The Legal Services Board (LSB) has granted the Solicitors Regulation Authority’s (SRA) application in full to change a number of the regulatory arrangements in the Standards and Regulations that are set to come into force on November 25th 2019.
Yesterday morning (21st May 2019), the LSB published a decision note detailing the possible changes to the new rules concerning the expectations of a COLP or COFA when disclosing a serious breach.
The changes have attempted to widen the scope on when a breach would need reporting to the SRA, allowing a relevant person the ability to report a breach a lot sooner than in the current set of standards.
The briefing note suggests that COLPs and COFAs are to combine a ‘subjective element’ which utilises the person’s understanding of the breach that has taken place, with an ‘objective element’ confirming the belief with a level of evidence. The SRA believe that by encouraging the relevant people to use their professional judgement, it could speed up reporting and lead to fewer serious breaches from taking place.
Whereas previously, the SRA standards required COLPs or COFAs inform the SRA of any ‘facts or matters that you now reasonably believe are capable of amounting to a serious breach, and ensuring that the SRA is informed of any facts or matters that you reasonably believe should be brought to its attention’, they can report on areas ‘they believe capable of amounting to a serious breach,’ suggesting that a COLP should intervene a lot sooner under the new standards.
The SRA have also included the ‘prohibition of detrimental treatment’ of any person that makes a claim or report to the SRA concerning a serious breach in order to fully protect the reportees from any detrimental treatment after a report has been made against a firm.
The SRA amendment of Rule 7 of the SRA Code of Conduct for Solicitors, RELs and RFLs (“Solicitors’ Code of Conduct”) and Rule 3 of the SRA Code of Conduct for Firms (“Firms’ Code of Conduct”) to:
- require authorised persons to report promptly to the SRA or another approved regulator any facts or matters they reasonably believe are capable of amounting to a serious breach of regulatory arrangements by any regulated person
- require authorised persons to inform the SRA promptly of any facts or matters that they reasonably believe should be brought to the SRA’s attention in order for it to investigate whether a serious breach has occurred, or otherwise exercise its regulatory powers
- prohibit the detrimental treatment of any person making or proposing to report or inform the SRA of their reasonable belief of a serious breach, irrespective of whether or not the SRA or another approved regulator subsequently takes action
- require individuals to, at the SRA’s request, investigate whether there have been any serious breaches that should be reported to the SRA
- the SRA receives reports of facts or matters which could comprise a serious breach, rather than allegations identifying specific and conclusively determined breaches
- the obligation applies the same threshold as that which the SRA applies when deciding to open an investigation (that the concerns, if proven, are capable of amounting to a serious breach)
- the test combines a subjective element (what the person making a report believes) with an objective element (the belief was reasonable bearing in mind the circumstances, information and evidence available to the decision-maker). This serves to avoid the reporting of mere allegations or suspicions and provides a balance on the spectrum between this on the one hand, and fully investigated findings on the other. The SRA believes that this also provides support for appropriate reflection, investigation and professional judgement
Will these changes lead to a reduction in breaches becoming serious if the COLP or COFA is able to report before clear evidence of a breach has been created?
