Responsibilities of COLPs and COFAs

Last updated 10 September 2014

Responsibilities

COLPs are required to take all reasonable steps to

  • ensure the authorised body, its managers and employees comply with all terms and conditions of its authorisation (except any obligations imposed under the SRA Accounts Rules);
  • ensure the authorised body complies with relevant statutory obligations;
  • record any failure to comply with authorisation or statutory obligations and make such records available to the SRA;
  • report any material failure (either taken on its own or as part of a pattern of failures) to the SRA as soon as reasonably practical. Licensed bodies (ABS firms) must, in accordance with the Legal Services Act 2007, also report non-material breaches.

COFAs are required to take all reasonable steps to

  • ensure that the authorised body, its employees and managers, comply with any obligations imposed under the SRA Accounts Rules;
  • keep a record of any failure to comply and make this record available to the SRA;
  • report any material failure (either taken on its own or as part of a pattern of failures) to the SRA as soon as reasonably practical. Licensed bodies (ABS firms) must, in accordance with the Legal Services Act 2007, also report non-material breaches.

All firms need to decide how the COLP and COFA operate within their business structure.

This involves making sure the systems needed to allow the firm to operate effectively to deliver the outcomes in the Handbook are in place. In larger firms, or where the COLP and COFA are employees, as well as the right governance, the compliance officers must have clear reporting lines that empower them sufficiently to fulfil their roles. This is to ensure that the COLP and COFA are able to implement changes or introduce new procedures to ensure compliance and good risk-management.

Irrespective of the size of the firm, it is up to the management of the firm to review the effectiveness of its COLP or COFA. If the COLP and the COFA is also the recognised sole practitioner, it is for the principal to review how well he or she is undertaking the roles.

More information on the requirement to comply, and responsibility and accountability for compliance

Recording and reporting

Recording all breaches is a critical aspect of the role of compliance officers. Not only is the recording of breaches an obligation on your COLP and COFA, but these records are a key tool for you in understanding the risks in your business: They should help you to identify where things have gone wrong and whether there are any systemic problems inherent to your firm's processes. We do not prescribe a method of recording breaches, and when implementing recording procedures, you should consider how best to do this in light of the fact they should be a tool in your firm's risk management strategy.

All material breaches should be reported to the SRA. It is up to the firm's COLP or COFA to decide whether or not a breach is material.

The requirement to provide an information report on an annual or other basis is set out in Rule 8.7 of the Authorisation Rules (for firms) and Rule 4.13 of the SRA Practising Regulations (for Recognised Sole Practitioners) and is at present linked to the renewals by firms of the practising certificates or registrations for relevant individuals in their practices. Firms and relevant individuals must also update the SRA by giving details of general changes that occur in respect of the firm.

Reporting and information requirements that apply to individuals or firms include the following.

SRA requirements

Statutory requirements

It is up to the firm's COLP or COFA to decide whether or not a breach is material and therefore needs to be reported to us in accordance with Rule 8.5 of the Authorisation Rules and Rule 4.8 of the SRA Practising Regulations.

The Guidance Notes to both sets of rules provide advice on this matter. In considering whether a failure is material, the COLP or COFA, as appropriate, needs to take account of various factors, such as

  • 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.

More information on the requirement to comply, and responsibility and accountability for compliance

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