Compliance failures—regulatory requirements, systems and controls
Compliance failures—regulatory requirements, systems and controls

The following Practice Compliance guidance note provides comprehensive and up to date legal information covering:

  • Compliance failures—regulatory requirements, systems and controls
  • Duties
  • Compliance with what?
  • Systems and controls
  • Reporting compliance failures to the SRA
  • Monitoring compliance failures

The COLP must take all reasonable steps to ensure compliance with:

  1. the SRA Handbook, except the SRA Accounts Rules

  2. other general regulatory requirements that apply to law firms, eg legislation relating to anti-money laundering, data protection or equality and diversity

This obligation is imposed by the SRA and it is important that the COLP implements robust systems and procedures to ensure compliance.

Duties

The COLP has three core functions:

  1. internal implementation of compliance systems

  2. external reporting of failures to the SRA

  3. maintaining records of compliance failures

Internal compliance function

The COLP must take all reasonable steps to ensure compliance with:

  1. any statutory obligations to which the firm and/or its employees or managers are subject, but only as far as those statutory obligations relate to the firm’s authorised activities

  2. the terms and conditions of the firm’s authorisation

The COLP is not expected to ensure compliance with the SRA Accounts Rules; this falls to the compliance officer for finance and administration (COFA).

This Practice Note is concerned with recording and reporting compliance failures. For more information about the duty to implement compliance systems see Practice Note: Compliance officer for legal practice—title and duties.

External reporting function

A key part of the COLP role is the duty to report compliance failures to the SRA. The SRA distinguishes between material and non-material compliance failures: