Essential Responsibilities of the COLP

The role of the COLP and COFA doesn’t need to be complicated.  We will be focussing on the COLP role in this article and will break it down in detail.

The SRA Standards and regulations set out the expectations of a COLP in section 9: Compliance Officers of the Code of Conduct for Firms.

‘The COLP must take all reasonable steps to:

• ensure compliance with the terms and conditions of the firm’s authorisation;
• ensure compliance by the firm and its managers, employees or interest holders with the SRA’s regulatory arrangements which apply to them;
• ensure that the firm’s managers and interest holders and those they employ or contract with do not cause or substantially contribute to a breach of the SRA’s regulatory arrangements;
• ensure that a prompt report is made to the SRA of any serious breach of the terms and conditions of the firm’s authorisation, or the SRA’s regulatory arrangements which apply to the firm, managers or employees;

save in relation to the matters which are the responsibility of the COFA…’

In summary the COLP is responsible to ensure that systems and controls are in place to enable the firm, as well as its managers and employees and anyone who owns any interest in the firm to comply with their obligations.  These obligations include:

• any terms and conditions under which the firm is authorised by the Solicitors Regulation Authority (“SRA”) to provide legal services;
• the SRA Standards and Regulations;
• any other relevant legislation, regulations and rules that apply to the firm, its managers, interest holders or employees.

The COLP must take all reasonable steps to ensure compliance with the terms and conditions of their practice’s authorisation.  They must take all reasonable steps to ensure compliance with any statutory obligations for example, the duties imposed by the Legal Services Act 2007, the Solicitors Act 1974, the Courts and Legal Services Act 1990 and the Administration of Justice Act 1985.

To understand the role of the COLP you can look at it as a job description and these are some of the elements that would be included:

• Devise and implement an internal compliance failure reporting process, to include anonymous reporting of compliance failures.
• Maintain a central register of all compliance failures in a form that allows the COLP and the firm to:
  • monitor overall compliance with obligations.
  • assess the effectiveness of the firm’s systems.
• Identify serious breaches at an early stage, taking into account:
  • the detriment, or risk of detriment, to clients.
  • the extent of any risk of loss of confidence in the firm or in the provision of legal services.
  • the scale of the issue.
  • the overall impact on the firm, its clients and third parties
  • any other relevant factors
• Ensure the firm’s compliance failure register is made available to the SRA on request.
• Review the compliance failure register to establish whether any action is required:
  • on existing compliance failures.
  • to prevent or minimise the risk of further compliance failures.
• Report all serious breaches (either single breaches or part of a series) to the SRA promptly. The firm’s policies and procedures should define what the firm considers the terminology ‘serious’ and ‘prompt’ to mean.
• Report non-serious breaches to the SRA if requested by the SRA.
• Prepare and maintain a Compliance Plan.
• Maintain a calendar or task list of routine, recurring compliance activities with suitable reminders to ensure key compliance dates are met.
• Establish proper policies and processes in all areas of compliance.
• Keep abreast of any regulatory or other compliance changes that may affect the firm and, as necessary:
  • Amend existing compliance policies and processes.
  • Devise and implement new compliance policies and processes.
• Ensure employees are trained on:
  • any relevant compliance arrangements and policies.
  • their duty to internally report compliance failures to the COLP.
• Liaise, as required, with the other partners/COFA to ensure appropriate sharing of information and consistency of approach.
• Provide a compliance report to include:
  • the status of the firm’s compliance arrangements.
  • a summary of internal and external compliance failures reported over the period.
  • any recommended compliance activities (e.g. to amend a particular policy in response to a regulatory change).

COLPs should consider how they are going to implement the changes across the firm and make everyone aware of the requirements and also the changes and updates as they occur.

New systems and processes will only add value if everyone within the firm is aware of them.  New processes are usually incorporated into the Firm’s Office Manual or suite of policies / procedures and this can be helpful for new-starters and temporary employees. However, written processes will only add value if everyone follows them. It is important to ensure new employees are made aware of the processes and follow them.  This information should be part of the Induction procedures.  If changes are made to current policies/procedures you should provide training.

COLPs should also consider involving employees in designing any new systems or processes to ensure that they are practical and functional.

The latest version of any electronic documents must be clearly noted and old versions deleted.

Compliance is an ever changing environment and there is a lot of work involved to get everyone trained on new procedures and to ensure all documents, processes and procedures are compliant but the work doesn’t stop there – compliance is an ongoing project that requires maintenance and time to ensure the COLPs stay on top of the requirements.

If you have any questions or would like any information on how Legal Eye can support your firms Compliance Officer, please email [email protected].