Compliance Round Up May

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CRCS Legal MAY 2024 Newsletter

Complaint Resolution Compliance Solutions

Welcome to our May 2024 newsletter.

Update on SBB Law

The issues in this case are still going growing week by week.

The SSB Victims Support Group has expressed concern about the way the Solicitors Regulation Authority (SRA) is conducting its investigation into the collapsed Sheffield law firm.

It also questioned the independence of the Legal Services Board (LSB), which is investigating the SRA’s actions in the lead-up to SSB going into administration.

It is reported that ?following campaigners’ meeting with MPs, Debra Sofia Magdalene, administrator of the SSB Victims Support Group states,

“We want to see the SSB investigation report and an explanation for why no action had been taken. Many victims are angry that they didn’t pick up on SSB’s negligence.”

Ms Magdalene said she has spoken to one former SSB client who had suffered “a panic attack after receiving a sudden request from the SRA for a phone interview”.

She explained: “This random selection process of people who received adverse costs orders has caused significant distress, especially since the SRA warned she might need to appear in court or on Zoom.”

While others have heard nothing.

The Legal Services Board are using Carson McDowell, a non-SRA-regulated law firm based in Belfast, to support its review.

The LSB have now published the scope of its review. The LSB say the aim was to identify whether the SRA acted “effectively, adequately and efficiently”, whether it took all of the steps it could have taken and “whether the SRA’s acts or omissions in this matter necessitates changes in its procedure to mitigate the possibility of a similar situation arising again”.

Have you checked your ATE provides sufficient cover?? Have you complied with the terms of the policy?? Have you provided your client with appropriate advice?? It is worth considering whether the steps you have taken are adequate with a comprehensive file review.?

Post Office Scandal

The inquiry has made compelling and compulsive watching this week.

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The emails between Ms Vennells and Dame Moya Greene, Royal Mail's former boss, was one of the week's more shocking moments.

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The two exchanged messages after ITV aired its drama in January.

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"When it was clear the system was at fault, the [Post Office] should have raised a red flag, stopped all proceedings, given people back their money and then tried to compensate them for the ruin this caused in their lives," Dame Moya said in a text message.

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Ms Vennells agreed: "This has/is taking too long Moya. The toll on everyone affected is dreadful.”

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"I don’t know what to say. I think you knew," said Dame Moya.

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"No Moya, that isn’t the case," replied Ms Vennells.

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It was the question that Jason Beer KC ( Leading Counsel to the Inquiry) also wanted an answer to: "How could you not know?"

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"This is a situation that is so complex, it is a question I have asked myself as well," said Ms Vennells. "I have learned some things that I did not know as a result of the inquiry and I imagine that we will go through some of the detail of that. I wish I had known.”

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Did Paula Vennells know? – more from the inquiry this week.

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It is also the case that we are waiting to see what action the SRA will take once the inquiry is finalised.? We would expect to see some accountability for the lawyers who were involved and it will be interesting to see how the SRA handle this.?

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Do you make complaints to the Financial? Ombudsman’s Service (FOS) on behalf of your clients?

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Lawyers and claims management companies (CMCs) making volume complaints to the Financial Ombudsman Service (FOS) on behalf of clients will be charged ￡250 per case, it has proposed.

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Representatives will be refunded ￡175 should their complaint succeed, while the first three complaints brought each year will be free. The move follows a Treasury consultation last December.

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Despite “strong opposition” from lawyers and CMCs, the proposal was supported by others, FOS reported in a fresh consultation on how the new regime would work.

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It said that around 20% of the 400,000 cases referred to the service in the past two years were brought by lawyers and CMCs but only 22% were upheld, compared to a service-wide average of 32% – the opposite of what FOS said should be the case.

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At the moment, FOS only charges a fee of ￡650 per case – recently reduced from ￡750 – to respondents, irrespective of whether the complaint is upheld, which it said meant there was “little incentive” for lawyers and CMCs to sift cases properly.

Receptionist who couldn’t pronounce firm’s name loses employment case

A law firm receptionist brought a range of disability discrimination and harassment claims against her former firm where she was employed for just over a week.

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The claimant, identified as Miss J. Earle in the ruling was contracted to fill a temporary position for up to three months at the law firm Wykeham-Hurford Sheppard & Son.

Having started at the firm on the morning of 15 June 2022, her employment was terminated eight days later on 23 June 2022, on the basis that she “could not perform the role to the required standard”. Earle disagreed, arguing that her contract was terminated because of her disability, which included back, shoulder, and neck pain.

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However, a major issue, according to the ruling, was Earle’s “inability to say the firm’s name when answering the phone to clients”. Whilst the tribunal accepted that the name “is certainly something of a mouthful”, it did not agree that it was a “difficult or unreasonable task” for a receptionist to perform.

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The tribunal said that she did not meet the statutory definition of disability. Even if she had, she had not informed the firm at any stage, and she was not required to perform any work that discriminated against her.

Are your Cyber Security arrangements up to date?

One of London’s leading commercial sets, Brick Court Chambers, is investigating a “potential cyber incident” following a report that it has been targeted by people using the Medusa hacking software.

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The chambers said in a statement: “We are aware of a potential cyber incident and we are actively working with external cyber specialists to investigate the extent of any data breach. “Chambers remains fully operational and we are taking all necessary steps to secure our systems. At this stage of the investigation it is not clear whether client data has been impacted. We are investigating this matter as a matter of urgency. We decline to comment on the source of the incident.”

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The Medusa ransomware strain steals and encrypts client files and sensitive data, rendering them inaccessible. Ransom demands, often in cryptocurrency, offer a key to unlock the data in return for significant payments.

