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300 law firms still don’t have compliance officers


Barrass: finally moving into enforcement stage?

More than two months since law firms were meant to have their compliance officers in place, around 300 firms still do not have them, the Solicitors Regulation Authority (SRA) has revealed.

This is a mix of firms that have not had their nominations approved and those that have still not nominated at all.

Just under 97% of the approximately 9,900 firms expected to nominate compliance officers now have them in place.

In its last update six weeks ago [2] the SRA said it was moving into a new phase of enforcement with those yet to be approved. Last week, however, it said the same thing. “Work is now moving into the enforcement phase,” a statement said.

The SRA declined to put figures on the number of firms and individuals facing action, saying they are a “moving feast”, but we have calculated the number of firms yet to have their compliance officers based on previous information put out by the authority.

SRA executive director Samantha Barrass said: “The process was not as straightforward as we had hoped, and to have officers in place at such a high proportion of firms is welcome news.”

In a repeat of her comments six weeks ago, she said: “Our strategy to achieve compliance by engaging with firms to actively seek alternative nominations, encourage completion of nominations and investigate issues that have been identified, did pay dividends. However, we must now switch our focus to proportionate enforcement action against those firms that have refused to nominate or otherwise failed to engage appropriately with the process.”

She said action will be taken against both firms and individuals, and will range from letters of advice, fines, rebukes, through to revocation of authorisation, and referral to the Solicitors Disciplinary Tribunal. “We are not going to shirk our responsibilities when it comes to enforcement. To do so would be unfair on the majority who have co-operated fully with us.”

Those facing enforcement fall largely into three categories: those firms that have not nominated at all or co-operated with the SRA; firms that nominated individuals with significant issues relevant to the suitability test; and those that nominated such individuals and whose issues were not declared.

A number of firms have had to re-nominate their compliance officers. Around 170 practices have had to do this because the original nominee was not suitable and was likely to be refused. Reasons for this included the original nominee leaving or going on long-term leave; the original nominee withdrawing their consent to fulfil the role, or reorganisation within a firm’s management structure.