CommitteeReports Revenue Law Committee
The Revenue Law Committee continues to focus on commenting on tax matters relevant to the work and clients of City firms, in particular, responding to HMRC and HM Treasury consultations.
There have not been any consultations meriting a response in the last quarter. The Committee is currently working on responses to three live HMRC consultations:
• Partnerships: A review of two aspects of the tax rules;
• Modernising the taxation of corporate debt and derivative contracts; and
• Strengthening the Code of Practice on Taxation for Banks.
These submissions will be reported on in the next edition.
Darren Oswick of Simmons & Simmons has joined the Committee in place of Paul Hale.
Copies of all prior submissions are on the CLLS website.
Bradley Phillips, Chairman, Herbert Smith Freehills LLP
Professional Rules & Regulation Committee (“PR&RC”)
The PR&RC has continued to have an active time over recent months.
The PR&RC has good channels of communication with SRA representatives at several levels. As well as routine communications on day to day issues, we continue (with Alasdair Douglas and David Hobart) to have quarterly meetings with senior individuals at the SRA, including Charles Plant.
Through
these meetings, we have wide ranging discussions on current issues, covering such issues as the financial stability of the legal sector, the cost of SRA interventions and where this should fall, Relationship Managers having a more proactive approach, the SRA assisting law firms in resisting
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excessive client demands through issuing non-binding recommendations on appropriate responses to particular demands. This last topic has arisen largely as a result of a number of firms encountering client demands that they sign up to particularly demanding terms of engagement, and it is felt that the suggested involvement of the SRA can help firms resist excessive risk without infringing competition laws.
We have also continued to hold bi-annual Open Forum meetings for representatives of all CLLS firms with senior management of the SRA. These are popular and well attended events. One significant development which came out of the Open Forum in late 2012 was the challenge to come up with a “top ten” list of regulatory burdens which might be lifted. Having consulted CLLS members, we put forward our top ten and were pleased when nine of them were quite readily accepted.
The outstanding
suggestion was the removal of the duty on a COLP to report non material breaches. While the SRA initially said they could not lift that requirement, they have subsequently agreed to do so.
For a considerable time, the SRA did not address a number of proposals put forward by the PR&RC for amendment to the rulebook in May 2011.
Eventually, towards the end of
2012, the SRA did eventually address these issues, and the vast majority of our proposals have now been accepted. The one outstanding issue, on which the PR&RC continues to press, is the suggestion that there should be an obligation on solicitors to report internally to the firm’s COLP any matters which the COLP is required to record and, perhaps, report to the SRA.
The SRA’s review of international regulation has been a major task for the PR&RC this year. This is a review which the PR&RC has been requesting for many years, and were therefore supportive when the review eventually commenced last year.
After a lot of dialogue with PR&RC members, the SRA issued a
consultation paper in December 2012. Generally, we did not agree with the approach adopted by the SRA in that paper and, since then, a sub group of the PR&RC has worked hard to change the SRAs intended course of direction. That has very largely been successful, and is reflected in the further consultation launched in May. The PR&RC is now hopeful that an appropriate and pragmatic resolution will be achieved, and implemented this Autumn.
The PR&RC has also responded to the SRA’s consultation on financial penalties. The majority of our activities have related to the SRA, but this will not always be the case.
Looking forward, it is anticipated that a good deal of work will be required by the PR&RC in the light of the recent statement from the Ministry of Justice that it plans to review the legal services framework with the aim of reducing regulatory burdens and simplifying the regulatory structure generally.
This will be an important
opportunity for the CLLS to improve current regulation, reducing current layers and associated cost.
In addition, it is believed that the SRA will soon be looking at issues around the duties of confidentiality. This will likely also touch on such issues as access within firms to document management systems and the wisdom of acceding to client requests to accept inward secondees.
Chris Perrin, Chairman, Clifford Chance LLP
Regulatory Law Committee
The Regulatory Law Committee (the “Committee”) meets monthly and has, since February, responded to the following consultations.
1. SUBMISSION TO THE FCA IN RESPONSE
TO FSA
CONSULTATION PAPER 13/8 – ‘PUBLISHING INFORMATION ABOUT
WARNING NOTICES’
Generally, the Committee noted that the FCA is not required to
ENFORCEMENT
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