Protecting your practising certificate and the firm against fines and sanctions in an increasingly hostile regulatory environment

Quality PI: Protecting your practising certificate and the firm against fines and sanctions in an increasingly hostile regulatory environment.

There is credible evidence that increasing numbers of small and medium sized firms are capitulating to the SRA when faced with fines or sanctions because they neither have the time, knowledge, appetite or resource to defend themselves.

However, there have been a few recent examples in the press where the SRA attempted to bring charges against firms only for their case to be overturned on the basis that reasonable evidence of deliberate misfeasance was absent.

So, from the point of view of protection (this is, after all, not just about the firm and its financial health, it’s also about reputation and therefore continuing existence) what can be done?

Protecting individual’s practicing certificates and their livelihood:

Quality PI have developed a policy which offers specialist advice, defence and protection for individuals and firms who have encountered a regulatory issue. It provides expert legal resource with knowledge of SRA protocols to support solicitors and their firms in early-stage engagement, providing responses, collating documentation and crucially in providing representation in a tribunal or disciplinary hearing.

Whilst examples include code of conduct, AML and client money breach allegations, the protection extends to any aspect of regulatory engagement, intervention or defence. It is intended to help level the playing field in situations where the regulator may have been quick to take action, and provide early intervention and mitigation where there is a case to answer. 

SolicitorInsure aims to help protect an individual’s own practicing certificate where this is under review due to some form of SRA investigation, sanction or disciplinary proceedings. It is purchased by the law firm and applies to every employee who is acting in a professional capacity and who has the potential to be engaged by the SRA for some reason.

Protecting the firm:

The firm can protect itself by purchasing a management liability (directors and officers) policy which carries an entity extension. This will protect the senior managers and also the entity against the costs of defending actions and representation in regulatory tribunals.

The policy will, for example, cater for liabilities arising out of the positions of COLP and COFA.

It is crucial, however, to take sound advice on the choice of Insurer and wording because two pitfalls exist:

1. Some insurers will not provide this cover to legal sector partnerships.

2. Many carry a professional services exclusion and don’t cater adequately for the regulatory risks which firms face.

For these reasons, some law firms are not adequately covered, and it is essential to seek out a broker who knows and understands the principles rather than those who seek to upsell or cross sell.

For a discussion or advice please call Gillian Anderson on 0151 351 6555

For quotations for practising certificate protection, please mail Rebecca Kee on [email protected] or call her on 0808 169 1500.

QPI – quality, professionalism and integrity.

Kindly shared by Quality PI