issue 35 Summer 2017
HLS Annual Dinner at Hatfield House
Hertfordshire Law Society Gazette
Photos on page 8
Also this issue: • The lighter side of Family Law • Herts Law Society Prize 2017 • The impact of the Policing and Crime Act, 2017 • and much more...
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Contents
Hertfordshire Law Society Gazette
Contents issue 35 Summer 2017
4
Council Members for 2017
10
19
Cyber Security
5
From the President
12 Legacies
20
Mapping Environmental and
5
HLS Prize 2017
14
6
The Lighter side of Family Law
15
Regulation and Probate Research
Planning Risks
Dropped probate fee hike welcome
22 Cybercrime
7
Impact of The Policing
15
GDPR Compliance
24
Combatting Fraud
and Crime Act
16
Introducing Nick Wlld
29
Many Happy Returns
8
Annual Dinner 2017 photos
17
Experts in 21 Century
30
Changes to AML
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Paternity Fraud
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Marketing Denise Challener
Accounts Tony Kay
Design David Coffey East Park Studio
Published: Summer 2017
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DISCLAIMER: the views expressed by the writers in this magazine are not necessarily those of the Hertfordshire Law Society
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Council Listings
Council Members 2017 President Stephen Halloran Lawtons Solicitors (Hatfield) Crime Vice President Attia Hussain Crane & Staples (Welwyn Garden City) Family Hon Secretary and Treasurer Laura Colville Debenhams Ottaway (St Albans) Private Client Immediate Past President Claire Sharp Debenhams Ottaway (St Albans) Private Client
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Members Robert Bedford Machins Solicitors LLP (Luton) Employment Nicholas Belcher Nockolds Solicitors Limited (Bishop's Stortford) Agricultural and Liquor & Gaming Licensing Marilyn Bell SA Law (St Albans) Family David Bird Crane & Staples (Welwyn Garden City) Private Client & Trusts
(From January 2017 until 31 December 2017)
Penny Carey University of Hertfordshire (Hatfield) Academic Jeremy Chandler-Smith JCS Solicitors (Codicote) Sole Practitioner Judith Gower Hertfordshire County Council (Hertford) Local Government Steven Hamilton Taylor Walton LLP (Harpenden) Private Client
The Law Society Relationship Manager – East
Neil Johnson HRJ Foreman Laws (Hitchin) Civil Litigation
Jack Dunkley
Gary Smith Nockolds Solicitors Limited (Bishop's Stortford) Employment Amanda Thurston Curwens (Hoddesdon) Family Samantha Worth Tees Law (Bishop’s Stortford) Commercial National Council Member Paul Davies Hamilton Davies (Stevenage) Employment, Family and Litigation
Parliamentary Liaison Officer Judith Gower Administrator & Membership Secretary Judie Caunce, Enterprise House, 5, Roundwood Lane, Harpenden AL5 3BW Tel: 01582 765006 E-mail: admin@hertslawsoc. org.uk
Hertfordshire Law Society Gazette
Editorial
From the President... We were again blessed with fine weather for our Annual Dinner at Hatfield House on the 15th June. I am sure you will all enjoy the pictures elsewhere in this issue, but the Dinner was again well supported and we also had the pleasure of hosting the Presidents from Bedfordshire (Dan Simister), Cambridgeshire (Grace Brass), Bucks & Oxon (Cyrus Medora), the Deputy President of the Beds, Bucks & Herts Chartered Accountants, the President of the Insurance Institute of Watford, the High Sheriff of Hertfordshire (Will Hobhouse) and the President of the Law Society – Robert Bourns.
hottest day of the year thus far, so summer has truly arrived). Stephen Halloran President, Hertfordshire Law Society StephenHalloran@LawtonsLaw.co.uk
Herts Law Society Prize 2017
Can I thank all those who assisted in the planning for the Dinner, without the hard work of everyone the Dinner would not have been the success that it was. Mention to Claire Sharp, Tia Hussain & Laura Colville. A special mention to Judie Caunce, who again played a prominent part in the organisation of the event. I regret to inform members that Judie has relinquished her role as Administrator. We wish her every success for the future and thank her for all the hard work behalf of the HLS. All those who attended will recall the call to arms of our President in relation to a number of threats that we face as a profession. I do urge that you all understand the current discussion that is taking place over Regulation and how “standards” will be maintained. While Regulation is never the most interesting of topics, we do all have an interest in protecting the brand of Solicitor and not having it devalued as part of what appears to be a land grab by the SRA. The current debate will frame the future of regulation and have a direct impact on the different types of structure that may provide legal services, but not need to adhere to the same level of professional conduct – hardly a level playing field. On a personal note, the Dinner was a much more enjoyable experience after having spoken. Addressing my fellow Solicitors and distinguished guests was more nerve racking than I thought it would be and I am used to advocacy. I have also heard our President speak before and I was rather pleased that I was not following him!
Dermot Carey, Managing Partner of Taylor Walton was pleased to congratulate Beth Lubin on winning the Hertfordshire Law Society 2017 award for Trainee Solicitor with the highest LPC score, Dermot congratulated her on the hard work and effort put in to achieve such a splendid result.
We also ran a very successful event the Insurance Institute at the University of Herts on Cyber Crime. I would urge all members to take the risk associated with this seriously. We are hoping to run further joint events with them and I hope that HLS members again attend in the numbers you did on the last occasion. Thank you all for your support in the run up to the Dinner and I wish you all a pleasant summer (I am writing this on the
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Editorial Featured Article
The lighter side of Family Law been round? No, when I phoned him, the answer was that his brother had reminded him of the occasion when the children’s gerbils had escaped and had the run of the house for several days before they were found, and he was sure they had got into the piano and chewed through some strings.
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specialise in family law and have done so for many years. When I have cause to look at a list of my old cases, it’s like seeing your life flash before your eyes as you sink beneath the waves for the final time. Most of the time my work, and the work of my team, is emotionally very demanding because, not surprisingly, our clients are going through a very difficult time in their lives and need our support. However, there have been some lighter moments over the years and I thought they might make interesting reading for the warmer summer months. So just a few anecdotes.
Many years ago now, when most of us were not particularly skilful at IT, one of my clients wanted me to email a document to him. No problem; I could attach it to an email and send it. Ah, not as easy as I thought; my client wanted me to password it as he would receive it at the premises of his client where he was working that day. As it was only 8 am at the time I said I would ask my IT department for help as soon as they got here at 9 am; He then moved into his best teaching voice for 5 year-olds in Reception class and said to me patiently ‘Now, Marilyn, you can do this, just look at the screen, and see that icon at the top, and now press ……” I did successfully send his pass worded email but still smile at that conversation. On one occasion as part of the financial negotiations my client had wanted me to raise in correspondence, the 50 sari’s he had provided to his wife’s family. A week or so later I received a call from reception ‘Marilyn 3 large boxes of saris have just been delivered for you’ ah!
