11th September 2017 | May 2016

SPONSOR - PKF Francis Clark - Is your practice providing banking facilities whilst acting under a Lasting Power of Attorney / Court of Protection appointment? Is your practice providing banking facilities whilst acting under a Lasting Power of Attorney / Court of Protection appointment?   In December 2014 the SRA issued a warning notice on the improper use of a legal firm’s client account as a banking facility.   The notice served as a reminder and provided additional clarification that a legal firm must not provide banking facilities through their client bank accounts. Whilst this requirement has in fact been in place for some time and is as stated in the SRA Accounts Rules 14.5, the issue of the warning notice generated a number of enquiries in the legal sector. A common enquiry from the above related to firms, where a solicitor has for example been appointed under a Lasting Power of Attorney and the client has subsequently become mentally incapacitated. Alternatively the solicitor has been directly appointed as a deputy under a Court of Protection in their professional capacity.   One of the duties that can apply under these appointments through The Office of the Public Guardian for mentally incapacitated clients is to manage the client’s financial affairs to settle items such as household utility bills, etc. on their behalf.   This has led to a debate, on if it is considered acceptable for a solicitor in a law firm acting under these types of appointments, to hold the incapacitated client’s funds within the firm’s client bank accounts as part of the financial duties.   What is the proposed justification to use the firm’s client account to hold the clients funds under these appointments? The main justification put forward, so that firms could hold such funds in their client bank account to manage the financial duties of a mentally incapacitated client, is by virtue the solicitor has been appointed to provide the service as a result of their professional standing. In addition as a result of the appointment in this professional capacity the solicitor would issue fees for providing this service.   It was therefore considered that it could be justified that there was an underlying legal transaction. This was seen to be supported by virtue the client is mentally incapacitated and not capable to manage their own financial affairs. It could therefore appear to be reasonable to assume that the solicitor could hold the clients fund in the firm’s general client bank account.   Additional points had been put forward to use the firm’s client bank account in these situations; these are:i) Provides additional protection to the funds being held in a client bank account as afforded from the full application of the SRA Accounts Rules 2011 ( As opposed to a limitation of the SRA Accounts Rules 2011 within rules 8/9/10) ii) Where such funds are recorded through the general client bank account and the legal firm’s accounting records, this would enable a greater oversight of the transactions other than just the appointed attorney / deputy themselves. iii) Allowing the attorney / deputy to appropriately delegate routine processes / tasks under the appointment (but not responsibility) within the firm.   iv) As a result of iii) achieving a cost benefit and improved efficiency in dealing with the case type for the benefit of the client matter.   All of the above appear to be reasonable justifications to place the client funds into the firm’s client bank account, in order to manage the financial duties under the appointment for the incapacitated client.   However it has been apparent there has been conflicting guidance in the legal sector on the above application. Clarification on the use of the client bank account whilst acting under a Lasting Power of Attorney / Court of Protection. We have sought informed clarification on this particular issue based on the facts above. This has been supplem...

11th September 2017 | May 2016

SPONSOR - Alchemy Turns Ransomware into Solid Gold Security Antivirus is unable to stop advanced ‘zero-day’         Ransomware attacks so you and your clients need extra security. Endpoint, Detection & Response Specialist IT Providers, Alchemy Systems would like to share a case study on a recent incident. Situation Every day you hear of a hospital, school, government department or business being attacked by Ransomware, disabling their networks by encrypting important files. “No business is too big or too small to be targeted,” comments Nathan Mills of Alchemy Systems heading up our south east operation, “hackers will lock your network and hold your valuable data to ransom.” Hackers no longer need to be technical whizz-kids, they can buy readymade Ransomware toolkits on the ‘dark-web’ for as little as £100, and this means more attackers and therefore more victims. Small and Medium-sized Businesses (SMBs), who don’t have a dedicated IT Security person and sophisticated antivirus and backup solutions in place, are especially vulnerable. This was the situation an award-winning building consultancy firm found itself in. Attacked by ransomware that their antivirus didn’t detect, it encrypted all the consultancies vital files. The consultancy needed some specialist IT advice so they called upon Alchemy Systems, an IT solutions company who offer a full managed security service. Solution As the ransomware had bypassed the consultancies existing antivirus, Alchemy made use of Panda Cloud Cleaner to deep-clean the entire network and remove all traces of the infection. “We greatly appreciate Panda Security’s channel strategy and portfolio, with their partner console    we can manage our entire client base from a single point, something no other vendor is able to provide”   While most likely that the ransomware attack was through a visit to a compromised website or an infected email, Alchemy wanted to ensure all network vulnerabilities were secured. Alchemy installed Adaptive Defense 360 from Panda Security which combines a complete Endpoint Protection (antivirus, firewall, device control, content filtering etc.) as well as Endpoint Detection and Response capabilities (process monitoring, application classification, vulnerability location and uniquely - forensic information). Evaluation “With Adaptive Defense 360 the process of securing the network using a single solution was much more efficient”, said Nathan “and once implemented we could see suspicious activities being automatically classified and blocked without any need for manual intervention.” Able to work alongside alternative antivirus products Alchemy were able to roll out Adaptive Defense to other prospects on a trial basis to show hidden malware and vulnerabilities, giving them options to improve security. Discover all that you need to know about Cyber Extortion and how to protect you and your clients:   Download the practical Security Guide http://tinyurl.com/h5vc37z   Alchemy Systems Group – Exeter, Honiton, Egham, PrestonTel. 01392 248498 sales@alchemysys.co.uk www.alchemysys.co.uk www.alchemyinternet.netAlchemy Systems have 17 years of IT systems experience and are a Microsoft Partner. Alchemy SystemsDesigns, Supplies, Installs, Supports and Protects clients’ IT systems. The legal sector has always been a strategic focus. Our staff are experienced in the specific needs and challenges of law firms from service desk to strategy to protection services.   ...

