Regulators “must guard against misuse of lawtech”

Artificial intelligence-backed lawtech has the potential to improve access to justice but also carries a danger that automating law will be used negatively, meaning regulators will have to step in, a global innovation charity has warned.

Nesta, which is working with the Solicitors Regulation Authority (SRA) to identify and support transformative AI legal technology, backed by a £700,000 government grant, said the lesson of technology developments elsewhere was that such innovations had a “dark side”.

For instance, the advent of cheap or free and anonymous internet communications had also brought with it a “toxic social media culture of abuse”.

The authors, Olivier Usher and Chris Gorst, both senior members of Nesta’s challenge prize centre, which oversees rewards for innovation, wrote in a blog : “When speech is free, all speech flourishes, including hate speech.”

From a lawtech point of view, they wrote, it could both enable access to justice but also create a “less palatable future”.

They said it could involve “the silencing of #MeToo activists with an avalanche of libel lawsuits; honest tradesmen ripped off by an automatic lawsuit over every invoice; online bullies spinning up endless court cases against their enemies in order to intimidate them into submission; patent trolls automating their hunt for genuinely innovative companies to exploit”.

However, speaking to Legal Futures, the authors said they were hopeful that the practice of law, as a highly regulated profession, might escape the arrival of negative elements, if regulators were vigilant and willing to be proactive if necessary.

Mr Usher said the risk of lawtech being used for ill would only come about if “the regulators completely wash their hands” of acting to stop it.

He highlighted the importance of ‘safe spaces’ for innovation to be tested, such as the Financial Conduct Authority’s (FCA) regulatory sandbox.

Earlier this year the SRA announced it would simplify its system for granting waivers to regulations in order to promote innovation, and formalise its ‘innovation space’ initiative, which is comparable to the FCA’s sandbox.

The space includes a guarantee that the SRA will take no enforcement action if innovations bring a firm into technical breach of its rules.

Mr Gorst said it was already possible to launch cases to harass people and regulators had it in mind when setting conduct rules. “I wonder how new a problem this would be by virtue of the fact it could be somewhat more automated?” he asked.

He continued: “The really exciting opportunity is… technology can help people navigate their way through the system, help them avoid needing recourse to law where it’s not really necessary, help them with a guided pathway through the system… [and help] them to represent themselves in legal situations where the cost of a lawyer might be prohibitive.

“We think the space of opportunity seems really large, but we should also be mindful of the risks, and regulators need to be mindful of the risks as well.”

It is understood the SRA is in the process of tendering for its AI project.

*This article first appeared on Legal Futures.

Asia Pacific lawyers could benefit from no-deal Brexit

If the UK exits the EU without a deal, there would be an end to the current preferential treatment of EU lawyers wishing to practise in England & Wales.

The Solicitors Regulation Authority says that the UK Government has made clear that this would be the case if the UK moves to WTO rules, ending the current legislation which exempts EU lawyers from having to sit the QLTS exam for qualification.

But the SRA is now consulting on a change that would benefit lawyers from outside the EU, by allowing lawyers worldwide to apply for exemption from the QLTS. Exemptions would continue to be granted on a case-by-case basis.

“Whatever the outcome of the negotiations it is important that we are prepared to make sure the transition to any new arrangements takes place seamlessly, with as little disruption as possible to the profession or public. Addressing how non-UK solicitors will qualify in England and Wales in the event a no-deal Brexit is part of that,” said Paul Philip, SRA Chief Executive.

The proposals are only relevant in the event of a no-deal Brexit.

Dentons makes pledge to lawyer wellbeing initiative
Dentons has joined an initiative aimed at driving better mental health and wellbeing in the legal profession.

The global firm has signed up to a pledge designed to address the profession’s troubling rates of alcohol and other substance-use disorders, as well as mental health issues. It’s been created by a working group of the American Bar Association.

“We applaud the ABA for taking this important step to address the challenges of the profession,” said Mike McNamara, Dentons US CEO. “We all know a lawyer or professional who has battled either substance abuse or mental health issues. As legal employers we have an obligation to take concrete steps to improve support for those who are struggling and to foster a healthy work environment.”

Last year, Dentons began offering information and webinars to help lawyers with topics including work-life balance and managing holiday stress; and the firm is currently running a pilot program offering an onsite wellness coach to help address professional or personal issues.

RPC eyes Asia Pacific growth with new HK office
International firm RPC is moving its Hong Kong office to larger premises as it looks to future growth in the region.

The move to one of the city’s most impressive new business hubs – Taikoo Place – gives the firm 50% more space than its current Hong Kong location.

“We have taken a space that will support our plans for further expansion and development in Hong Kong in the coming years. We are excited to be a part of this new development and to be at the heart of a rapidly developing business community. We see this move as integral to achieving our projected growth plans,” commented Antony Sassi, RPC Managing Partner Asia

This article first appeared on Australasian Lawyer. 