I returned from Court one day to a message from a gentleman to significantly reduce the value we had put into his documentation for a Steinway piano. I went into Agatha Christie mode, was it a fake; had his wife taken the real one (surely this was impossible); had Christie’s
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Court hearings can be very difficult for clients especially in care proceedings where the local authority are seeking to remove the children from their parents care. Lots of evidence is given and parents have to sit in court and listen to everything they are said to have done or not done, and the experts view on the harm this has caused the children. On one occasion it proved too much for my client and he ran out of court; knowing this would not help his case, I ran like mad after him, down 4 flights of stairs and managed to catch up with him at the bottom before he left the court. I persuaded him to come
back and we had the 4 flights of stairs to climb; no need to go to the gym that day! And note to self to wear flat shoes to Court. I was at Court one afternoon with a barrister representing my client; I knew I had to leave for another meeting at 3.30pm and the hearing was still going on; I gathered up my papers and my large brief case and crept quietly out of the court room without causing a disturbance by packing the papers in the courtroom. I was quietly kneeling down just outside the Court packing all the papers into my case when another Judge came by and saw me there and said jokingly (I think!!) ‘There is no need to kneel before me Mrs Bell’ Occasionally when we are resolving division of matrimonial assets we become involved in how the contents of the house should be divided. This is rare as couple can usually agree this and it is not cost effective for solicitors to become involved. However, on this occasion nothing could be agreed. It was decided that I, and a solicitor representing the spouse would go to the house to create an inventory of the entire contents, with all 4 of us being there throughout. This proved to be a very long day. The lady of the house refused to even make a cup of tea as whilst she didn’t mind making one for both solicitors she refused to make one for her soon to be ex-husband. About half way through the day we were inventorying the bed room, and the husband insisted on knowing what was in all the top cupboards of the wardrobe; alas tucked away, were numerous very expensive handbags, which the wife then rained down upon his head. At one point we found two identical brands of sherry in the cupboard, but it could not be agreed to have one each as there was more in one than the other but we did manage to resolve this one with a little judicious pouring (no sampling). Marilyn Bell Partner – SA Law
Hertfordshire Law Society Gazette
Featured Article
The impact of the Policing and Crime Act, 2017 • The notice will mention serious criminal offences of Witness Intimidation and tell you that you could face “up to 5 years in prison” or perverting the course of justice, in which case you could face up to “life imprisonment”
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he commencement of the Policing & Crime Act 2017 has fundamentally altered the way in which The Police are now approaching the issue of arrest and bail. To understand the significance of these changes, it is important to firstly understand how things have worked previously. Formerly, if a suspect was arrested, there were generally three main options as to what might occur after a person had been questioned and interviewed on tape by the police. They were: 1) The Suspect would be charged or cautioned with an offence and, if charged, they would be either released to attend court at a specified date in the future or remanded in custody overnight until the following court day when they would appear before the court at that time; 2). The Suspect would be released having been told
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that the “Investigation” had been concluded and that there would be “no further action”, thereby meaning that the case had been concluded; or 3) The Suspect would be released on Police Bail, under what was known as s.47(3)b Bail—this would mean that with or without conditions, the Suspect would be required to return to the Police Station at an appointed date and time, this date could be changed, extended and could mean that case would drag on for many months and in some cases for years. 4) The third option was the most common—simply because the nature of most police investigations involves the gathering, processing and considering of evidence obtained after a suspect has been formally questioned. To do this, the police would bail them before a decision was made on whether the case would be sent to court on not.
The change in the law and recent procedure effects the ability of the police to release someone on police bail. There is now a statutory maximum, save for certain cases, of up to 28 days. After that period has elapsed, unless the Bail period has been lawfully extended, it is no longer possible to keep someone on bail. In practice, what the Police are now doing to get around this change in the law is simply releasing a Suspect but telling them that they still “Under Investigation” but “not on bail”. This means that the Suspect has no idea if or when the case will be concluded. As they are not on Bail, no conditions can be imposed, but the suspect is now provided with a notice warning about: • “inappropriate contact with anyone linked to your case, either directly or indirectly, through a third party or social media, may constitute a criminal offence”
The real problem for the person “Under Investigation” is that: • Will have no idea when the case may have been • No regular updates from the Police. It is rare that they will communicate with you at all. • No idea whether it is safe, or not to speak to witnesses • And the very real issue of the Police not progressing the case as no urgency or deadline exists The anecdotal evidence is that the Police are now encouraging suspects to the station for a quick chat. The lay client has no idea that this means they are a suspect in a criminal enquiry. The old line is then trotted out that it will take some time for a Solicitor to arrive and unfortunately it is resulting in clients being interviewed without making sure they have sought legal advice. The delays and waiting for a decision are just starting to bite and will undoubtedly get worse. While the old way of a client being on bail did have some adverse consequences, at least it provided a date to work towards and ensured that the client was aware of the full magnitude of the case being alleged.
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Editorial Events
Annual Dinner 2017 at Hatfield House
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Hertfordshire Law Society Gazette
Events
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Editorial Advertorial
Paternity Fraud, a blow to the stomach… I
ncreasingly entering common parlance is the term “paternity fraud” which is the naming of a man as being the biological father of a child by that child’s mother, when in fact, she knows he is not the father. Paternity fraud is a subset of “misattributed paternity”, where a child has been fathered by one man, but is actually the child of another and that mis-attribution is deliberate rather than accidental. In other cases the male may have agreed to bring up the child of another (e.g. from a previous relationship or adoption), but in others, the male mating tactic of cuckoldry has occurred and the male is unaware that the child he is bringing up is not his. While this metaphor can be taken a little too far (since the child is genetically linked to the mother and does not generally expunge the half siblings from the house), it is a common term in evolutionary biology, where it is applied to unwitting males who make a significant parental investment in off-spring which are not genetically related to them. The motivation for paternity fraud includes; a) false claims from either parent with the objective or avoiding or receiving child maintenance payments, b) mothers who wish to hold their family together rather than discourage parental investment from the incumbent male or expose her infidelities or c) males who wish to avoid responsibilities, whether these be financial or familial or indeed, cover up their own indiscretions from their spouse or partner. As to the frequency of paternity fraud, then there are no clear figures and one should be aware of often mis-quoted data from mis-paternity studies where subjects had a reason to take the DNA test. These data are valid in their own right but are not applicable to paternity fraud. The emotive headlines we often see in the popular press, which potentiate the urban myth of increasing paternity fraud in UK society,
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does us all little service and there is no verifiable evidence that paternity fraud is on the increase. However, it does occur. DNA profiling provides evidence of biological relationships and as responsible test providers, we are acutely aware that with the prospect of incontrovertible evidence, people who are contemplating or indeed, driven to, paternity fraud may attempt to obfuscate the procedure. Accordingly, procedures are in place to minimise this possibility. In fact, paternity fraud is not a new concept, it has been with us for generations and our literature and law is littered with reference to it. It is also mentioned several times by Shakespeare in his various works, where the husband of an adulterous wife, the “cuckold”, is often seething with underlying suspicion. For example, when Iago addresses Othello (III.iii.165); “That cuckold lives in bliss, who certain of his fate loves not his wronger, but O, what damned minutes he tells o’er, who dotes yet doubts, suspects yet fondly loves”.1 To which Othello replies..”Oh, misery!”. It is the “Oh misery” that is instructive, the discovery of a paternity fraud has been described as “a blow to the stomach”. The origin of paternity fraud dates from the 1576 Poor Act, when the law required mothers with illegitimate children to name the father in order to ensure that he supported her financially, thus placing a lesser burden on the Parish Poor Law Overseers. They ensured weekly payments from the named “father” by issuance of “bastardy bonds” and which thus created the first opportunity for paternity fraud, as blackmail and perjury then became rife. The law was repealed in the “New Poor Law” of 1834 in order to save poor men from unsuitable marriages and then, a woman with an illegitimate child was sent to the workhouse without financial compensation. These days paternity fraud may be pursued using the tort of deceit (on
the balance of probabilities that the intention was fraudulent) and is not a criminal matter unless a false statement is knowingly made on a public document, such as on a birth certificate or perhaps in information provided to the CMA. There have been a handful of cases which have reached the courts and where damages have been awarded to the male for “indignity, mental suffering/distress, humiliation” or “emotional hurt”, though there are also cases where this approach has been unsuccessful2. It has not yet been possible however, for the male to retrieve maintenance payments, as the court takes the view that bringing up a child confers benefits as well as costs. Paternity fraud has thus been with us for generations and is of course hard to completely eliminate, but the use of an accredited DNA testing procedure makes it difficult for this to remain undetected and also provides unequivocal evidence to support cases involving the tort of deceit. In the UK the use of the rather explosive paternity fraud accusation is relatively modest; this is largely due to the judicious use of accredited paternity testing. Dr Neil Sullivan Complement Genomics Ltd, trading as dadcheck®. www.dadcheckgold.com sales@dadcheckgold.com 0191 543 6334 1 The modern text… The man who knows his wife is cheating on him is happy, because at least he isn’t friends with the man she’s sleeping with. But think of the unhappiness of a man who worships his wife, yet doubts her faithfulness. He suspects her, but still loves her. http://nfs.sparknotes.com/othello/ page_142.html, accessed 10th May 2017. 2 P v B (Paternity: Damages for Deceit) [2001] 1 FLR 1041; A v B (Damages: Paternity) [2007] 2 FLR 1051; Webb v Chapman [2009] EWCA Civ 55.