11th September 2017 | May 2016

SPONSOR - Aon - Cyber risks; protecting your firm and your clients Cyber risks; protecting your firm and your clients   The media has recognised the newsworthiness of financial crime and, in particular, criminals’ attraction to law firms and their client accounts. As a consequence, TV time and column inches have been dedicated to the plight of solicitors falling victim to scams. Banks are also playing their part through prominent TV advertising campaigns alerting their customers to the risk of financial crime.Insurers welcome the increased awareness generated by this publicity but, unfortunately, ongoing claims notifications demonstrate that the profession is still firmly in the fraudsters crosshairs. It’s all too easy to assume that fraud is yesterday’s problem and that fraudsters will have moved on to different victims, perhaps even in different countries but this is not the case.   To put the enduring nature of this problem into context, one Participating Insurer has recently announced its exit from the Solicitors’ Professional Indemnity market citing client account fraud as one of its key motivators and predicting that this type of fraud is unlikely to abate.   One only has to look at the scale of cyber-crime in the UK to empathise with the pessimistic views that are being expressed. BBC’s Moneybox reported there were 7.6 million reports of cybercrime in the last 12 months. In the first 6 months of 2015, financial crime in the UK rose by 6% to £325m, with losses arising from telephone fraud rising by 95% to £14.4m in the same period according to Financial Fraud Action UK. Property-related man-in-the-middle attacks have cost firms and their clients £10m over recent months warns the Telegraph.Law firms hold significant sums of money in their client accounts, particularly if they handle property, estate administration, trusts or high value personal injury and clinical negligence claims. Those sums are very attractive to fraudsters.   Any successful fraud is a threat to your practice. The consequences vary from reputational damage to negligence claims, regulatory investigation, intervention and worse. If your business failed as a result and you were made bankrupt, you wouldn’t be the first solicitor to face such a bleak outcome. The consequences for your clients can be as serious if they end up losing a deposit saved up over several years.   Partners should be sending strong leadership messages, at least annually, to all personnel about the risks of fraud and the threat it represents to the firm. Underlying this message should be written fraud prevention and awareness training policies and supporting procedures to which all personnel are required to adhere strictly. These policies and procedures, and the adequacy of their performance, should be under ongoing review by a member of senior management, executive committee or similar senior team.   The Institute of Risk Management defines cyber risk as any risk of financial loss, disruption or damage to the reputation of an organisation from some sort of failure of its information technology systems. The Solicitors Regulation Authority use cyber risks as a convenient label to describe the current wave of frauds even though many of them do not fit easily within this definition. A more common threat arises from social engineering risk.   Social engineering is a low-tech but still highly effective scam where fraudsters raid information from social media and intercepted emails. Using this to make themselves appear convincing and trustworthy, they manipulate their victims into sharing confidential information or transferring funds. LinkedIn is as vulnerable to attack as other types of social networking.According to the City of London Police (confusingly for law firms known by the initials COLP), the two most common types of social engineering involve email (77%) and phone calls (12%), the remainder being made up of text messages, mobile phone calls...

