The Solicitors Regulation Authority (SRA) has received “too many” compliance officer nominations where the individuals concerned have failed to disclose serious disciplinary issues that make them unsuitable for the role, while warning that hundreds of firms will start 2013 without their COLPs and COFAs in place
Speaking in London yesterday, SRA executive director Samantha Barrass cited one case where the nominated individual failed to disclose 22 matters against them, while in another, a solicitor did not mention two separate Solicitors Disciplinary Tribunal appearances, for which he was fined, and a separate reprimand for failing to disclose ongoing disciplinary proceedings to a Law Society panel.
Ms Barrass said these failures “could potentially have damaging consequences for the entire profession… it is simply not acceptable for individuals to deny the presence of a disciplinary history or other relevant suitability issues when explicitly asked to do so by the SRA”.
She said: “The success of outcomes-focused regulation is reliant on us being able to trust firms to deliver competent and ethical legal services. COLPs [compliance officers for legal practice] and COFAs [compliance officers for finance and administration] are being appointed to act as ‘guardians’ for managing risks to their business. It is essential that those appointed to fulfil these roles are trustworthy and competent to do this.
“How can we have confidence where there is a failure to co-operate with us in the nomination process and explicit non-disclosure of serious suitability issues?”
Ms Barrass in fact expressed surprise that as many as 90% of firms met the 31 July nomination deadline – “given the historic experience we have had, where firms have sometimes been slow in fulfilling their regulatory obligations, we had feared this initial figure might be a lot lower” – but predicted that “several hundred law firms”, mainly of four or fewer partners, would start 2013 without compliance officers in place.
She said: “Not having one in place by 1 January will mean we will begin the process of revoking authorisation. The only exceptions will be those cases where constructive engagement is under way with the firm concerned such that we are confident we will be able to approve a COLP and/or COFA in short order. Moreover, nor will we ignore the non-compliance that became evident through the nomination process.”
However, she said the priority until the end of the year is to get as many compliance officers as possible in place. “We have a large team of staff dedicated to supporting this process. We are calling firms who have not nominated, and asking firms likely to have their nominations declined, to put forward an alternative individual.”
Ms Barrass said these problems have also meant it has taken the SRA longer than expected to approve nominations. “If we haven’t yet contacted you and your nomination was submitted before 31 July, you can safely take the view that ‘no news is good news’. You will certainly receive your approval before 31 December.”