Hertfordshire Law Society Gazette
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Editorial Charity
More solicitors reference tax benefits of legacy giving during Will-writing than ever before writing process compared to just a third of advisers at other firms. On average, advisers report that 17% of Wills contain a charitable bequest, having grown steadily from 15% in 2011. The large majority (78%) said their firms have assisted in the administration of an estate containing a charitable legacy. This news comes during the same week as changes to the inheritance tax framework, which take effect from 6th April 2017.
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he proportion of solicitors and Will-writers talking about the tax benefits of legacy giving with clients has risen to an alltime high, according to new research commissioned by Remember A Charity.
Remember A Charity has raised concerns that these changes pose a risk to legacy fundraising and called on Government to review the fiscal incentives available, including the feasibility of introducing a VAT exemption on the cost of legal services linked to writing Wills that include a charitable donation. www.rememberacharity.org.uk
The tracking study, carried out by Future Thinking, monitors solicitors’ and professional Will-writers’ approach towards legacy giving and attitudes towards working with charities. Rob Cope, director of Remember A Charity, said: “It’s great to see record numbers of advisers talking about the tax advantages of legacy giving and that our campaign supporter scheme is making a real impact here. The challenge now is to build on this momentum, working collaboratively with the legal sector to ensure that advisers are well informed and remain enthusiastic about raising the issue of legacy giving with clients.” The latest survey – conducted in December 2016 – reveals that more than seven in ten (72%) solicitors and Will-writers always or sometimes advise clients about the inheritance tax benefits of legacy giving, up from 66% in 2015 and 61% in 2009, when the survey was first carried out. Almost two-thirds (64%) of advisers always or sometimes proactively mention the option of leaving a gift to charity, with 38% saying they always do so. One fifth of advisers occasionally proactively mention charity, while 14% never do. Advisers working with one of Remember A Charity’s campaign supporter firms are more than twice as likely to always mention charity bequests. There are now over 1,100 campaign supporter organisations that commit to mention the option of charitable giving during the Will-writing process. Three-quarters of advisers that worked for one of the consortium’s supporter firms always mention charitable legacies during the Will-
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Hertfordshire Law Society Gazette
Editorial Advertorial
The Importance of Industry Regulation in the Probate Research Industry
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ecently, the genealogy and probate research industry established a new regulatory body – the Association of Probate Researchers (APR). The APR was formed to bring regulation and transparency to the professional probate research industry. Prior to the creation of the APR, the provision of probate research was unregulated, with many amateur companies and hobby genealogists with very little legal experience emerging over the last five years, as awareness of the industry has grown through media exposure and commercial broadcasting shows. This growth has also unfortunately
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attracted fraudulent and dishonest individuals and ultimately it is the beneficiaries who suffer. The APR was created in light of this, to safeguard our legal clients and beneficiaries by ensuring that those handling these sensitive matters have the knowledge, experience and capability to do so. The Association of Researchers objectives are:
Probate
1. To protect the consumer (Beneficiaries) from unregulated probate research firms or individuals. 2. To ensure that the services provided
by its members are delivered in a professional, competent and compliant manner. 3. To promote the advancement of ethical standards within probate research through education. The Association has been approved by the Professional Paralegal Register (PPR) as a recognised body for Probate Research. Eligible APR members become a member of the PPR. APR members who meet the PPR’s Practical Experience Requirement qualify to apply for the Paralegal Practicing Certificate and become regulated by the PPR. To qualify as an APR member the applicant
Hertfordshire Law Society Gazette
Advertorial
must have a minimum of four years’ experience within the genealogy and probate research industry and show evidence of having worked on 100 cases or estates.
the status of the probate researcher by referring to the PPR’s register.
Through the Association, anybody approached as a beneficiary regarding an unclaimed estate has the ability to verify
Fraser and Fraser is a Corporate Member of the APR and all of our Case Managers are members of the APR and PPR. We
Further information can be found at www.a-p-r.org and www.ppr.org.uk.
are a firm of Genealogist and Probate Researchers who provide specialist research and support services to the legal professions by tracing missing beneficiaries to unclaimed estates worldwide. To find out more about our services please contact us 020 7832 1400, email legal@fraserandfraser.co.uk or visit our website www.fraserandfraser.co.uk.
Dropped probate fee hike welcome
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they have just suffered a bereavement, so we are glad it is no longer going forward."
Law Society president Robert Bourns said: "This proposal would have affected 42% of estates and would have put pressure on families when
The proposal, which surfaced in the recent spring budget, would have hiked probate fees from a current flat fee of £215 (or £155 if done by a solicitor) to a sliding scale between
ews a hike in probate fees is to be ditched by the government was today welcomed by the Law Society of England and Wales.
£300 and £20,000 based on the value of the estate. The Law Society was among the 97% of respondents to the consultation who argued against the proposed increases, suggesting instead that a much more moderate and stepped increase was appropriate.
