The Work of the Supervision Function at the SRA

1. The Work of the Supervision Function at the SRA Suki Gill – Manager Sue Heads – Team Leader 2 October 2014

2. Our Purpose • To protect consumers of legal services; and • Support the operation of the rule of law and the proper administration of justice.

3. Who do we regulate? • Solicitors – 163,015 on the Roll of which 130,812 have Practising Certificates • Registered European lawyers, registered foreign lawyers, and exempt European lawyers – 4904 • Around 11,300 firms authorised by the SRA, diverse range of firm type, size, turnover and profitability • All owners, managers and employers of SRA regulated firms • All these individuals need to comply with the requirements of the Handbook

4. Supervision • Supervision directorate of over 100 staff based in Birmingham and London • Broken down into: • Firm – based Supervision • Thematic Supervision • Regulatory Management

5. Supervising firms • Building a different relationship with firms, where firms are willing to engage with the SRA • Firms take responsibility for compliance and for achieving the right outcomes for consumers • Delivering risk based, targeted and proportionate regulation • Emphasising a proactive approach

6. Managing Risk • The regulated community is constantly changing and evolving, so supervision needs to be responsive to: • the risk a firm poses • its own management and mitigation of risk • its approach to, and history of, compliance • the level of constructive engagement with the SRA

7. Supervision Objectives • Deal with all high risk matters in a timely manner • Respond effectively to the risk of financial instability • Identify and respond to potential interventions • Progress major investigations and conduct issues • Respond to the risks posed by bogus firms • Increase active engagement with firms • Thematic Work • Impact of Legal Aid Reforms • The provision of advice in Asylum cases • Anti-Money Laundering and financial crime • Failure to cooperate with the regulator • Dispersed firms

8. What concerns us most • Top five risks to the regulatory objectives: • Misuse of client money or assets • Bogus firms • Lack of diverse and representative profession • Failure to provide a proper standard of service • Money laundering - Inadequate systems and controls over the transfer of money

9. Supervisory approach & tools • Engagement and investigation are not mutually exclusive • Our approach distinguishes between those firms that want to engage with us, and those that will not or cannot. • Desk based engagement and visits • Compliance plans • Conditions on PCs, ownership and authorisation • Regulatory Settlement Agreements • Disciplinary outcomes – rebukes, fine, publication • Referrals to the SDT • Intervention

10. PAUL MILTONCase Manager, Legal & Enforcement 2 October 2014 SRA enforcement : constructive ways to respond

11. How do we enforce? • Based on our published enforcement strategy • Encourages engagement with those who work with us to put things right but strong action where firms do not co-operate or where serious issues arise • Engagement is important even where disciplinary action taken • At heart: risk-based protection of public interest and credible deterrence

12. Enforcement tools • Obtaining documents and information • Conditions on Practising Certificates, ownership and authorisation • Internal Disciplinary sanctions – rebukes and fines • Referral to Solicitors Disciplinary Tribunal • Regulatory Settlement Agreements • Intervention

13. Constructive Responses to Enforcement Action • Seek independent expert legal advice early on • Tell us sooner rather than later which facts and allegations are admitted; explain clearly reasons for denials • Continue to narrow the issues • Take any remedial steps you can, especially to improve clients’ positions • If possible arrange to have legal representation at SDT hearing

14. Regulatory Settlement Agreements • Policy on RSAs is on our web site: • www.sra.org.uk/sra/how-we-work/decision-making/old-critera/regulatory-settlement-agreement-decision-to-enter-into.page • Regulatory decision accepted by the solicitor on agreed terms • Usually published for transparency • Proportionate outcome achieved at reasonable cost in the public interest

15. Regulatory Settlement Agreements The Agreement: • Is in writing and signed by both parties • States the facts • Contains admissions of failures to achieve outcomes • Identifies any remedial action to be taken • Imposes sanction where appropriate

16. Possible terms of an RSA • Agreed public statement • Implementation of schemes for correction, improvement and restitution • Practising controls • Removal from the Roll by consent

17. In summary • OFR is all about protection of clients and the wider public • Not all breaches require enforcement action • Co-operation with the SRA is key - the sooner the better but never too late! • Even if enforcement action taken, still sometimes possible to resolve by RSA/consent order or at least agree a statement of facts to save time and costs

18. Sources of support • SRA’s ethics helpline - 0870 606 2577 • Solicitors Assistance Scheme (SAS) for independent advice - www.thesas.org.uk • LawCare - advisory and support service for lawyers (www.lawcare.org.uk telephone 0800 279 6888) • Other networks and groups such as the Sole Practitioners Group, The Society of Black Lawyers, Lawyers with Disabilities Division, The Society of Asian Lawyers and Association of Women Solicitors.

19. Material breaches • Breaches that are 'material' must be reported to the SRA as soon as reasonably practicable • Mechanisms for reporting: • report@sra.org.uk • Factors to consider are : • the detriment, or risk of detriment, to clients • the extent of any risk of loss of confidence in the firm or in the provision of legal services • the scale of the issue • the overall impact on the firm, its clients and third parties • Have confidence in your judgement