Liverpool Law Bulletin December 2013 December 2013 | Page 18

Regulation Regulation Update The latest regulation news from Michelle Garlick of Weightmans As the dark nights draw in, we reach the end of 2013 and take a moment to reflect on what a manic year it has been for the profession and a sobering end for those firms who were unable to find professional indemnity cover and who are having to wind down. I am sure I am not alone when I say that I hope 2014 is more uplifting and that the legal profession will dust itself off and come back fighting. Don’t become too focused on compliance with LASPO Six months on from the implementation of the referral fee ban, the SRA issued a warning notice to personal injury firms based on its findings from supervising compliance with the new rules. The concern is that a number of firms are concentrating solely on compliance with the primary legislation and forgetting to ensure that their arrangements must also comply with the Code of Conduct and the SRA Principles. A worrying trend is for CMCs to charge claimants a proportion of their damages in return for being pointed in the direction of a suitable law firm. The law firm is then asked by the CMC to either make arrangements to deduct their fee from the damages or to forward the whole amount of damages over to the CMC for it to deal with. Such arrangements, as well as having the potential to fall foul of LASPO, carry the risk of breaching the Principles and Outcomes contained in the Code of Conduct such as the requirement to act in the best interests of the client, deal with conflicts appropriately and obtain the relevant client consents to any deductions. I echo the SRA’s concerns as we have come across a number of poorly thought out “back of fag packet” schemes that fail to consider the full range of issues. We have been able to steer these firms in the right direction but for those who have yet to fully consider the SRA’s warning, you need to do so sooner rather than later as the visits are now taking place and in a conference I attended recently, Richard Collins of the SRA commented that 2014 would be the year of enforcement for those firms breaching the ban. All for one and one for all Well maybe not exactly but 2014 will see us a step closer to finding out what the future holds for the regulation of the profession. By way of a reminder …back in the autumn the Law Society, in its response to the MoJ’s call for evidence on the regulation of Legal Services in England and Wales, set out its vision for the future and made it clear that it saw no benefit to be gained from creating a single independent regulator to oversee the professions. It argues that the expense of creating such a beast is prohibitive along with the practical and financial consequences for firms that will result from the inevitable creation of yet another set of regulatory changes for them to absorb. Whilst the Law Society may have made some valid points about the pace of change witnessed by legal professionals over the past 10 years its submissions were slammed by the wider community and in particular the SRA. The SRA, whilst not calling for a single regulator, calls for one that stands out as truly independent from both the profession and parliament and holds back no punches when it comes to describing the current model with its eight approved regulators as outdated and fragmented. What is clear is that over the next 12 months we all need to watch the regulatory landscape very carefully. The Clementi report and subsequent passing of the Legal Services Act 2007 have started a catalyst that will change the profession forever and it is only those firms quick enough to keep pace that will survive to represent the profession in the next decade. The consultation remains open and if you have any views on how you want to be regulated, now is the time to speak up. Data Deadline Looms How are you getting on with collecting the requisite diversity data from your workforce? Remember the deadline for submitting your firm’s diversity data to the SRA is 31st January 2014, which may sound a long way off but once the dust from th R