GDPR Compliance Matt Torrens, Managing Director at Legal IT Specialist, SproutIT, reflects on some of the many key points covered at his recent LPMA Seminar on GDPR compliance. What is the GDPR? The General Data Protection Regulation (GDPR) comes into force in May 2018 and will replace the Data Protection Act 1998. It is broader in scope, strengthens rights of the individual, brings extra requirements to data Processors and Controllers and, of course, is backed by higher penalties. GDPR is a legal requirement. A ‘regulation’ is a legal act of the European Union that becomes immediately enforceable as law in all member states simultaneously – it does not need to be transposed into National law. Do we need it? The primary objectives of the GDPR are to give control back to citizens and residents over their personal data and to simplify the regulatory environment by unifying regulation within the EU.
and a number of professional obligations surrounding data protection, however GDPR takes this compliance to a new level. Will Brexit affect GDPR? There has been some confusion about how Brexit will affect GDPR. The UK will remain a full member of the EU until the negotiations on withdrawal are completed. The government has confirmed that the UK’s decision to leave the EU will not affect the commencement of the GDPR. Next Steps Organisations need to act NOW to identify what steps are necessary to ensure that they and their members are fully compliant by the implementation date. It is wise to run a Gap Analysis process, in order to understand your current position, against the Regulation, and determine the steps you must take in order to achieve compliance. You will need to blend People, Process and Technology to properly address your GDPR reponsibilties.
If you accept that brand awareness and reputation is key to the survival and growth of your practice, then you might also consider how to build reputational resilience in the form of a Cyber and GDPR strategy. FInd out more Matt Torrens, MD of SproutIT has over a decade of practical data protection experience working with law firms, and is also EU GDPR Foundation & Practitioner certified. For a copy of the SproutIT GDPR Cheat Sheet for the legal sector, email; AskTheExpert@ sproutit.co.uk www.sproutit.co.uk info@sproutit.co.uk @sprout_it LinkedIn: Sprout Technologies Ltd
Chambers and all Legal firms are already subject to the Data Protection Act 1998,
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Editorial Advertorial
Introducing Nick Wild The Residential Conveyancing department of Taylor Walton solicitors have used PSG searches for a number of years What sets them apart is the local presence backed by a National network. This means we can always call on the local knowledge of PSG when needed. We have developed good working relations with the individuals, who are always friendly and responsive. At the same time, our staff have benefitted from courses and seminars organised by PSG on a variety of subjects - this additional benefit means that we feel we are getting a quality-conscious and good value service.
The online search ordering process has been simplified and saves us a lot of administration time. We feel confident that searches will be carried out quickly and efficiently. Overall, we are very impressed with PSG and the service they offer. Richard Atkins, Past President of Hertfordshire Law Society and partner at Taylor Walton LLP Introducing: Nick Wild, Managing Director at The Property Search Group’s Hertfordshire office and main sponsor of the Hertfordshire Law Society Annual Dinner for the past 4 years.
What's been happening in the search sector during your four-year sponsorship of HLS Dinner? Much has stayed the same in that our core business and raison d’etre is to provide quality searches and support to the residential and commercial conveyancer and lighten the load in their daily work. However, no industry stands still; compliance and technology advances have been the main areas of change in the sector. Compliance-wise, cybercrime and ID checks have really come to the fore this year, especially with the recent introduction of the 4th Money Laundering Directive. Tipping the balance the other way is technology combined with the help of their amenable local search agent to provide flexibility of ordering, search alerts, and seamless case management systems. The Law Society gave the CON29 a ‘refresh’ as well last year. Last month saw the launch of Groundsure’s Avista report which covers all environmental and planning hazards in one concise product – a real no brainer for the conveyancer’s due diligence in my view. So it sounds like you have kept yourself busy
Introduction
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ver the last two decades PSG has evolved from a small operation in West Yorkshire to a nationally recognised brand and market leader in search provision. No other provider has such an extensive network meaning you are never far from a local search expert. Nick owns and manages the local office based in Hertfordshire providing conveyancing services to a number of HLS members and law firms in the area. In an exciting new development, the company has just merged with Property Information Exchange (PIE), creator of the market leading brands poweredbypie and Brighter Law to create the number one provider of legal services for the residential conveyancing industry.
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Yes! We have indeed. The requirement for searches is still strong as the housing market today is multi-faceted in terms of reasons to purchase. 25 years ago people were predominantly moving up the ladder in an aspirational way with their families. Today the driver for buying a property also can be investment, a buy-to-let as a landlord, downsizing for financial reasons, releasing equity to help children get on the housing ladder, or due to separation and divorce. We have also honed in to try and give our clients more help in their information collection by providing appropriate copies of decision notices, legal agreements, copies of Tree Preservation Orders, and highways extent information whenever possible. We endeavour to provide our clients with what they want, so if someone asks for something we will try and incorporate it into what we do. As I said before, we're not just a search provider, we're a support partner and our
technology plays a huge part in that. What are the current hot topics with regards to the search industry and the conveyancer? As I have mentioned, compliance with identity checks and cybercrime are certainly a hot topic. Fortunately we have all the tools a property lawyer needs to ensure that they are carrying out the correct checks for themselves and their clients. What’s on the horizon for the next year or so? Obviously the merger with PIE which will strengthen our offering. The Land Registry is (slowly) moving ahead with the digitisation of the Local Authority Land Charges records so we are looking forward to integrating with that in the fullness of time. Plus the appeal at the High Court in the Mishcon de Reya case (relating to fraud, due diligence and breach of trust) will be heard in the autumn and there may well be new guidelines arising from that. How will the merger with PIE strengthen your offering? Whilst PSG and PIE will continue to trade separately, we will look to share some resources, technology and best practice to drive efficiencies and innovate new products and services to benefit both our customer bases. PSG and PIE share the same vision to become strategic partners of the law firms we work with to help them grow, knowing their success will lead to ours. The tech teams from both businesses are already working on some exciting projects the future PSG had already ramped up their technology over the last couple of years, what can we expect to see next? Our IT pipeline is always jam packed but the added expertise and resource at PIE will really accelerate the internal workflow in that area. We have previously concentrated on integrating with new suppliers to provide the latest products or simply just making sure that our online ordering platform PSG Connect is as hard working as it can be by adding new and improved features. There are a few big things on the horizon such as
Hertfordshire Law Society Gazette
Advertorial
our SDLT and HMRC integrations, case management solutions and a specialist commercial platform which is in development as we speak. With the change in the CPD regime do you still offer training?
I hear you have a special birthday coming up? We do! The Property Search Group is 20 years young in the autumn so we are looking to organise some appropriate events to celebrate the milestone.
We certainly do. In fact this year, Louise and I have provided more hours of CPD via in-house ‘Lunch & Learn’ seminars than any previous year. Within that more informal environment we find that clients definitely get more out of the session than in the more formal 3 hour CPD events we used to run. Plus they get fed and can avoid the progression of calls from their clients and estate agents!
Has much changed in the last 20 years?
