Ethics and in house lawyers

A survey of 400 in-house lawyers, carried out by law professors from Exeter University and University College London in collaboration with flexible legal services provider Lawyers on Demand, has revealed that a third of in-house lawyers are sometimes placed in difficult moral positions.  The research found that:

  •  32% were asked ‘to advise or assist on things that made them uncomfortable ethically’
  •  45% were asked to advise on proposed company action which was ethically debatable
  •  In-house lawyers involved in the survey were ‘hazy (sometimes very hazy)’ on the content of the SRA handbook and their professional obligations
  • Eight out of 10 agreed their legal department had been criticised for inhibiting or slowing commercial decisions.

Read more about the study or download the report here.

BSB modernises its regulatory decision-making

The Bar Standards Board (BSB) has taken a number of steps to modernise its regulatory decision-making.  Recent changes include:

  • A new edition of its handbook – introducing new Enforcement Decision Regulations
  • The establishment of a new Independent Decision-making Body (IDB)
  • The creation of a new Independent Reviewer role to carry out requests for the review of individual decisions
  • The launch of a new website to make it easier for the profession and the public to access the information they need. It includes dedicated sections for the public, for students and for barristers and other legal professionals, containing everything they need to know about BSB rules and guidance.

Read more about these changes…

Reasonable adjustments in the provision of legal services: a report for the Solicitors Regulation Authority

The Competition and Markets Authority reported in 2016 that one of the major barriers to accessing and understanding legal services was a general lack of accessibility, particularly in how information is presented and shared.  Charities such as Citizens Advice and Age UK have suggested that this is of particular concern regarding people who, due to mental or physical disabilities, might face heightened challenges.

The Solicitors Regulation Authority (SRA) commissioned YouGov to undertake research with disabled people in England and Wales. The aim of this research is to explore the reasonable adjustments that solicitors and law
firms can make for legal services and information provision to be more accessible for disabled people.

Download the report

SRA to increase AML checks on law firms

The Solicitors Regulation Authority (SRA) has announced that they will be increasing checks on law firms after it found that 21 percent of the 400 firms consulted were not complying with anti-money laundering regulations.  The majority of firms were using templates and these firms’ risk assessments were generally of lower quality as firms appeared to take a ‘copy and paste’ approach without thinking through the specific risks and issues faced by their firm.

In light of these findings the SRA has updated its warning notice, provided additional support and guidance and plans to carry out an extensive programme of firm visits.

Read more about this story…

Independent review of legal services regulation in England and Wales

The Centre for Ethics and Law in the UCL Faculty of Laws is undertaking a fundamental review of the current regulatory framework for legal services in England and Wales, led by Honorary Professor Stephen Mayson. The independent review is intended in part to explore the longer-term and related issues raised by the 2016 Competition and Markets Authority’s (CMA) ‘Legal Services market study’ and its recommendations.  The interim report has just been published and is available here.

SRA consults on proposed changes to solicitor advocate assessments and qualifying requirements

The SRA has launched a consultation on proposals designed to make sure that high standards of advocacy are provided by solicitors.

Proposals include:

  • the introduction of revised standards for the Higher Rights of Audience qualification
  • the creation of a single, centralised Higher Rights of Audience assessment
  • the development of more online resources to help solicitors maintain and develop their advocacy skills
  • only solicitors with Higher Rights of Audience qualification should be able to undertake advocacy in more serious cases in the youth court.

Reports such as the Ministry of Justice’s Jeffrey Review and SRA’s own judicial perceptions research have suggested judges have concerns about the competence of some of the solicitor advocates appearing before them.

New SRA research suggests that one in three solicitor firms (32%) offer criminal advocacy, mostly focusing on guilty plea and sentencing hearings. Nearly 60% of firms provide advocacy services for civil cases, 47% in areas of family law and 32% at tribunals.

Read the consultation: Assuring advocacy standards

SRA resources to help solicitors prepare for new standards and regulations

The Solicitors Regulation Authority (SRA), has produced a dedicated webpage of resources for solicitors to help them prepare for the introduction of their new Standards and Regulation on 25 November.  The new Standards and Regulations aim to reduce bureaucracy, simplify rules and provide greater flexibility.  One of the key new requirements is for all law firm websites to use the SRA clickable logo, which uses smart technology to confirm to website visitors that a specific firm is regulated and what this means for clients.

