Legal News
Star gazing Michael Garson outlines some of the key features of the new regulatory environment, following the introduction of the new SRA Standards and Regulations
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n November 2019 , the Solicitors Regulation Authority (SRA) introduced the new SRA Standards and Regulations (STaRs), replacing the SRA Handbook and Code of Conduct 2011. The move to ‘principle’- or ‘risk’-based regulation offers increased choice, but also increases uncertainty and risk for practitioners and the public. The latest iteration streamlines the structure and wording of aspects of the old code, but the underlying obligations remain. The new SRA Code of Conduct for Solicitors, RELs and RFLs (referred to here as the CfS) and SRA Code of Conduct for Firms, along with the SRA Accounts Rules, Authorisation Rules and Enforcement Strategy, are shorter overall, and place increased emphasis on integrity and professional standards of conduct. This article offers thoughts on key changes brought in by the STaRs, and on the wider environment for conveyancers, with reference to the new CfS. Client care In order to maintain professional standards in conveyancing, there are key elements that are paramount. I suggest that service, advice and probity remain central pillars. Although it is too early to judge whether the STaRs will mark a significant shift in the way we conduct conveyancing, it is nonetheless a useful exercise for firms to overlay their existing processes against the new regulations to see where efficiencies can be won. In terms of service, many clients clearly now prefer to use email, text and telephone. This poses challenges in terms of the security of transmission and storage of data, and also requires communication skills to ensure that advice is understood by the client. Not all clients are able to access or choose to use modern devices in the same way, even when there are no compatibility issues. Every solicitor must take responsibility to ensure that their client care not only avoids complaints, but is also effective and in the client’s best interests.
“Conveyancing has long held the record for the highest number of complaints to the Legal Ombudsman and claims under professional indemnity insurance” 10 The BILL of Middlesex
Effective client care does not rest on fixed requirements, but rather the shaping of service according to client needs. While a comprehensive letter at the outset of a matter will remain important, that may not be sufficient to maintain a relationship that clients will value. Quality of advice Competent advice is a key to client care and retention, as well as being a core element of compliance (see sections 3.1-3.5 of the CfS). Quality of advice rests upon a reliable system for gathering relevant data and ensuring that once work has been allocated according to capabilities and resources, self-management or supervision is effective to deliver competent work. The range of potential issues in conveyancing demands specialist knowledge at certain stages, together with an understanding of regulatory implications and the risks to be mitigated. Risks are wideranging, from money laundering, stamp duty land tax liability, conflicts of interest and cyber-fraud, and can emanate from clients, counterparties or other third parties, as well as from the transaction itself. Section 2 of the new CfS sets out the requirement for suitable governance, a system of controls, and record keeping. Procedures proportionate to the size of the business will be needed to satisfy insurers as well as regulators. In well-managed firms, the risks specific to carrying out conveyancing will be managed through training and systems that identify potential issues, such as defects of title, planning, onerous leases, or developments with more complex service arrangements and multi-party commercial contracts that need greater time and consideration. Probity, claims and losses Probity may be taken for granted by clients, but poses the most serious threat to practitioners. There are multiple points of risk, and threats can be internal as easily as external. Conveyancing has long held the record for the highest number of complaints to the Legal Ombudsman and claims under professional indemnity insurance (PII). The largest claims will be from total loss of consideration, either through a failure to account to a seller or lenders, or from aggregation of claims upon default or repeat errors in advice on leases, a scheme or development.
