The SRA Handbook and Code have been in force since 6 October 2011 and COLPs and COFAs took up their roles formally from 1 January 2013. Incredible to think it has been more than 6 months.
The role of the COLP and COFA doesn’t need to be complicated. We will be focussing on the COLP role in this article and will break it down in detail.
In summary the COLP is responsible to ensure that systems and controls are in place to enable the firm, as well as its managers and employees and anyone who owns any interest in the firm to comply with their obligations. These obligations include:
– any terms and conditions under which the firm is authorised by the Solicitors Regulation Authority (“SRA”) to provide legal services.
– the prevailing SRA Handbook, apart from the SRA Accounts Rules 2011 (“the Accounts Rules”).
– any other relevant legislation, regulations and rules that apply to the firm, its managers, interest holders or employees.
The COLP must take all reasonable steps to ensure compliance with the terms and conditions of their practice’s authorisation. They must take all reasonable steps to ensure compliance with any statutory obligations for example, the duties imposed by the Legal Services Act 2007, the Solicitors Act 1974 and the Administration of Justice Act 1985.
The COLP must take all reasonable steps to record all failures to comply. Also to report any such failures to comply to the SRA as soon as reasonably practicable, although in the case of non-material breaches, the practice will still be deemed compliant if they are reported as part of the Information Report required under Rule 8.7 of the Authorisation Rules.
To understand the role of the COLP you can look at it as a job description and these are some of the elements that would be included:
– Devise and implement an internal Compliance failure reporting process, to include anonymous reporting of compliance failures.
– Maintain a central register of all compliance failures in a form that allows the COLP and the firm to:
o monitor overall compliance with obligations.
o assess the effectiveness of the firm’s systems.
– Identify at an early stage compliance failures that are material either in their own right or because they form a pattern, taking into account:
o the detriment, or risk of detriment, to clients.
o the extent of any risk of loss of confidence in the firm or in the provision of legal services.
o the scale of the issue.
o the overall impact on the firm, its clients and third parties
o any other relevant factors
– Ensure the firm’s Compliance failure register is made available to the SRA on request.
– Review the Compliance failure register to establish whether any action is required:
o on existing compliance failures.
o to prevent or minimise the risk of further compliance failures.
– Report all compliance failures that are material (either individually or as part of a pattern) as soon as reasonably practicable.
– Report non-material compliance failures to the SRA on an annual basis or such other period as specified by the SRA in the prescribed form and by the date prescribed by the SRA.
– Prepare and maintain a Compliance Plan.
– Maintain a calendar or task list of routine, recurring compliance activities with suitable reminders to ensure key compliance dates are met.
– Establish proper policies and processes in all areas of compliance.
– Keep abreast of any regulatory or other compliance changes that may affect the firm and, as necessary:
– Amend existing compliance policies and processes.
– Devise and implement new compliance policies and processes.
– Ensure employees are trained on:
o any relevant compliance arrangements and policies.
o their duty to internally report compliance failures to the COLP.
– Liaise, as required, with the other partners/COFA to ensure appropriate sharing of information and consistency of approach.
– Provide a compliance report to include:
o the status of the firm’s compliance arrangements.
o a summary of internal and external compliance failures reported over the period.
o any recommended compliance activities (eg to amend a particular policy in response to a regulatory change).
COLPs should consider how they are going to implement the changes across the firm and make everyone aware of the requirements and also the changes and updates as they occur.
New systems and processes will only add value if everyone within the firm is aware of them. New processes are usually incorporated into the Office Manual and this can be helpful for new-starters and temporary employees. However, written processes will only add value if everyone follows them. It is important to ensure new employees are made aware of the processes and follow them. This information should be part of the Induction procedures. If changes are made to current policies/procedures you should provide training.
COLPs should also consider involving employees in designing any new systems or processes to ensure that they are practical and functional.
The latest version of any electronic documents must be clearly noted and old versions deleted.
Compliance is an ever changing environment and there is a lot of work involved to get everyone trained on new procedures and to ensure all documents, processes and procedures are compliant but the work doesn’t stop there — compliance is an ongoing project that requires maintenance and time to ensure the COLPs stay on top of the requirements.
