COLP Role Widening Under New SRA Regulations
On November 25th any law firm registered with the Solicitors Regulation Authority (SRA) will need to ready themselves for significant regulatory changes.
In particular, the role of a Compliance Officer for Legal Practice (COLP) seems to have widened considerably, broadening the scope of duties expected of the person appointed to the role.
Whilst the COLP under the current regulations is expected to regulate general compliance within their law firm, the updated standards place greater emphasis on the COLP safeguarding a law firm against human error caused by employees.
In a bid to streamline the document which has been viewed as exhaustive and overly prescriptive, the SRA have omitted the General Compliance Requirements from the new set of Authorised Regulations.
The regulations provided a clear understanding of the COLP’s responsibilities including creating systems for monitoring, reviewing and managing risks; file reviews; systems for ensuring all basic regulatory deadlines are met; appropriate checks on new staff or contractors and appropriate systems for training staff.
Some of this guidance will disappear in the new standards. However, it has been argued that this guidance has been issued by the SRA in the current iteration of the standards and should not be immediately discarded.
Whilst this advice is still relevant, it is hoped that their omission will create more freedom for firms to develop bespoke risk management systems, individually suited to each firm. However, there is a fear that this could lead to a lack of consistency which could become a compliance factor in itself.
For the COLP specifically, the role has widened. In the current standards a COLP is responsible for statutory obligations, records and reporting and general compliance in terms of authorisation.
Where the COLP’s role is briefly summarised in the current handbook, the responsibilities have been broken down in the new rules with some previous elements taken out completely.
Under the new rules a COLP now needs to ensure compliance with regulatory arrangements, omitting the need to consider statutory obligations.
A new strand concerns a greater emphasis being placed on ensuring staff compliance by safeguarding employees from causing or substantially contributing to a breach of the SRA’s regulatory arrangements.
The COLP has to take reasonable steps to ensure this is being done consistently and holistically throughout the law firm. A COLP may need to consider the risk management of the firm, the training of the staff and the staff awareness as to what their obligations are and how they are being prevented from taking dangerous steps if they wanted to.
Furthermore, whereas in the past the SRA stated that a report was needed for a material breach, the new standards refer to a serious breach and the reports also need to be completed ‘promptly’.
Is your law firm prepared for the changes taking place in November? How will they impact on the conveyancing sector?