We are looking to offer a program of CPD events for members via the Herts Law Society in the autumn
Environmental and Chancel issues led to the birth of those products and today there are a potential plethora of searches and an online system to
Aside from the grey hair, the industry is fairly unrecognisable from when I started. There was only really one search – the local authority search as an official search or a personal search. Even the Drainage and Water search wasn’t a standard requirement with conveyancers just getting a copy of the water bill.
support the conveyancer in their due diligence for the client. Over the years we have also added title insurance, compliance solutions and case management systems to our arsenal so that means that there's no need to go anywhere else for anything, even training and compliance support. For further information on searches, title insurance, compliance solutions, in-house CPD, and case management systems please contact Nick and his team on 01707 386101, nickwild@propertysearchgroup. co.uk or look them up for news and events at www.psgconnect.co.uk/ hertfordshireandbedfordshire/ and on twitter at @PSGHertsBeds
Experts in 21st Century By Phillip Taylor MBE, Reviews Editor of “The Barrister” and Head of Richmond Green Chambers
T
he Expert Witness Institute (EWI) has a new chairman Martin Spencer QC. In one of his first comments, he says that “it has never been more important to highlight the critical role expert witnesses play in supporting the proper administration of justice and to establish the highest standards of best practice”. And he is absolutely correct! Use of expert evidence in legal proceedings has been a long-standing tradition, with the first recorded use of an expert witness in the UK courts being recorded in 1782 and now subject to stringent procedural rules which all experts should have a working knowledge of.
http://www.hertslawsoc.org.uk/
In the litigation cycle expert witnesses play a vital role across civil, criminal and family proceedings in the administration of justice. An expert witness is someone who, by his/ her training, education, skill, or experience, is known to have specialised expertise or knowledge so that other people may rely on their opinion.
the increased use of DNA evidence. In civil and family courts, experts cover areas such as forensic accounting, civil engineering, medical, and many more. It is recognized that, with litigation entering increasingly complex areas, the effective use of a good expert witness is increasingly important.
“In providing independent assistance to the court by way of objective, unbiased opinion in relation to matters within their expertise, they make complex issues understandable to lawyers, judges and juries” declares Spencer.
“There is no doubt that high quality expert evidence will continue to play an important role in all court proceedings” says Spencer. He adds that “there will always be a need for expert opinion about questions that are outside the knowledge, skill and experience of the court”.
The Procedure Rules for court work are quite clear – the expert performs his or her duty to the court. That duty overrides any obligation to a party from whom the expert is receiving instructions. The ‘knock-on’ effect with modern litigation is that the number and types of experts are increasing. “They have become an integral part of the court process” declares Spencer. Many lawyers use experts in criminal proceedings in areas as diverse as accident investigations, forensic linguistics and
To meet this challenge, instructing lawyers need to ensure they work only with experts who understand their duties within the latest procedure rules, and experts need to take responsibility for their development and training to ensure they meet the highest standards which the EWI oversees so effectively as the importance of experts grows with the changing face of litigation in 21st century.
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Andrew Munro BSc (Hons) CEng MICE MCIHT • Fraud, including evasion of VAT and Excise Duty
• Directors misfeasance & disqualifications • Wrongful and fraudulent trading
• MTIC, advance fee and boiler room
I have over 30 years’ experience in highways design and construction, and I am an expert in the field of highway engineering and design. My expert services cover all aspects of highway and civil engineering projects, from car park construction to motorway design. This includes reporting on technical details, working practices, statutory requirements, and industry good practice.
• Partnership and directors disputes • False accounting and money laundering • Business valuations • Charity, PAYE fraud and tax cheat • Mortgage fraud • Drug offences • Proceeds of Crime Act (POCA)
• Preparation of detailed reports which clearly set out the issues and conclusions • Assistance at Court including Expert to Expert consultation and giving evidence • Appointment as joint expert
The way I work is to provide an initial opinion, then a thorough report if necessary, providing my opinion on the technical aspect of the matter in detail. I am fully familiar with the obligations on Experts placed by the Civil Procedure Rules. I can provide expert analysis of: • procedural lapses • project pathway compliance • design and construction flaws • highway design and construction • highway maintenance • contractual obligations
Munro Consulting 44c High Street, Chippenham Ely, Cambridgeshire CB7 5PR Tel: 0333 577 0073 or 01638 563627 enquiries@munro-consultants.co.uk
Mr Colin John Read MBChB
Consultant Orthopaedic & Trauma Surgeon
Areas of Expertise: • General orthopaedic trauma. • Injuries to the spine and chronic spinal pain. • Disorders and injuries to the foot and ankle. • Personal injury and negligence.
FINDING YOUR VOICE IN TODAY’S DIGITAL AND PRINT MEDIA
Colin Read Medical Services Ltd 7 Hemel Hempstead Road Redbourn ST ALBANS Hertfordshire AL3 7NL
01582 793903 info.read@gmail.com
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East Park Communications Maritime House, Balls Road, Birkenhead, Wirral CH43 5RE 0151 651 2776 simon@epc.gb.com www.epc.gb.com
Hertfordshire Law Society Gazette
Advertorial
Cybersecurity issues central as experts agree firms should view them as a serious business risk W
e have brought together leading experts to discuss cybersecurity risks to coincide with our spring update to the Risk Outlook. Our roundtable involved leading agencies and experts from a range of sectors to discuss how businesses can tackle the risks of cybersecurity. As well as us, there were representatives from the Information Commissioners Office, Barclays, Advent IM, National Crime Agency, IASME & UK Cyber Forum, BGi.Cyber.Ltd., Pelican Underwriting, QBE Insurance, Cyber Strategies, PA Consulting and Microsoft. There was general agreement that law firms are an attractive target for criminals not only because they can hold large amounts of money but also valuable client information. Three key themes from the roundtable were that: • Too often cybersecurity is viewed as just an IT risk. It is a business risk that requires engagement and ownership at a senior management and Board level. Training staff is important, but businesses also need to develop a culture where cybersecurity is treated as a serious priority. • People and processes are as crucial as technology. Law firms should consider having rigorous and unambiguous procedures for when clients notify them of any changes to
http://www.hertslawsoc.org.uk/
their personal information or bank details during a transaction. • The use of unsupported software increases an organisation’s vulnerability. In addition to addressing this risk, businesses should also consider the benefits of implementing Cyber Essentials - a Governmentbacked scheme to help organisations protect themselves against common cyber attacks. The roundtable coincides with the publication of our spring update to its Risk Outlook, which highlights seven priority risks for the legal sector. It shows that three quarters of all cybercrimes reported to us involve email modification fraud. Half of all such reports are email modification frauds against conveyancing proceeds. It says any field of work which involves client money is at risk, with probate another common target.
that means we are all vulnerable to cybersecurity risks. These risks evolve rapidly. Whether it is money or sensitive client information, law firms are an obvious target. It is the job of firms to take steps to protect themselves and their clients, but we want to help. “So in addition to regular updates and conversations with firms, we also want to make sure we learn from insights across all sectors. It was clear from our roundtable how similar the issues are. By working together we will
be in much better place to stay cybersecure.” The update of the Risk Outlook is available here: (http://www.sra.org.uk/risk/ outlook/priority-risks.page) We published a detailed report into the IT security at the end of 2016: (http://www.sra.org.uk/risk/ resources/information-securityreport.page ) Neil Kevan Trust & Probate Underwriter
We are committed to taking a constructive and engaged approach with firms when they fall victim to cybercrime. However, the risk update does highlight that we will take action where firms are not proactive. For instance it has this year issued rebukes in cases where a firm has failed to report the loss of client money or been slow to remedy client losses. Paul Philip, SRA Chief Executive, said: “We all benefit from information technology, but
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Editorial Advertorial
Mapping Environmental and Planning Risks one such option. It presents the findings previously provided in four separate environmental reports in one order. Now, flood risk, contaminated land, ground hazards, and ‘Energy & Infrastructure’ are assessed and provided to the homebuyer in one report. This is further supplemented with advice and recommendations from expert environmental consultants, Argyll Environmental.
