Continuing our series of blogs looking at some of the many queries received from our clients through our Ask Teal service, this blog considers the Solicitor’s Regulatory Authority (SRA)’s likely approach during this period.
Question: Will the SRA be more lenient with us if we are non-compliant during this period?
As at the date of our recent Ask Teal Webinar (19 March), the SRA had not yet issued any information or guidance regarding Coronavirus. It was Teal’s view at that time that the SRA would expect firms to remain fully compliant with applicable rules and regulations but that if, for example, problems in client service arose during the period, that provided you could show that you had complied with Government guidance on Coronavirus, it was likely that they would take this into account as a mitigating factor.
We also took the view that the SRA would still require firms to demonstrate that they had a full complement of Compliance Officers in place, that compliance was still being properly managed and monitored wherever possible, that policies and procedures have been reviewed and updated as needed and you had clearly given thought to the possible risks and keep a Risk Register.
We considered that the SRA would expect businesses to have identified all the likely risks to their business as a result of Coronavirus, their priorities, how they intended to deal with these and any proposals to mitigate risks arising.
We recommended that firms document all of the steps put in place to achieve compliance in the circumstances, so they could produce this at a later date if needed.
Subsequent to our Webinar, the SRA has now issued guidance which it is updating as and when issues arise (https://www.sra.org.uk/sra/news/coronavirus-update/).
Looking at the guidance, it is in line with our thoughts and also usefully addresses common concerns raised by firms such as not being able to bank cheques promptly in accordance with the Code of Conduct and missing the Accountant’s report deadline and risking any qualified reports being submitted late. The SRA has acknowledged that law firms and solicitors are facing uncertainty and difficult business conditions and stated that it will be looking at what they can do to help, while continuing to make sure the public are protected.
They expect firms to have appropriate contingency plans in place for disruption, whilst recognising that these are exceptional circumstances and that the coming months could present very challenging issues. They have stated that if they do receive complaints, they will take into account mitigating circumstances.
A key message to take from this therefore is the importance of documenting the steps you take during this period and the reasons why.