form of equality it spends hugh sums of its budget
employing bureaucrats who appear to spend their time creating niche batches of bureaucracy designed to cause maximum inconvenience to the Law Society members, which creates more controversy which in turn creates more bureaucracy.
When it's actions are brought to light it attacks a few sole traders or small companies,
rolls them over, destroys their livelihood on a whim, this it would appear keeps the Law
Society happy. Many of these Interventions have been of a most trivial nature but fight
them at your peril, if you can afford to.
I wonder often why the Law Society does not question why the SRA do not intervene the large
companies, they only attack the small traders. The only time they get involved with the
large company's is when those companies go to the wall, if they were really doing their
job they would be monitoring all equally, and acting with equality, but this is not happening.
I think the Law Society should take it's head out of the cocooned cotton wool
cloud and analyse what this organisation is doing to its members.
It should also take a notice, as I am sure other organisations, including members of the government, who are now starting to show an interest in the nefarious activities of the SRA.
Maybe the Law Society should Intervene the SRA and find out what has been going
on in relation to challenges to Interventions between the SRA/Judges/QC's.
Because nobody wins 100% all the time unless the odds are weighted and you legal
eagles know that. Unless of course the Law Society already knows what goes on.
I am sure the SRA was created by the Law Society as proper regulator,
I am sure it was designed to fish for culprits and wrongdoers of all sizes.
Why then does the SRA with all its might and clout spend its time and
money fishing for minnows? Is it afraid to go for the big fish for fear of being
pulled overboard
Even more worrying why does the Law Society allow this to happen?
The past catches up with the present
Yes, nobody wins 100% of the time unless your name is Robert Mugabe but don't expect the Law Society to help for they were the progenitors of this system when all this was run by their disciplinary arm. They kept getting the bar for interventions lowered and they had a system where your elected representatives were unable to interfere in individual cases. A system which predated the disasterous abdication of powers to the SRA. Consequently, the intervention money machine has been running for years untempered by judicial interference and ignored by the profession as a whole. A few favoured firms have made a fortune from this and have been able, for example, to build new premises in London. The whole intervention system is both grossly wasteful and grossly expensive for it destroys any value there is in firms. Now the reasons for intervention have been so widened that it is a "catch all" for firms in financial difficulty and the Law Society and SRA, who believed all the New Labour guff about ABSs creating healthy competition are panicking. You made your bed, you failed to introduce a system of receivership when you had an input into the Legal Services Bill and now you can pay. Why not start by selling the palace in Chancery Lane? If you don't like that then I suggest you review past interventions and see if you can claw back costs.
Review
The SRA is supposed to be carrying out a review of the Compensation Fund at the moment: see http://www.sra.org.uk/sra/how-we-work/compensation-fund-review.page. The review is currently at the "landscaping" stage. God knows who thinks up these awful expressions.
Oddly, that page talks exclusively about protecting clients. There is no mention of the SRA calling on the Fund to help meet intervention costs.
It's pretty obvious that any review of the Compensation Fund needs to go hand-in-hand with a review of intervention procedures and costs.
Review. Not if your are a law
Review.
Not if your are a law unto yourself and unregulated.
which fits the SRA down to a tee.
Coldslaw
You said it SRA get out of your cocoon. This was quoted by the former president of the law society Mr McIntosh who told the SRA you live in your own cocoon. You act like the judge & jury . They think they above the law.
Oh SRA started dipping their hands in the compensation fund from as back as 2010.
As there is nobody to regulate this unprofessional bunch so they do what they like.
There is an article I read on the internet that there is a lot of corruption at SRA/LS. Who will investigate that?