P
rospective home buyers take the time to find the home that ticks as many boxes on their wish list as possible; right location, number of bedrooms, outside space and in the right price bracket, to name just a few. They may have also undertaken their own research into areas such as school catchments, nearby shopping or leisure facilities, or to check the locality for local parks, pubs or other places that are important to them. Homebuyers do however tend to rely on their legal professional to be their final ‘eyes and ears’ when it comes to understanding any potential ‘risks’ that may not be immediately apparent when undertaking their own research. For example, is the property at risk of flooding? It may have been a sunny day when viewing the property, but what happens in times of bad weather? Is the property connected to mains drainage or does it have its own sceptic tank? Or, perhaps there is a new development planned in the field next door, which could impact not only the enjoyment or views from the property, but potentially its future value. Importantly, if a homebuyer doesn’t believe vital information was made available or explained to them as part of the conveyancing process and they later come to have an issue, they may be in
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a position to pursue a legal negligence case against the conveyancer. From a solicitor’s perspective, it is therefore vital to demonstrate that full and proper due diligence has been undertaken. What’s the answer? In recent months, legal search reports have taken a great leap forward to provide solicitors and their clients with extremely user-friendly options that provide clarity relating to a wide range of areas. Today, ‘digital bundles’ are available that provide not only environmental and local planning due diligence via an electronic PDF report but also offer the opportunity to assess the findings via an online mapping viewer. By accessing the mapping tool, users can easily ‘drill in or out’ of the map, to see exactly what risks are present, and where, in an instant. This makes it extremely easy to see the results being presented and identify where further investigation is needed, prior to the sale completing. Mapping Environmental & Planning Intelligence Landmark’s RiskView Residential is
On top of this, local planning applications, land use designations, rights of way, housing and neighbourhood demographics are also provided via Landmark’s Plansearch Plus report, meaning it takes seconds to identify whether any planning applications may have an impact, enabling the client to determine whether this is an issue for them or not. Clients can quickly see where any environmental risks may be present within 250m of the property, in addition to active/pending/approved residential and commercial planning applications up to a 750m radius via the mapped viewer. Plus, with everything visible on an Ordnance Survey map, it’s extremely easy to see where the risks are. As such, clients can be confident that a rigorous assessment has been undertaken, creating peace of mind, and demonstrating compliance (and best practice) from each conveyancer’s perspective. By accessing an all-in-one search report, it not only speeds up transaction processing thanks to the concise delivery of information, but saves even more time and closes a compliance gap by removing the need to identify a different suite of search reports for each and every transaction. Angela Gordon-Lennox Landmark Information www.landmark.co.uk 0844 844 9966
Hertfordshire Law Society Gazette
Editorial Advertorial
Cybercrime: how do you protect your law firm from ransomware threats? R
ansomware threats to law firms have increased at an alarming rate over the last eighteen months. As a leading supplier of practice management software, at LawWare we occasionally hear apocryphal stories about firms who have paid the ransom rather than risk downtime and data loss. What is ransomware? Ransomware is computer malware that installs itself covertly on a victim’s computer or network. It then executes a cryptovirology attack that adversely affects it and demands a ransom payment to decrypt it. Simple ransomware may lock the system and display a message requesting payment to unlock it. More advanced malware encrypts the victim’s files, making them inaccessible, and demands a ransom payment to decrypt them.
The more often you backup your data, the less you will lose. It’s worth thinking about your backup frequency and just how much data your practice can afford to lose without affecting its performance. Keep your software up-to-date. Ransomware often relies on the victim running outdated software where vulnerabilities are known. To combat this, the best approach is to create protocols for ensuring updates are performed when necessary. Keeping common third-party software such as Java and Flash up-to-date will eliminate a large number of threats.
Protection checklist.
Educate your staff. Your staff are the weakest link in the security chain. If they allow themselves to fall victim to a phishing scam or other email generated approach, they can compromise the security of your entire business. Teach fee earners and staff to recognise potential threats and to treat unrecognised or unsolicited mails with extreme caution. Train them to ask these key questions about emails: • Do I know the sender? • Do I really need to open that file or go to that link? • Did I really order something from this company?
Backup all your data. By far the most important weapon in your arsenal is a regularly scheduled backup. If you are subject to an attack you can simply wipe your system to eliminate the ransomware and re-install the backup.
Avoid being infiltrated. Occasionally your staff may unwarily visit compromised websites or open emails that contain malvertising. These are the usual sources from which the infiltration and malicious downloads will come. By blocking access to malicious
Ransomware attacks are typically carried out using a Trojan that is disguised as a legitimate file. The ransom is almost always demanded to be paid in the digital currency, Bitcoin. Here are a few simple tips that can be put in place to mitigate the risk.
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websites, emails and attachments you can protect your network and avoid problems. Use high quality antivirus software. There really is no excuse for being lax in this matter. Making use of a good quality antivirus solution throughout your entire system is a must. Ensure all laptops and portable devices that interact with your network have the same levels of protection as the network itself. Know the enemy. Intelligence about the latest threats provides you and your IT staff with advance warning about cyber-crime activity in your area and industry. You can keep up to speed with the latest reports from cyber intelligence organisations such as Talos. Talos publicly shares information about emerging threats and provides forums and instructional videos to help you keep ahead of the game. Finally, say no to ransom demands. You may be tempted to pay up and recover access to your data to avoid both inconvenience and real operational problems. This should be the last thing you think about! Make sure you notify the authorities and remember, succumbing to the demands will only encourage the criminals to make further attacks. Mike O’Donnell, LawWare Limited.
Hertfordshire Law Society Gazette
Editorial Advertorial
Top tips on combatting fraud T
he well-publicised Mishcon de Reya £1 million fraud case, when its client was duped into buying a London property from a seller dishonestly posing as the owner, has sent ripples of alarm throughout the legal community. Although conveyancers are an obvious target for the increasing threat of rogue house owners and buyer deposit redirection fraud, it’s not just conveyancing practices that need to be on their guard. As a legal practice, you’re tempting prey for cyber criminals, not only because you hold large sums of money, but also vast volumes of valuable client information. The number, variety and sophistication of cybercrime grows daily, ranging from distributed denial of service attacks and phishing scams to hacking and ransomware. To qualify my argument, here are some recently quoted cybercrime statistics:• National Fraud Intelligence Bureau’s 2016 figures show 159 recorded losses of buyer deposits which is an 85% year-on-year increase • Office of National Statistics quotes 5.8 million cybercrime incidents which equated to 40% of all recorded criminal activity in 2016 • Action Fraud estimates the cost of cybercrime is currently £193 billion per year • BIS Information Security Breaches Survey revealed that 81% of large organisations have experienced a security breach with the cost per company being, on average, between £600,000 and £1.5 million And this is only the tip of the iceberg. Underreporting is a big issue. Many cybercrimes go unreported for fear of criticism and disciplinary action. You have a professional responsibility, enforceable by industry regulators, to identify, contain and remediate breaches, cyberattacks included. Aside from your regulatory obligations under the SRA Code of Conduct, you face new pressures from indemnity insurers who’ll want to see plans in place to thwart criminals when renewing policies and setting premium rates including run-off cover. There’s a plausible case for the need for a separate cyber insurance policy, over and above PII, to address the risks posed by
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cyber criminals and assist the recovery of potential losses incurred.
hard-earned profits aren’t ending up in the greedy hands of racketeers.
