Regulatory changes and new opportunities: What the new BSB Handbook will mean for you

1. Regulatory changes and new opportunities:What the new BSB Handbook will mean for you Ewen Macleod Head of Professional Practice Bar Standards Board

2. Overview • New structure and approach • Key changes in new Code of Conduct • Key enforcement changes • New approach to supervision • Entity regulation • Next steps

3. BSB Handbook • Introduction • Code of conduct • You and the Court • Behaving ethically • You and your client • You and your regulator • You and your practice • Scope of practice, authorisation and licensing • Qualifications (yet to be reviewed) • Enforcement • Definitions

4. The Code of Conduct • 10 core duties • Core elements of professional conduct that apply to all barristers (and others) • Outcomes • Descriptive, rationale for rules and aid understanding of rules and guidance; not mandatory but will be taken into account when considering breaches of the rules • Rules • Supplementing core duties where specific rules necessary • Guidance • Assists in the interpretation of rules, examples of expected behaviour etc (not mandatory)

5. The Core Duties • You must observe your duty to the court in the administration of justice [CD1] • You must act in the best interests of each client [CD2] • You must act with honesty and integrity [CD3] • You must maintain your independence [CD4] • You must not behave in a way which is likely to diminish the trust and confidence which the public places in you or in the profession [CD5] • You must keep the affairs of each client confidential [CD6] • You must provide a competent standard of work and service to each client [CD7] • You must not discriminate unlawfully against any person [CD8] • You must be open and co-operative with your regulators [CD9] • You must take reasonable steps to manage your business, or carry out your role within your business, competently and in such a way as to achieve compliance with your legal and regulatory objectives [CD10]

6. Some key changes • All core duties to apply to unregistered barristers when providing legal services • Trust and confidence and co-operation with regulators apply at all times • Also need to provide information to clients • Associations and premise sharing • generally relaxed; but novel business arrangements can’t circumvent the regulatory requirement / outcome and especially not confuse clients

7. Reporting certain matters to the BSB: • includes serious misconduct by self and others • Exemption for barristers working on Ethical Helpline • Chambers admin: • Appoint someone to liaise with BSB • Members to take (reasonable) personal responsibility • No appointment of person disqualified by BSB • Requirement to have risk management arrangements in place • Option to apply for authorisation to conduct litigation

8. Further areas of clarification • Referral fees • Not misleading clients • Accepting and return of instructions • Non-discrimination and cab-rank rules • Ceasing to practice • Client money • Insurance

9. Enforcement changes • Admin sanctions available for breach of any rule • Power to impose rests with PCC (can be delegated to staff) • Max fine increased to £1,000 for individuals • ‘Professional misconduct’ will be a breach not appropriate for NFA or admin sanctions and referred to a disciplinary tribunal • New enforcement policy

10. Enforcement changes • Disqualification powers: • Where breach caused and in public interest to prevent them working for a BSB regulated person • Requirement to seek BSB approval before employment • Only DT (or interim panel) could impose • May apply to us to have it lifted • Interim suspension and disqualification panels: • PCC’s powers enhanced • Triggers for referral and powers available widened • Immediate interim suspension powers

11. Supervision • Recently consulted on proposals for risk-based approach to supervision; • Whilst the current focus is on Chambers/entities – risk based supervision extends to other areas of regulation – CPD, QA of education providers; • All supervision of the practising Bar consolidated within single department; • Risk assessment framework will be a fundamental tool in determining supervision priorities; • Key part of proposals to become an entity regulator; • On-going supervision of all sets of chambers and new entities (rather than one off spot checks); • Consideration of evidence from wide range of sources (all BSB departments, LeO and specific evidence gathering);

12. Supervision cont. • Greater priority given to higher risk sets of chambers or higher risk areas through thematic reviews; • Supervision v enforcement – a focus on early, constructive engagement rather than punishment; • Only persistent or very serious non-compliance referred for enforcement; • Supervision to be available for individuals instead of, or following, enforcement action.

13. Regulation of entities • BSB will regulate entities where generally: • The services are the same as those permitted to be provided by the self-employed Bar under BSB regulation (option to include litigation) • All owners with material interest are also active managers of the entity (managers / owners must be natural persons) • A majority of an entity’s managers are entitled to practise as advocates with higher rights (but need not all be barristers) • Restrictions on non-lawyer owners and management (ABS only) • Discretion over the application of these principles, subject to risk assessment • Aim is to be low risk and draw on the capacity and capability of the BSB; and • Be flexible in adapting to changes in the market

14. Regulation of entities (2) • New Handbook proposes new duties for managers of entities and authorised persons who work in them (rules similar to those for self-employed barristers) • Cab rank rule to apply in a similar way as to individuals (named advocates) • Specific HOLP and HOFA duties • Duty to ensure all employees do nothing that causes or contributes to a breach of the Handbook

15. Next steps • LSB considering Handbook application for individuals (decision due early July) • Next application (non-ABS entities) submitted following that decision – decision due Sept? • Both due to go live January 2014 • ‘Licensing authority’ application submitted after entity decision (aim to regulate ABSs in 2014)

16. Any questions?