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The Medusa cyber gang was responsible for 99 breaches in the US, UK, Canada, Italy and France last year, according to the Financial Times.

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This is a massive risk for Law Firms. In spring 2022, the joint Cybersecurity Working Group of the Law Society and Bar Council published its first version of an Information Security Questionnaire, that could be sent to chambers for completion in relation to common shared IT systems that their barristers use. Although the questionnaire could not cover in detail all aspects of data protection, cyber and information security, it contained 24 questions aimed to ensure compliance around key security area.? This questionnaire was updated this month:

Information security when working with chambers | The Law Society

It is a good starting point for a review of your systems, and we are happy to help.

Slater and Gordon Solicitor struck off for never pursuing a claim.

Nicholas Giles Collins, who practised with Russell Jones & Walker and then Slater and Gordon, resigned in 2021 after his firm brought disciplinary proceedings against him.

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Collins had been instructed in 2004 on a personal injury claim against the client’s former employer, the Inland Revenue (now HMRC). He told his client that instructed counsel had initially valued her claim at ￡245,000 and that she had been awarded ￡360,000 following an arbitration. He told the client that he had begun enforcement proceedings against HMRC following an unsuccessful appeal.

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In fact, a claim was never brought. The client had never been awarded any damages and he had never sought enforcement of them. He had not instructed counsel, there had never been any court hearings and he had taken no substantive steps to progress the claim for 16 years.

Exercise care when your opposition is a Litigant in Person

A law firm has lost out on costs after a judge ruled it did not take reasonable steps to avoid a wasted hearing asked for by a former client who mistakenly thought the firm was going to sell her home.

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Clifton Ingram obtained a judgment against Donna Bolt over unpaid legal bills, which was enforced in August last year by way of a charging order against her share in her property. Bolt mistakenly believed the charging order was like an order for the sale of her home and so applied to have it set aside.

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At a prior hearing at Reading County Court, Bolt accepted she had made the application under the ‘misapprehension’ there would be a sale. Clifton Ingram applied for the costs of that hearing.

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Deputy District Judge David Gray-Jones ruled that it was not appropriate to order Bolt to pay the costs of the hearing, stating the firm should have sought a consent order vacating the hearing.

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The judge said: ‘It seems to me that, although I have sympathy with the claimant’s position, the claimant should have been aware it was dealing with a vulnerable litigant in person. 'In my view, it would have been appropriate in accordance with the overriding objective for the claimant to have taken reasonable steps to try to avoid attendance at the hearing. The most obvious step was to try to deal with matters by consent.”

Make sure you distribute your estates properly

A Norfolk firm which paid out wrong sums to estate beneficiaries and then failed to rectify the issue for eight years has been fined almost ￡121,000.

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The Solicitors Regulation Authority said the financial penalty against Hansells was an appropriate and proportionate sanction, reflecting the seriousness of the misconduct.

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The regulator was able to issue such a penalty because Hansells is an alternative business structure and therefore not subject to the SRA’s ￡25,000 fining power limit for traditional firms.

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The firm’s predecessor, Hansells Solicitors, were instructed to deal with the administration of an estate in 2001 but due to a mistake in the interpretation of the rules of intestacy, it distributed the estate incorrectly.

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Incorrect sums were paid to beneficiaries, which meant that client money was improperly withdrawn from the client account.

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The SRA said that for eight years the firm had failed to replace client money and so breached various accounts rules.

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The breach was rectified, but had persisted for ‘longer than was reasonable and only when prompted’, added the SRA. ‘The client account is sacrosanct and any failure to protect client money is serious. The beneficiaries of the estate did not receive their proper entitlements for years. Some of these beneficiaries were elderly, and passed away before they could be properly paid.’

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The SRA accepted there were no dishonesty.

And finally-WE WON!

We are still celebrating! We have already made this announcement, but cannot shout this enough! CRCS Legal won Best Complaint Resolution & Compliance Solutions Firm 2024. Complaints & Compliance Champion of the Year 2024: Barbara Spoor in the SME Legal Awards

It is a great honour to be recognised in providing tailored outsourced Complaint Resolution and Compliance Solutions. The Team offers down to earth advice and workable solutions to your compliance issues. We work hard to provide excellence in the field and to have been recognised in this manner is testament to how much we achieve for our clients.

How can CRCS Legal help?

As an award winning business, with a proven track record in the field we can help you manage the onerous task of compliance and complaint handling.? We can provide:

·??????? A comprehensive compliance and web-site health check. A thorough look at your policies and procedures with solutions for any non-compliance.

·??????? Technical compliance support on an ad hoc or retainer basis. This will give you direct access to compliance professionals.

·??????? Complaint handling and assistance with the Legal Ombudsman (LeO) We can investigate the complaints, make recommendations, and draft your complaint response. We have years of experience of dealing with LeO.

·??????? Compliance training – one off training courses and comprehensive training programmes.? We can help you comply with the SRA’s continuing competence requirements.

·??????? File reviews and audits – detailed and in-depth reviews in accordance with the SRA supervision requirements.

·??????? Bespoke Compliance policies, procedures and templates.?

·??????? Assistance with Lexcel accreditation and visits

·??????? Anti-Money Laundering (AML) – a review of procedures and policies update

·??????? Transparency rules – Are you publishing the correct costs and complaints information?

·??????? GDPR and the ICO – including managing data breaches and SARs.

·??????? Assistance with SRA investigations and prosecutions

·??????? Merger and Acquisitions- assessment of regulatory compliance issues and due diligence.

Talk to us about your needs and see how we can help your business.? All conversations are confidential and free, with no obligation-03302210511; [email protected].