Read more…

LSB updates governance rules to “enhance regulatory independence”

A new set of rules have been released by the Legal Services Board (LSB), which aim to clarify the separation between representative bodies and their regulators. The internal governance rules (IGRs) have been published following a series of public consultations that first began in November 2017. The rules which were released by the oversight regulator provide and define the relationship between the approved regulator and the regulatory body can be viewed here. Legal regulators now have one year to implement changes to bring themselves in line with the new rules.

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Solicitors Regulation Authority publishes Residential Conveyancing thematic review

A review about the service provided by solicitors to the public

Executive summary

Buying and selling a property is often the most expensive and important financial commitment a person makes in their life. Having access to reliable and good quality legal support really matters. It not only reduces stress and uncertainty, but potentially directly impacts on whether a purchase is completed, and what the long-term financial implications may be for all involved.

While most property transactions are completed relatively seamlessly, figures from the Legal Ombudsman (LeO) show that residential conveyancing accounted for nearly a quarter of all complaints it handled over the past three years.

Our own research of consumers, conducted in 2018, also identified that up to a quarter of recent home buyers were dissatisfied with some element of the service they received from their solicitor. One common area of concern was an apparent failure to fully explain the detail and implications of contractual commitments.

What we did

We carried out this thematic review to better understand how firms are delivering residential conveyancing services, and whether they are fulfilling their obligations to their clients.

We visited a sample of 40 law firms offering residential conveyancing services and conducted a detailed review of 80 case files.

What we found

We found that most firms were fulfilling their obligations. In particular, we found that:

  • all firms proactively communicated with clients at all key stages of a purchase, with the majority meeting them face-to-face at least once
  • all firms provided clients with clear information on their complaints procedures
  • firms are increasingly embracing technology, especially regarding how they communicate with clients.

However, we did identify areas for improvement. The two most significant and widespread were:

  • inaccurate initial cost estimates – 34% of firms failed to include all the services/fees a matter could reasonably expect to attract in their initial quotes
  • not being open about the real cost of third-party disbursement and their firm’s mark-up on these – specifically telegraphic transfers. In 37% of cases firms failed to do this, with some charging up to 10 times the actual bank charge for processing the transfer.

Other areas where we identified potential concerns included:

  • not processing paperwork efficiently – especially in relation to requisitions raised by HM Land Registry
  • not explaining the difference between freehold and leasehold ownership
  • failing to double-check that a client understands the long-term implications of contractual obligations and fees.

Conclusions

This review clearly found that in the majority of cases, conveyancing firms actively engage with their clients and fulfil their obligations to them. Property deals progress in a timely and efficient manner and clients feel informed and supported throughout.

But sadly, this is not always the case.

Whether its providing unrealistic or incomplete quotes, or failing to make sure contractual information has been fully understood, solicitors are potentially leaving their clients exposed to significant risk or potential financial hardship.

Next steps

This thematic review took place during 2018. In December the same year, we introduced new transparency rules which require firms offering conveyancing services to publish detailed price and services information, and their complaints procedures online.

The requirement to provide clear pricing information was not new. However, these rules, and associated guidance, now provide the profession with absolute clarity on our expectations for how they should be publishing price information.

These requirements include:

  • outlining all known and potential costs a transaction may attract from the outset
  • specifying all charges being added to the actual cost of any third-party disbursements.

As part of our ongoing work, we will continue to review compliance with these rules and will consider further action where necessary to make sure they are being followed.

On the specific subject of making sure solicitors explain contractual details to clients, especially in relation to leaseholds, we urge all firms to make sure that their clients understand their obligations. If we find evidence that people were not made aware of onerous clauses in their leasehold contracts, such as the regular doubling of ground rents, we will take robust action.

Following this review, we referred six firms onto our internal disciplinary processes. Five of these referrals included concerns about failing to declare that the stated telegraphic transfers fees included an additional charge/mark-up.

Read the full report here