Complaint Resolution Compliance Solutions
Welcome to our October newsletter. CRCS Legal provides comment on matters that are relevant to you and your firm. We offer a cost effective, outsourced Complaint Resolutions and Compliance Solutions to ensure that you remain compliant, tailored to your needs. Please contact us for a free, no obligation chat about what your firm requires-0330 2210511 or enquiries@crcslegal.com
Have you got systems in place to deal with residual client balances?
A north London firm which failed for more than a decade to properly deal with residual client balances has been fined by the SRA. From 2008 to 2021 it allowed almost £105,000 to be built up in the client account by failing to address inactive or completed matters.
When a matter has ended but the firm still retains client money, regulations state that clients must be informed in writing every year and systems must be in place to return money promptly.
An SRA notice said that the firm did not have procedures in place to deal with these residual balances, and its systems did not identify receipts in the client account.
The SRA notice also said that the firm allowed its client account to receive, hold and transfer funds in relation to rent and rent deposits. This breached the rule that firms may not provide a banking facility through the client account.
The firm was fined £14,116 and agreed to pay £600 costs.
Please contact us if this is a problem as your firm. We are here to help.
Misleading clients and the consequences
How compliant is your Compliance Officer
A solicitor who misled several clients about the progress of their matters was struck off the roll.
Over four years, the solicitor, who was a partner and compliance officer:
made statements to a client regarding lodging an injunction and a hearing date which were untrue and which they knew, or ought to have known, were misleading.
advised clients that a leasehold extension had been obtained on their behalf, including providing a “tribunal-approved version” when there had not actually been any proceedings.
gave repeated assurances in a grant of probate that matters were progressing when the process hadn’t started, and
mishandled an estate by failing to contact a deceased client’s ex-spouse about the sale of a property which they knew, or ought to have known, was jointly owned.
Three separate claims were later brought against the firm. The firm has since had to close, primarily because of higher professional indemnity insurance (PII) premiums.
Given the admission of dishonesty, the SDT found the only appropriate and proportionate sanction was to strike the solicitor off the roll, accepting an agreed outcome in which dishonesty and recklessness were admitted. The solicitor also agreed an order for costs of £17,995.
This is case is a reminder that everyone needs to be supervised. Speak to CRCS today about our file auditing services.
Immigration services
Does your firm offer immigration services?
The SRA has issued a warning notice to solicitors and law firms reminding them of the rules and requirements they must adhere to when providing immigration services to clients.
The notice reminds solicitors of their obligations to uphold the rule of law and to act with honesty and integrity. Specifically in the context of immigration this means they need to:
Make sure clients provide honest and accurate information in any applications.
Not be complicit in providing false or fabricated information or claims or making applications that are totally without merit.
Provide clients with realistic assessments on the strength of any potential case.
The SRA say that the warning notice focuses on themes that they have picked up through recent investigations.
Most recently, in July 2023, the SRA intervened into three firms and made an order restricting the practice of a further individual, as a result of evidence supplied by the media.
World Mental Health Day
The SRA issued updated guidance in May 2023 on the issues of wellbeing and those surrounding the risks of failing to protect and support colleagues at work. The SRA set out the main standards that apply to solicitors, and to law firms and those responsible for their culture and the systems in place within them.
This is the link to the guidance. SRA | Workplace environment: risks of failing to protect and support colleagues | Solicitors Regulation Authority “
The new rules are 1.6 of the SRA Code of Conduct for Firms and 1.5 of the SRA Code of Conduct for Solicitors RELs and RFLs.
The version in the Code for Firms states:
“You treat those who work for and with you fairly and with respect, and do not bully or harass them or discriminate unfairly against them. You require your employees to meet this standard”.
The version for individuals requires that if you are a manager “you challenge behaviour that does not meet this standard”.
Law Care has seen a 24% increase in the number of legal professionals contacting it for support so far this year. As you may know, Law Care are a charity that offers free, confidential, emotional support to anyone working in the law. They have issued new guidance on protecting mental health at work – Protecting mental health at work | LawCare
Extension of Fixed Recoverable Costs – Client Costs Information
Changes to the fixed recoverable costs regime came into effect at the start of the month. You might need to review the costs information you give to clients, including how they might need to cover any shortfall, or circumstances where they might be responsible for the other side’s costs.
The Government confirmed that fixed recoverable costs will be introduced in lower value clinical negligence claims in April 2024.
Please contact CRCS if you would like us to review your client care and costs information.
How we can CRCS Legal Ltd help?
The risk of non-compliance is real, serious and costly. We can provide:
A comprehensive compliance and web-site health check. A thorough look at your policies and procedures with solutions for any non-compliance.
Technical compliance support on an ad hoc or retainer basis. This will give you direct access to compliance professionals.
Complaint handling and assistance with the Legal Ombudsman (LeO) We can investigate the complaints, make recommendations and draft your complaint response. We have years of experience of dealing with Le0.
Compliance training – one off training courses and comprehensive training programmes. We can help you comply with the SRA’s continuing competence requirements.
File reviews and audits – detailed and in-depth reviews in accordance with the SRA supervision requirements.
Bespoke Compliance policies, procedures and templates.
Assistance with Lexcel accreditation and visits
Anti-Money Laundering (AML) – a review of procedures and policies update
Transparency rules – Are you publishing the correct costs and complaints information?
GDPR and the ICO – including managing data breaches and SARs.
Advice on PII renewal
Assistance with SRA investigations and prosecutions
Merger and Acquisitions- assessment of regulatory compliance issues and due diligence.
Take control of your risk and contact us today for a free confidential discussion about you and your firm’s needs : 03302210511 or e-mail enquiries@crcslegal.com.