UK Government issues guidance note for a no-deal Brexit result

A scenario in which the UK leaves the EU without agreement (a ‘no deal’ scenario) remains unlikely given the mutual interests of the UK and the EU in securing a negotiated outcome.

Negotiations are progressing well and both we and the EU continue to work hard to seek a positive deal. However, it’s our duty as a responsible government to prepare for all eventualities, including ‘no deal’, until we can be certain of the outcome of those negotiations.

For two years, the government has been implementing a significant programme of work to ensure the UK will be ready from day 1 in all scenarios, including a potential ‘no deal’ outcome in March 2019.

It has always been the case that as we get nearer to March 2019, preparations for a no deal scenario would have to be accelerated. Such an acceleration does not reflect an increased likelihood of a ‘no deal’ outcome. Rather it is about ensuring our plans are in place in the unlikely scenario that they need to be relied upon.

This series of technical notices sets out information to allow businesses and citizens to understand what they would need to do in a ‘no deal’ scenario, so they can make informed plans and preparations.

This guidance is part of that series.

Also included is an overarching framing notice explaining the government’s overarching approach to preparing the UK for this outcome in order to minimise disruption and ensure a smooth and orderly exit in all scenarios.

We are working with the devolved administrations on technical notices and we will continue to do so as plans develop.

Full UK Government Guidance Note Here

Solicitors Regulation Authority (SRA) Response

Bar Standards Board (BSB) Response 

 

Governance Gone Wrong: Examining Self-Regulation of the Legal Profession

England and Australia have abandoned self-regulation of the legal profession yet Canadian law societies continue to function on this basis. This article argues that the self-regulatory model on which the Law Society of Ontario (the “LSO”) operates represents an inadequate form of governance in terms of the accountability it yields. When compared to other organizations, including law societies in other common law jurisdictions as well as corporations, the weaknesses in the LSO’s governance model are conspicuous. This article advocates replacing self-regulation in Ontario’s legal profession with a co-regulatory regime. In the absence of such an extensive reform, this article puts forward recommendations for changes to the current bencher model of governance on which the LSO is based including the implementation of bencher expertise requirements and a duty of loyalty and a duty of care to the public.

Paper Available Here

Anita Anand, University of Toronto – Faculty of Law

Solicitors Regulation Authority urges caution over new legal business partners in the UK

Solicitors have been urged to make sure that the credentials of people approaching their firm to offer business expansion are genuine.

We have received two recent reports of firms branching out into different work areas, but the reality was that new colleagues had infiltrated the firm to defraud clients. The incidents have led to potential losses of more than £7 million for those involved.

The fraudsters approached law firms offering to expand the services they offered and gave bogus credentials to support their supposed expertise. However, once appointed and away from supervision, they had access to client money which appears to have been stolen.

Small firms are targeted. This may be because the fraudsters think their apparent offers of assistance or new work will be more readily accepted and that principals in those firms may not have been able to keep up to speed with warnings such as this one.

Solicitors have a duty to run their businesses in accordance with “sound financial and risk management processes” to protect their clients’ money and assets. Reports of infiltration highlight the need for the profession to make sure that it carries out proper due diligence on those seeking to join a firm.

There is also an obligation for solicitors to provide a proper standard of service to their clients. Taking on new staff for areas where managers do not have the relevant expertise could mean they might not be properly supervising employees.

Paul Philip, SRA Chief Executive, said: “Many law firms handle large amounts of money, making them an attractive target for fraudsters.

“We know that most firms have strong systems in place to make sure they are employing the right people, as well as protections to make sure staff are properly supervised and money in the client account stays safe.

“But these recent cases show that there is no room for complacency and that undertaking careful due diligence for any potential employees is essential. Leaving the door open for fraud is damaging to both the firm and public trust in solicitors.”

Read Full Article Here

Solicitors Regulation Authority Assessment Organisation Appointed

The SRA has appointed Kaplan as the assessment organisation to develop and run the Solicitors Qualifying Examination (SQE).

Selected following a rigorous, year-long process, Kaplan provides education, training and assessment across professional services, including in law, financial services, accountancy and banking. It has direct experience of assessment within the legal sector in England and Wales as the provider of the Qualified Lawyers Transfer Scheme (QLTS). Kaplan will not provide training for the SQE.

The SRA and Kaplan will work with stakeholders from across the legal and education sectors to develop and test the SQE. Kaplan will then run the SQE on our behalf. They have been appointed for a period of eight years from the introduction of the SQE.

The SQE will provide a single common assessment for all aspiring solicitors. It will be introduced, at the earliest, in September 2020. The costs of the assessment will be determined once the final design is fixed, although we are aiming to provide guidance on indicative costs before then.

