Training up: getting a head start on the new regulatory rulebook
Firms looking to demonstrate early compliance with the forthcoming SRA Standards and Regulations could do worse than review their training and supervision programmes, says Susanna Heley
It’s official, after 20 editions in seven years, the SRA Handbook 2011 is being scrapped in 2019. Its replacement – the snappily titled SRA Standards and Regulations – was approved by the Legal Services Board on 5 November 2018 and will come into force on a date to be con rmed between April and July 2019.
Our new rulebook is vastly reduced in length and is intended to permit greater exibility in practice. For the first time, it comprises two codes of conducts – one for individuals (Solicitors, RELs and RFLs) and one for firms. Outcomes and Indicative Behaviours have been abandoned and we will now have “standards” to contend with.
A lot has already been said about the new rulebook; it is controversial and contains some dramatic changes – time will tell how well they will work. For those of us on the ground though, the devil may well be in the detail. My brief in writing for the relaunched Solicitors Journal is to provide helpful and practical tips to help solicitors in their everyday practice. With that in mind, this article focuses on some forthcoming changes which may require firms – and individuals – to review their policies and approach to supervision and training.
One area in which there are a number of potential traps for the unwary is in relation to supervision. Whereas the 2011 Handbook contains few express requirements as to staff training and supervision the new Standards and Regulations creates a three-tier responsibility pyramid. The starting point – at the bottom of the pyramid – is that all individuals must keep up to date with and follow the law and regulation governing the way they work (Individual Standard 7.1).
Individuals supervising others are accountable for the work carried out and must “effectively supervise” work done for clients (Individual Standard 3.5). Those “managing” others must also ensure the competence, professional knowledge and skills and understanding of legal, regulatory and ethical obligations of those they manage (Individual Standard 3.6).
This then is the second tier of the pyramid and appears to create a system whereby any individual supervisor or manager can find themselves facing regulatory interest for the actions of a supervisee. In theory, the requirement that supervision of client matters be effective tends to suggest a risk that supervision may be criticised with hindsight – something went wrong and that proves, without more, that supervision was not effective.
This in itself creates a risk for firms. Solicitors who are responsible for supervising the work of juniors and/or unadmitted sta may be simply solicitors rather than managers. They may not necessarily be prepared for the express requirements of the Individual Code and may need additional training from managers to ensure that they understand that aspect of their regulatory obligations – see where I’m going with this?
There is also a very large question mark over what might be meant by ‘ethical’ obligations. On basic principles of construction, it can’t simply mean legal and regulatory obligations since those are expressly listed separately. Given the way that the courts have defined the question of a lack of integrity in recent years, it may be surmised that a solicitor’s ethical obligations at least include the need to act with integrity. In itself this causes some difficulties; as Jackson LJ said in the case of SRA v Wingate and Evans: “... it is not possible to formulate an all-purpose definition of integrity. On the other hand it is a counsel of despair to say: ‘Well you can always recognise it but you can never describe it’.”
In the absence of any other guidance on what ‘ethical obligations’ may mean, one must make their best guess. Understanding and taking to heart the Court of Appeal’s reasoning in the Wingate and Evans case is likely to be a reasonable first step in trying to understand how the issue of ethical behaviour has been considered by the courts in the context of solicitors’ practices.
Whether and to what extent ‘ethical obligations’ go beyond acting with integrity is open to debate and may cause some consternation among generations of lawyers for whom ‘ethics’ has been no part of legal training. Ironically, those solicitors who take their professional obligations most seriously are those most likely to worry over what this new obligation entails as it is a new requirement which has no obvious precedent outside of the vexed question of integrity.
The final tier of the pyramid is made of up the firm itself and its compliance officers. Their responsibility is made clear by Firm Standards 4.3, 4.4 and 9.1 which require the firm to ensure competence etc. in the same terms as Individual Standard 3.6 in respect of managers and employees, have an effective system in place to ensure supervision of client matters and require the COLP to take reasonable steps to ensure compliance with regulatory arrangements.
The combination of these measures, taken with the requirement on firms to keep and maintain records to demonstrate compliance with the SRA’s regulatory arrangements indicates that firms wishing to get a head start on their preparation for the next regulatory overhaul could usefully begin by reviewing their training and supervision programmes. I suspect that training, in particular, will be a key benchmark against which firms can measure compliance with these requirements. Performance reviews, file assessments and evidence of proactive supervision will all assist in demonstrating that standards are being met; however, all of these methods are reactive. They help to uncover problems which have already occurred. On my reading of the new requirements, that is unlikely to be sufficient to avoid regulatory interest if misconduct occurs because of a failure in supervision or in circumstances where an employee simply did not know what was expected of them.
While it does not appear to be intended by the SRA that supervision requirements will detract from the need for individuals to assess and maintain their own competence and knowledge, it must be apparent that a degree of individual, managerial and firm oversight is expected and should be recorded in order to demonstrate effective compliance. Taking a critical look at your firm, its policies and approach to supervision based on a risk assessment of your work, your clients and your staff profile may help to demonstrate that you have taken all reasonable steps to ensure compliance (COLPs in particular may wish to note that wording...).
It may assist firms to look at supervision both from the perspective of what is expected of a supervisor and from a supervisee. When, for example, should a supervisee proactively seek additional guidance? Is there a clear process as to how supervisees can gain further help or guidance if (say) their immediate supervisor is unavailable?
Firms will need to consider their training programmes, how they identify any training needs and, as part of that process, take into account that the approach of the new rulebook is minimalist. This means, for example, that one cannot simply look to the SRA Standards and Regulations for a complete answer to any question of regulation. One of the ways in which simplification has been achieved is by avoidance of duplication. That means that any regulatory requirement which had appeared in the SRA Handbook but was a mirror or restatement of an obligation contained in legislation will not appear in the new rulebook but will still apply.
The general obligations to maintain knowledge of the law and comply with it incorporate such requirements by reference. That may mean that solicitors need to look again at the source of professional obligations which appear, on the face of the new rulebook, to have been abandoned.
Susanna Heley is a partner at RadcliffesLeBrasseur