Thursday, January 31, 2013

As if COLPS did not have enough to worry about ...

…professors David Kershaw of LSE and Richard Moorhead of UCL have argued that transactional lawyers should be held accountable if their advice is used by clients for unlawful acts and strict conduct rules are necessary to police this rather than outcomes-focused regulation.

Legal Futures reported today that the well respected academics urged that lawyers should bear responsibility where a “real, substantial and foreseeable risk” of unlawful – or even probably unlawful – action exists, even when such advice is accurate and competently provided. Any such change would necessitate amendments to the SRA Handbook. By way of example law firms who gave advice on Stamp Duty Mitigation Schemes would be caught.

Kershaw and Moorhead concluded: “More specific rules and guidance on a lawyer’s consequential responsibility would clarify the limits of proactive lawyering. Whilst in the absence of effective enforcement by the SRA such rules would be as ineffective as the current broad principles, they would provide a clearer benchmark according to which lawyers can internalise what is expected of them and around which the SRA can build an enforcement policy that provides some counterweight to the economics of zeal”.

COLP Advice - Undertakings Guidance

The SRA does not posses the power to direct the specific performance of an undertaking or to direct the payment of compensation to a third party. Nevertheless a breach of an undertaking will more than likely lead to disciplinary proceedings.

The SRA will treat a promise to give an undertaking as an undertaking provided the promise
sufficiently identifies the terms of the undertaking and provided any prior conditions have been
satisfied.

Your lawyers are not obliged to adopt the approach below and following tips are provided only as good practice indicators :

  • To ensure that an undertaking is given only by a member of staff with authority expressly given on a Durable Medium by the firm.
  • In the area of conveyancing be sure that all staff are aware of the terms of undertakings incorporated by the use of the Law Society’s formulae for exchanging contracts by telephone and its code for completion by post.
  • To note on the file and confirm in writing to the other party any agreed variation to undertakings
  • To note separately the terms of undertakings on file.
  • To ensure that undertakings are only if the authorised member of staff can be absolutely certain that it will be fulfilled.
  • Where making or accepting an undertaking “to pay costs” specify the amount of costs since if no sum is agreed the undertaking may be interpreted as meaning “to pay reasonable costs”.
  • To ensure the wording of an undertaking is unambiguous, since only in exceptional circumstances will extraneous evidence be admitted to clarify an ambiguity;
  • Where an undertaking is dependent on the happening of a future event to notify the recipient immediately if it becomes clear that the event will not occur.
  • To be as specific as possible. For example where you are acting on a conveyancing sale to identity the lender and the date of each charge it is intended to discharge in reply to any requisitions on title or otherwise.
  • Only give an oral undertaking as a last resort and ensure that it is confirmed in writing as soon as is practicable.
  • Avoid giving or accepting an undertaking using terms such as “best endeavours” or “reasonable endeavours”: be as specific as possible .

Wednesday, January 30, 2013

CML hosts 'jose mourinhos' for guidance at COLP and COFA seminars

With a view to assisting the ‘special ones’, namely COLPs, Conveycentric are arranging two free CPD seminars on the 25th February at the Council of Mortgage Lenders. The seminar is aimed at examining in detail the duties and responsibilities of the COLP and COFA with a particular emphasis on the high risk area of conveyancing.

Topics to be covered include :
  • Monitoring risk: essential policies and procedures 
  • The SRA's thematic review: why the focus on conveyancing 
  • Improving your firm's risk profile 
  • Compliance breaches: how to apply the SRA guidance 
  • Reporting Obligations and technology: manual or automated processes 
  • Lender panels; what does the future hold? 
  • Lenders as clients: understanding and managing your obligations 
  • What do Lenders expect from panel firms?
The speakers are Tim Prior of PNCR and Chris Smyth an industry consultant who recently chaired last years CML Mortgage fraud and professional negligence recoveries seminar.

Tim is a contributing author to LexisPSL on risk and compliance issues and is a regular speaker at Law Society and CLT events. He is a member of the Law Society's Conveyancing Quality Scheme Assessment Panel and is risk consultant to the scheme.

Chris is an independent consultant to the Financial Services industry and the Legal Profession. Formerly he was Head of Legal Services at Cheltenham & Gloucester plc. He now a non -executive Director at Bath Investment and Building Society as well as member of the Law Society's Conveyancing Quality Scheme Assessment Panel

I understand that very few places are now available so if you are interested book soon by clicking here. Look out for the small print. Although the seminar is free you will be charged if you dont turn up.

COLP advice - Estimating Fees Vs Quoting Fees

It is imperative that when your firm set out the likely fees to be incurred on a legal matter it should made clear that it is an estimate rather than a quotation since a quotation will be treated as a fixed price contract which cannot be varied notwithstanding any provision in the Terms of Engagement to the contrary.

Upon sampling of 10 solicitors published conveyancing fees on the internet for SRA regulated firms 8 did not make it clear that the fees were estimated.

The SRA and LeO are likely to take a very dim view of a situation where your firm has given a quote (fixed fee) and the client has been charged even £10 more. Given that a complaint to the LeO is likely to result in an automatic £400 fee you can rest assured that any profit made on a case will be dented.  

Having a Living and Breathing Risk Register

The new compliance management systems such as ClientCareMonitor build an automated Risk Registers that remain “live” within your firm.

A risk register is not something that as a COLP you refer to once a quarter or annually – it should updated to reflect the current situation within your firm

Using the example of Data Protection. Data Protection is likely to be category in your Risk Register identified as a low risk. If you however a member of staff admits that they left a client’s file on the train – this would be something that you act on immediately and your Risk Register should then be updated to reflect the increased risk. Your systems should record the circumstances, the outcome of the investigation, whether there is a material or non material breach how the risk will be mitigated in future – e.g. prohibiting file removal. Only once you have conducted further reviews and recorded them on your systems will the risk them be lowered in your Risk Register. 

Tuesday, January 29, 2013

COLP Seminars – Demystifying OFR

The lack of clarity of the new SRA regime presents a great opportunity for consultancies to run seminars to try an demystify OFR.

COLPs are to be appointed in the next few months and should be attending seminars to determine what their obligations are and what exposure they face.

It will be the COLP who will be responsible for ensuring that the firm has systems and controls in place to enable the firm, as well as its managers and employees, to comply with the requirements on them.

To be authorised, firms have to have suitable arrangements for compliance and some guidance is given as to what a “compliance plan”/risk register should cover although it will very much depend on the nature and size of firm, its work and its areas of risk. The COLP will need to be involved in the creation (if it doesn’t exist already) and monitoring/review of this on an on-going basis.

When choosing a COLP seminar you should be looking for a course  which will provide practical support as you set up the Compliance Officer for Legal Practice role in your firm, covering:


  • What the COLP will need to do and when.
  • What breaches should the COLP report?
  • Getting buy-in from partners/staff.
  • Indemnifying and protecting the COLP.
  • The implications of getting it wrong.


A list of COLP courses are listed to right of this page.