Regulators Will Support Firms Rather Than Sanction Non-Compliance

As December 6th rushed by, many have speculated as to how the legal sector would enforce regulatory change. Would the Machiavellian amongst us create a compliance witch-hunt by snooping around competitors’ websites for snippets of non-compliance? Or, would the regulators heavily sanction firms from midnight on the sixth?

Instead, the regulators have adopted a sensible, supportive strategy to guide firms into compliance.

Following the Solicitors Regulation Authority’s (SRA) Price and Service Transparency Workshop, the SRA made it clear that there will be an unavoidable adjustment period as firms begin to implement changes to their websites in order to become compliant.

The sentiment offered to firms was supportive and understanding that the road to complete service and price transparency is a journey, with a collaborative approach being adopted in the first instance.

Similarly, the CLC have insisted their ‘prevention is better than cure’ approach of working collaboratively reflects the SRA’s methods.

The Council for Licensed Conveyancers have also implemented a Regulatory Supervision Manager (RSM) who are aware of the regional firms that they will oversee. The RSM will help create a more robust monitoring and inspection regime, with the additional responsibility of guiding their firms into compliance.

The Council for Licensed Conveyancers responded by saying: “We will be treating the new requirements we are bringing in on 6 December in the same way we do any other part of our Code and they will form part of our ongoing monitoring and inspection regime. One of the benefits of CLC regulation is that each practice has a designated Regulatory Supervision Manager (RSM) who know the firms they oversee. The RSMs have been liaising with their firms, responding to queries and providing advice as they do regularly with questions and queries on regulatory issues.

“While the rules set out what firms have to do, we know all CLC licensed firms are different, so they will be free to comply with the rules in the way that best suits their business and their clients. The guidance provides firms with flexibility in how they implement the requirements and we do not believe practices should have a problem in complying.

“Our approach is that if we find CLC Practices that are non-compliant, we will assist them to come into compliance. If the practice does not cooperate or act within an agreed timescale, we will take action based on the individual circumstances.

“We proceed on the basis that prevention is better than cure and we use a wide range of approaches and tools to support regulated entities, ensure compliance and take corrective or disciplinary action where it is necessary. This give us a range of regulatory responses that are proportionate to the risk to clients in any particular case.

“While we cannot yet say what the most persistent problems may be, we know from the questions we have received at the roadshows we have been running the general areas where firms have been asking for additional guidance. These have included what is expected if a firm doesn’t have a website (publish in alterative formats), comparability across different regulators (where we have been working with the SRA and CILEx Regulation to ensure there is a level playing field) and whether firms have to use a cost estimate generator to be compliant (no) – we have published more on this as a set of FAQs on our website.

“Throughout 2019 we will be monitoring and evaluating how well the new rules are working and the impact they may be having on consumer behaviour. We have made it clear to the practices we license that we may yet need to come back with further rules or amended guidance if we find that the requirements we have introduced are not providing consumers with the ability to make the Informed Choice they should expect.”

In the short-term, at least, the regulators remain firm with guiding firms into compliance rather than sanctioning them for non-compliance that may be out of their control. As long as a firm is able to demonstrate that definitive steps are being taken to comply, the regulators are clear that they will offer their help wherever they can.

How has your firm adapted to price transparency? Do you feel supported by your regulator?

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