Full Press Release Here

Regulating Law Firms from the Inside: The Role of Compliance Officers for Legal Practice in England and Wales

Following the Legal Services Act 2007, which permitted the delivery of legal services through Alternative Business Structures (ABS), the Solicitors Regulation Authority required all regulated legal service firms to appoint Compliance Officers for Legal Practice (COLPs). COLPs are charged with taking reasonable steps to ensure that firms comply with their obligations, which entails interpreting what outcomes‐focused regulation (OFR) requires of the firm. Yet despite their importance, little is known about how compliance roles operate within legal service firms. We addressed this gap through a series of qualitative interviews that explored COLPs’ views of their roles, their attitudes to regulation, in particular to OFR, and to achieving compliance. We found that COLPs are a key regulatory mechanism in the context of firm‐based regulation and OFR and have a critical role to play in protecting and promoting professional values in both ABS and non‐ABS entities.

Full Paper Available Here

Sundeep Aulakh, University of Leeds – Work and Employment Relations & Joan Loughrey, University of Leeds

Bar Standards Board shares good practice for barristers and advice for clients on consumer feedback

The Bar Standards Board (BSB) has today published new guidance that aims to encourage barristers to follow good practice when they receive feedback from their clients. It has also published a guide for the public about using and leaving feedback about barristers’ services.

Along with the other legal regulators, the BSB was asked by the Competition and Markets Authority (CMA) to produce this guidance as one of the recommendations in its 2016 study into the legal services’ market.

The guidance for barristers, which was developed with input from barristers, practice managers and clerks, aims to share:

  • examples of good practice and practical advice to improve the systems that barristers and chambers already have in place;
  • some of the barriers barristers face when collecting feedback and how they can be overcome;
  • the sort of questions to ask when seeking feedback; and
  • how barristers and chambers can use the information they receive.

The guide for the public is for people who are:

  • looking for feedback to help them choose a barrister;
  • looking to instruct a barrister based on feedback they have received from someone or have seen somewhere else; or
  • wanting to give feedback on the service they have received from a barrister to help them improve their practice or to help others choose a barrister.

Read the full Guidance Report here

Bar Standards Board explains how it assures competence at the Bar

Following its decision last year not to implement the Quality Assurance Scheme for Advocates (QASA), the Bar Standards Board (BSB) has today published more detail about how it assures the competence of barristers.

The approach reflects the BSB’s move in the last few years to become a more risk- and evidence-based regulator that takes better targeted action to maintain standards of practice at the Bar. This means that more focused regulation can be introduced where concerns about professional competence have been identified – for example, the recently introduced competence and registration requirements in relation to Youth Court advocacy.

As well as specific targeted regulation, the BSB’s approach to assuring standards includes a range of additional measures that have already been implemented. These include:

  • the regulator’s Future Bar Training reforms that include a clearly defined set of knowledge, skills and attributes expected of all newly qualified barristers on their first day of practice, as specified in the Professional Statement for Barristers;
  • the introduction in 2017 of the new Continuing Professional Development (CPD) scheme for experienced barristers which, aligned with robust monitoring by the regulator, places greater responsibility on individual barristers to reflect upon their learning and development, set learning objectives and review them annually; and
  • existing regulatory controls stemming from a requirement in the BSB Handbook that barristers should not undertake work unless competent to do so.

The paper published today also explains how the BSB uses external indicators of the profession’s competence to inform its regulatory approach. These include existing measures of barristers’ competence such as the processes for reviewing the quality of barristers to join specialist panels like the Treasury Panel or for appointment as a QC.

Read more on this from the BSB

SRA consultation on protecting the users of legal services

The SRA has launched a consultation on “Protecting the users of legal services: balancing cost and access to legal services”. While most people are happy with the service they receive from solicitors and regulated law firms, things can and do go wrong. It is crucial that the public can trust that when things go wrong the right protection is in place. The principle that all regulated law firms should have a minimum level of indemnity insurance, with an additional safety net of the Compensation Fund, has served the sector well.

The analysis of 10 years of insurance claims against law firms suggests that the current approach is too rigid. The legal sector is increasingly diverse, with solicitors and firms practising in many different ways. Rules could mean some firms, particularly those working in low risks areas, are spending more on cover than is necessary. The evidence shows that this burden falls particularly heavily on small firms. Insurance rules can put new firms off entering the market – a market that the Competition and Markets Authority (CMA) has concluded needs to be more open and competitive to better serve the public.

The SRA’s proposals aim to tackle these problems by taking a pragmatic approach that gives firms more flexibility to choose the right level of insurance cover to fit their business and its customers. There would be an opportunity for firms, particularly smaller ones working in low risk areas, to reduce their insurance costs. The public could still have confidence in a minimum yet appropriate level of protection, while potentially benefiting from lower costs and more choice.

To learn more about the SRA’s proposals and contribute to the consultation process, visit the link below.

Read the Consultation Papers

Consultation response submission deadline: 15 June 2018.