Not forgetting your other compliance responsibilities. The Data Protection Act 1998, Money Laundering Regulations 2007, Proceeds of Crime Act 2002, Terrorism Act 2000 and new EU General Data Protection Regulation applicable from May 2018 to name a few.
Also, tell clients upfront – both face-to-face and within your client care documentation – that you’ll never ask them to send money to a different account than that already provided. That way, they can be on the lookout too and immediately contact you should they receive any communications of this nature.
The stakes are high but there’s much you can do to mitigate risk by creating a robust, reliable and secure cyber environment. Access our previously published ‘Desktop security: 10 top tips’ article for more in-depth advice on how best to manage risks within your IT infrastructure. We cover topics such as operating systems, email attachments, file transfers, data back-ups, passwords and more. Visit www.quill.co.uk/desktopsecurity. Because cyber security is such a serious business risk, we’re extending our earlier guidance here with some top tips on combatting fraud so that you can take proactive steps to tighten your defences:Beware of outside-of-the-norm behaviour and requests for monies According to the Solicitors Regulation Authority (SRA), 75% of cybercrime reports are so called ‘Friday afternoon frauds’. These cases involve criminals intercepting and altering emails being sent between two parties (solicitor and client), mostly bank details in order to redirect funds. If you’re suspicious, raise queries, several times if needs be, and ideally via a known telephone number. As part of this, you could set up a dummy run with a £1 transfer. Once receipt’s been confirmed, you’re ready for the real McCoy. If it turns out to be completely legitimate, those concerned will appreciate your stringent questioning and testing. Review your new client intake procedures When new clients instruct your firm for their legal matters, what checks do you carry out on them? A cursory glance at someone’s passport, driving licence or utility bills is no longer sufficient for purpose. Seek out as much detail as possible on both identity and credit history so that you’re confident your clients are who they say they are, have the means to pay for your services and that your
Define your client money handling processes Money is of course the biggest incentive and the SRA’s referred to £7 million of client money being lost to cybercrime in the last year. With the SRA Accounts Rules at the forefront of your mind, make a clear distinction between client and office monies, assign duties to your cashiering team members, designate reporting lines and outline timescales throughout. For example, you may specify only appointed staff should transfer money and make it a habit to take deposits as late as practicable so there’s less money on account at any given time. As well as giving your clients a higher level of service, you’ll lessen the risk of financial theft. Create disaster recovery and business continuity plans To form an adequate series of responses to unexpected emergencies, attempted crime amongst them, produce carefully written disaster recovery and business continuity plans. These will contain information on the types of crises which could befall you, how you should act if they do, roles of primary staff members, phases of recovery, emergency contact numbers, anticipated outcomes and records of test or genuine disaster situations. The ultimate objective is to put your firm in the strongest position to deal with critical incidents with minimum disruption to the running of your business. This is yet another area we’ve written about extensively before. Read our ‘Top ten disaster recovery and business continuity planning tips’ for further details. Visit www. quill.co.uk/disaster-recovery-planning. Develop a risk management policy and monitor activity Prevention is always better than cure so set out your preventative and detective
Hertfordshire Law Society Gazette
Advertorial
measures within a risk management policy. These may comprise IT-based solutions such as SSL encryption and anti-virus software to physical security devices such as CCTV surveillance and burglar alarms. Your policy will address how to classify, deal with and communicate risks. Analyse your business closely for signs of unusual activity that could indicate the beginnings of an attack. The sooner you’re able to counteract possible violations, the better, to effectively stop criminals in their tracks. Report every failed and successful attack There’s an onus on you to do so, and the legal profession can only clamp down on cybercrime if we truly know the extent of unlawful activity and methodologies employed. With more two-way conversations, trends can be recognised, scams identified at an earlier stage, alarms raised to others and appropriate responses carried out. Notify the SRA, Action Fraud, Information Commissioner’s Office and / or your insurers.
http://www.hertslawsoc.org.uk/
Consider your employees’ role in your business and engage your workforce in bestpractice risk management Restrict certain tasks in your business, for example software installation, to assigned personnel. Small steps such as these can go a long way to minimising exposure to risk. One weak link is all it takes to open your business to intrusion. Similarly, if you employ home and remote workers, you’ll want to restrain use of unapproved devices and removable media, both of which carry their own security risks and can uncover your entire network to vulnerabilities. Set up some safe parameters for your staff to adhere to then educate your personnel in IT best practice. Evaluate your IT systems and suppliers We’ve already briefly mentioned the importance of running the latest operating systems, performing automated back-ups, installing firewalls, and using dedicated anti-virus and anti-spyware software for protection against hackers. There’s readily available software to reduce risk even more. Anti-money laundering checks, credit
screens, conflict of interest searches, proof of identity document capture and breach warnings will preserve your matters and their associated finances. Or, you can go a step further and enlist extra back office services such as fully outsourced cashiering and payroll. Your outsourcing provider’s keen attention to detail will immediately highlight anomalies and alert you to dubious goings-on. Remember the SRA Code of Conduct here. Ensure outsourcing agreements – be it for cloud software or outsourced services – allow you to comply with your client protection duties. And ask about ISO certifications for reassurance that your supplier conforms to international security standards. Julian Bryan, Managing Director, Quill Pinpoint Julian Bryan joined Quill Pinpoint as Managing Director in 2012 and is also the Chair of the Legal Software Suppliers Association. Quill is the UK’s largest outsourced legal cashiering provider with 40 years’ experience supplying outsourced services, legal accounts and practice management software to the legal profession. To contact the Quill team, call 0161 236 2910 or email info@quill.co.uk.
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Advertorial
Many Happy Returns
W
hen we decided, nearly 10 years ago to adopt index tracking funds into our client’s portfolios, the investment industry was quite different to today.
order to try and consistently outperform the underlying market (and therefore outperform index tracking funds) will face a difficult and therefore expensive task. That is not to say it is impossible, it is just that the millstone of higher fees makes it much more challenging for active funds to be able to offer value for money in the form of superior fund performance.
In 2007, investment processes were less precise, Margot Robbie had yet to explain what a sub prime mortgage was, and index tracking funds were only used by investors who “weren’t capable of picking a talented fund manager”.
Apart from fund performance, one must also consider the degree of risk that is held within an investment portfolio. This is a particularly important consideration for trustees who are aiming to produce a prudent balance between investment risk and investment returns. Suppose the underlying funds are actively managed by a “star” fund manager who has set out his stall as a stock-picker. How can you be sure that the overall asset allocation remains appropriate to meet the trust’s objectives? What if the star manager decides he doesn’t like the look of the market and stockpiles cash? What happens if he thinks oil stocks will be the next big thing and he triples his exposure to this sector? All of a sudden your asset allocation has markedly changed and the portfolio’s risk characteristics are no longer appropriate to meet the trust’s objectives. You may have backed the right horse, but you’ve got the wrong jockey on board!
