You and your regulator

Version 19 of the Handbook was published on 1 October 2017. For more information, please click "History" above.

Chapter 10: You and your regulator

This chapter is about co-operation with your regulators and ombudsmen, primarily the SRA and the Legal Ombudsman.

The information which we request from you will help us understand any risks to clients, and the public interest more generally.

The outcomes in this chapter show how the Principles apply in the context of you and your regulator.

Outcomes

You must achieve these outcomes:

O(10.1)

you ensure that you comply with all the reporting and notification requirements in the Handbook that apply to you;

O(10.2)

you provide the SRA with information to enable the SRA to decide upon any application you make, such as for a practising certificate, registration, recognition or a licence and whether any conditions should apply;

O(10.3)

you notify the SRA promptly of any material changes to relevant information about you including serious financial difficulty, action taken against you by another regulator and serious failure to comply with or achieve the Principles, rules, outcomes and other requirements of the Handbook;

O(10.4)

you report to the SRA promptly, serious misconduct by any person or firm authorised by the SRA, or any employee, manager or owner of any such firm (taking into account, where necessary, your duty of confidentiality to your client);

O(10.5)

you ensure that the SRA is in a position to assess whether any persons requiring prior approval are fit and proper at the point of approval and remain so;

O(10.6)

you co-operate fully with the SRA and the Legal Ombudsman at all times including in relation to any investigation about a claim for redress against you;

O(10.7)

you do not attempt to prevent anyone from providing information to the SRA or the Legal Ombudsman;

O(10.8)

you comply promptly with any written notice from the SRA;

O(10.9)

pursuant to a notice under Outcome 10.8, you:

(a)

produce for inspection by the SRA documents held by you, or held under your control;

(b)

provide all information and explanations requested; and

(c)

comply with all requests from the SRA as to the form in which you produce any documents you hold electronically, and for photocopies of any documents to take away;

in connection with your practice or in connection with any trust of which you are, or formerly were, a trustee;

O(10.10)

you provide any necessary permissions for information to be given, so as to enable the SRA to:

(a)

prepare a report on any documents produced; and

(b)

seek verification from clients, staff and the banks, building societies or other financial institutions used by you;

O(10.11)

when required by the SRA in relation to a matter specified by the SRA, you:

(a)

act promptly to investigate whether any person may have a claim for redress against you;

(b)

provide the SRA with a report on the outcome of such an investigation, identifying persons who may have such a claim;

(c)

notify persons that they may have a right of redress against you, providing them with information as to the nature of the possible claim, about the firm's complaints procedure and about the Legal Ombudsman; and

(d)

ensure, where you have identified a person who may have a claim for redress, that the matter is dealt with under the firm's complaints procedure as if that person had made a complaint;

O(10.12)

you do not attempt to abrogate to any third party your regulatory responsibilities in the Handbook, including the role of Compliance Officer for Legal Practice (COLP) or Compliance Officer for Finance and Administration (COFA);

O(10.13)

once you are aware that your firm will cease to practise, you effect the orderly and transparent wind-down of activities, including informing the SRA before the firm closes.

Indicative behaviours

Acting in the following way(s) may tend to show that you have achieved these outcomes and therefore complied with the Principles:

IB(10.1)

actively monitoring your achievement of the outcomes in order to improve standards and identify non-achievement of the outcomes;

IB(10.2)

actively monitoring your financial stability and viability in order to identify and mitigate any risks to the public;

IB(10.3)

notifying the SRA promptly of any indicators of serious financial difficulty, such as inability to pay your professional indemnity insurance premium, or rent or salaries, or breach of bank covenants;

IB(10.4)

notifying the SRA promptly when you become aware that your business may not be financially viable to continue trading as a going concern, for example because of difficult trading conditions, poor cash flow, increasing overheads, loss of managers or employees and/or loss of sources of revenue;

IB(10.5)

notifying the SRA of any serious issues identified as a result of monitoring referred to in IB10.1 and IB10.2 above, and producing a plan for remedying issues that have been identified;

IB(10.6)

responding appropriately to any serious issues identified concerning competence and fitness and propriety of your employees, managers and owners;

IB(10.7)

reporting disciplinary action taken against you by another regulator;

IB(10.8)

informing the SRA promptly when you become aware of a significant change to your firm, for example:

(a)

key personnel, such as a manager, COLP or COFA, joining or leaving the firm;

(b)

a merger with, or an acquisition by or of, another firm;

IB(10.9)

having appropriate arrangements for the orderly transfer of clients' property to another authorised body if your firm closes;

IB(10.10)

having a "whistle-blowing" policy.

Acting in the following way(s) may tend to show that you have not achieved these outcomes and therefore not complied with the Principles:

IB(10.11)

entering into an agreement which would attempt to preclude the SRA or the Legal Ombudsman from investigating any actual or potential complaint or allegation of professional misconduct;

IB(10.12)

unless you can properly allege malice, issuing defamation proceedings in respect of a complaint to the SRA.

In-house practice

The outcomes in this chapter apply to your in-house practice.

Notes

(i)

A notice under this chapter is deemed to be duly served:

(a)

on the date on which it is delivered to or left at your last notified practising address;

(b)

on the date on which it is sent electronically to your e-mail or fax address; or

(c)

seven days after it has been sent by post or document exchange to your last notified practising address.

(ii)

The outcomes in this chapter should be considered in conjunction with the following:

(a)

Chapter 7 (Management of your business) - requirements for risk management procedures; and

(b)

note (xv) to Rule 8 of the SRA Authorisation Rules.