The theory went that active fund managers could produce superior performance for investors by “stock picking” the best companies to invest in. Furthermore, they were able to “time the market” by investing more money into shares when they were expected to rise and vice versa. By contrast, critics said that tracking funds were blunt instruments that blindly invested into both good and bad assets. The only benefit of using tracker funds was said to be that they attract lower management fees. Ten years later, what lessons have we learned from our use of tracker funds? Firstly, the cost differential is still a major factor to consider. A typical index tracking fund now has a published fee of around 0.15% per annum, with additional unpublished dealing costs contributing an extra 0.05% per annum. The average cost of an actively managed fund comes in somewhat higher, with published headline fees of around 0.75% per annum, and unpublished dealing costs adding a variable fee that could easily equate to an additional 1.4% per annum.
A more prudent way to manage a portfolio would be to use tracker funds where you know that your asset allocation will be as accurate as possible with no risk of drift caused by the proactive jockey. Whilst the major benefit of such a strategy is the perfect replication of the desired asset allocation, there is of course the welcome by product of low cost and therefore higher than market average returns.
An investor who uses active funds in
This is borne out by the performance we have generated through our range of risk graded model portfolios. At each level of risk, we have been able to generate superior returns, with less volatility than the respective RTMA (Risk Targeted Multi Asset) sector average performance levels. The chart below shows that our Defensive and Balanced strategies (the blue dots) have each produced better performance, than the average multi asset funds (the red dots) for both low and medium and risk investors. In our experience, investment solutions populated by active funds produce more variable fund performance than those using tracker funds. Just because funds can frequently trade to react to prevailing market conditions, it doesn’t mean that they should. It is not easy for an actively managed fund to consistently outperform the market as a whole, but the increased levels of fees will definitely create a significant drag to that fund’s performance. It is important to always keep an eye on the big picture and remember that we are investors, not speculators. As unfashionable as it may sound, the most consistent method for delivering steady, risk-controlled returns is to choose a low cost, diverse long term strategy and then stick to it. Philip Bailey Provisio Wealth Management 01462 687 337 pbailey@provisio.co.uk Provisio is authorised and regulated by the Financial Conduct Authority.
% 105.0
Mean Ann. Volatility of 7.87
100.0 95.0
Performance
90.0 85.0
Mean Performance of 79.15
80.0 75.0 70.0 65.0 60.0 55.0
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8.0 Ann. Volatility
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31/05/2008 - 31/05/2017 © FE 2017
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Editorial Advertorial
The biggest change to AML in a decade V
ery soon after the election, we expect the “Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 to be enacted. As yet, they are still in draft form and subject to change. Much of the 2007 regulations remain intact, however, there are considerable amendments and additions and below are highlighted those most relevant to lawyers. Risk Assessment Each firm will have to prepare a risk assessment. This will involve taking reasonable steps to identify and assess the risks your firm faces, and keeping a written and up to date record of those steps you have taken. When compiling your risk assessment, you should consider: • Who your clients are • Where your clients, or their funds are coming from • The services you are providing to your clients • How you provide services to your clients • Size and nature of your business Whilst it is not possible to prevent entirely the risk of being targeted by criminals, having a robust risk assessment will justify the steps you took.
Policies, controls and procedures You must establish and maintain policies, controls and procedures to mitigate and manage the risks which you have identified in your risk assessment. They need to be proportionate to the size and nature of your business. Your policies must provide for the scrutiny of complex and unusually large transactions. This means each matter will need to be risk assessed. You should consider the due diligence information which has been obtained, and the nature of the instructions. The main question that lawyers need to ask themselves is does the transaction make sense? Internal Controls The internal controls which you must implement will depend on your assessment of the size and nature of your business. You may need to • Appoint an individual who is on the board, or equivalent as the officer who is responsible for compliance with the regulation • Carry out screening of relevant employees and agents. • Establish an independent audit function to examine the effectiveness of the policies
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Training The training you provide must now also include training on Data Protection and the obligation to train extends to agents.
Customer Due Diligence (CDD) CDD is not just required at the beginning of a relationship with the client, but also must be applied when you become aware of changes in the circumstances of an existing customer. There are some important additions to the 2007 regulations in relation to a body corporate, namely • The memorandum of association. • Where the client is beneficially owned by another person you must now also to verify the identity of the beneficial owner. • Where the beneficial owner is a legal person, you also need to understand the ownership and control structure of the beneficial owner. • These requirements will not be satisfied by relying only on the register of people with significant control. • If the person instructing you is acting on behalf of a client, you must verify that person It is also important to note that the definition of beneficial owner of a trust has been extended to now include settlor, the trustees, the beneficiaries or class of beneficiaries and any individual who has control of the trust. Enhanced Customer Due Diligence (EDD) The Regulations are more prescriptive as to when EDD measures need to be applied. You must apply EDD when the case is high risk. When assessing whether a matter is high risk, you must consider regulation 33(6) including amongst others, customer, service and geographical risk factors. EDD means examining the purpose of the transactions and increasing the frequency of monitoring. You may also seek further independent verification of the information you have been provided, take more steps to understand the ownership and financial situation or to ensure the instructions fit the client’s business. PEP definition This has changed to include domestic PEPs and widened to include members of governing bodies of political parties and on the board of international organisations. Simplified Due Diligence (SDD) and Pooled Client Accounts. In relation to the client account, banks can apply SDD provided that • The firm presents a low degree of risk, and • Information on the identity of the person on whose behalf monies are held in the
PCA are available on request and within 2 working days
You will need to ensure that you have explained to the client that, if the bank requests information about who you hold funds for, you will be required to provide that information. The client needs to consent to that. Data Protection You must provide new clients with a statement that any personal data received will only be processed for AML and CTF purposes. Data must be retained for 5 years following the end of the business relationship but then deleted unless you are required to keep it by law, or the data subject has given express consent for its retention. You will need to ensure that you have the client’s express consent to keeping the data for longer than 5 years. ‘The Biggest Change to AML in a Decade’ is a series of short succinct articles which looks at some of the main issues directly affecting solicitors. Whilst the final regulations are yet to be finalised, it is clear, that in a relatively short period of time, solicitors firms will need to make a number of changes to their policies and procedures to comply. To stay up to do date with the latest developments and to receive the latest articles in this series, email solicitors@uk.lockton.com or visit www. locktonsolicitors.co.uk About Amy Bell Amy Bell is Risk Management Consultant for Lockton, award winning providers of effective risk management solutions. With over 12 years’ experience advising law practices across the UK and globally, Amy helps firms to adapt to the changing legal landscape and how to adopt best practice in implementing compliance procedures.
Through consultancy with partners, Amy provides training and support for everyone in the firm to help understand compliance and how to apply risk management principles to improve client service and deliver maximum efficiency. She is the Chair of the Law Society’s Money Laundering Task Force, where she represents the Solicitors profession at Government and in Europe. She is also the author of the Law Society’s Anti-Bribery Toolkit. To learn out more about Lockton’s Risk Management Training and Consultancy services please visit www.locktonsolicitors. co.uk
Hertfordshire Law Society Gazette