11th September 2017 | May 2016

President's Charity   NORTH DEVON HOSPICE PROUD TO BE DASLS CHARITY OF THE YEAR   It is with great pride that North Devon Hospice has been named as charity of the year for the Devon & Somerset Law Society, as nominated by new President Mark Roome. Mark is a big personal supporter of the charity and recently took part in their Mission:Unbreakable fundraising event, a grueling obstacle challenge in which he had to tackle 10km of mud, water, fire and ice! But he and the rest of the team at Toller Beattie pushed themselves through this in order to support a cause that he is passionate about. North Devon Hospice’s Chief Executive, Stephen Roberts, says that many people have misconceptions about hospice care. “A lot of people hear the word ‘hospice’ and think that it’s the end, but in fact, we are all about living life to the full.” He said. “We believe that the important thing is the life that you have in your days, not the days you have in your life. So we do everything we can to help our patients and families deal with the impact of illnesses such as cancer, allowing them to live the fullest life possible.”   Stephen added that the hospice provides a multitude of care, all tailored to suit the needs of each individual. “We like to get involved from the moment someone is diagnosed with a life-limiting illness. When someone is diagnosed with a terminal illnesses, it’s not just their lives that change forever it’s also their loved ones. Hence we believe in being there for all of the family. Whilst Our Community Nurses Specialists offer care and expertise in patient’s own homes, we have a whole care team that look after the emotional well-being of the entire family including children. When symptoms become more complex we have a Hospice to Home team that provide care round the clock, plus a purpose-built Bedded Unit where our doctors and nurses are on hand 24/7. People often describe our care as like walking in to a big hug, and that’s how we like to make people feel.”   We need to raise over £3m from scratch every year as a local independent charity. We are not part of the NHS and as such we are reliant on the generosity of people who believe in us and the care we provide. Stephen said, “We would like to thank Mark Roome and everyone involved in the DASLS, because without support from people like you, we couldn’t be here to care for people at a time in their life when they and their loved ones need all the support they can get. All of the team here at North Devon Hospice we’re delighted when we heard the news of Mark’s decision and as such we look forward to working in partnership with you all this year to achieve great things and hopefully have some fun along the way.”   To find out some of the ways in which you could support the work of North Devon Hospice, please visit www.northdevonhospice.org.uk.  ...

06th March 2020 | March 2020

Dear All,   This year really is flying by. I have just had my birthday.   After updating you previously on the excellent catch up I had with the Law Society CEO Paul Tennant on his visit to the south west last November, I had not expected to be back in touch with him quite so soon.   Sadly, this time it was in less happy circumstances.   I was, like many of you, shocked and saddened in January to hear the news and see the pictures of the substantial fire at Chancery Lane in London. I have emailed Paul Tennant and James Shepherd, our Law Society Relationship Management Executive, to send our best wishes and we are hoping that the building will be back to full use very soon.   As I write this report, preparations are in full swing for the 2020 DASLS Legal Awards & Dinner. As you know the Annual Dinner is being held again this year at Exeter Cathedral.  The event is to take place on the 30th April 2020. After the success of last year, we are hoping that once again the event is sold out which would mean we will have around 480 people attending.  If you have not done so already, please contact Llew Nicholls and the team at our Awards partners ‘Grow Marketing’ who have worked very hard alongside our very own Tony and Monique to achieve full sponsorship of this event.   You can contact Llew to book the remaining places by emailing Llew directly at Llew@growmarketinguk.com. There have been more nominations than ever before with more entries making the short list. Please do not miss this dazzling occasion.   You will all have received DASLS latest 2020 training courses programme. Tony Steiner and the team have worked hard to arrange these events. You will see that as members you get preferential rates and if appropriate reduced rates for multiple attendees from your firms. Please take advantage of these services as a proportion of the monies do go to support our Society’s broad continuing education offering.   If I do not see you individually before I look forward to catching up with you at the 2020 DASLS Legal Awards and Annual Dinner in April.   With very best wishes   Nigel Lyons President 2019-2020...

06th March 2020 | March 2020

The first big social event of the year was the annual DASLS Quiz which is the grand finale of the Challenge Cup. It is an event I thoroughly enjoy and I make no apology for making it a bit challenging.   This year did not disappoint there being just ½ point between first and second place and resulting in joint winners of the Challenge Cup. Congratulations to Ashfords and Michelmores both of whom knew that the study of birds’ eggs is Oology. The next Challenge Cup kicks off with the usual Skittles match in Dawlish when the magnificent Skittles Cup will be contested.   The latest meeting of the County Societies Group took place in February when we were guests of the SRA in Birmingham. DASLS Deputy Vice-President Adrian Richards and I attended.  We were welcomed by their Chief Executive Paul Philip who set out some key messages around SRA activity emphasising their desire for light touch engagement with solicitors and good channels of communication. He said that the SRA was working well with The Law Society and was focused on creating an environment where solicitors could be innovative and use the latest in technology. AML is a key area of activity and following the appointment of the new Chair, Anna Bradley, they are working to provide better customer care. He also explained that until now the SRA had not taken any position on issues such as Access to Justice, Rule of Law and Advice Deserts. They were considering looking at, and taking a position on, one or two of these issues each year. There followed several presentations by senior staff at the SRA dealing with Enforcement Strategy and reporting concerns; Customer information – Transparency Rules and clickable logo.; the SQE  and Anti-Money Laundering. Comprehensive slides were produced to accompany each presentation which I will forward together with my notes to any member who wishes to see them. Just email me —tony@dasls.com.  There followed an interesting tour of the building. SRA have around 600 staff members with the majority based over three floors at the Cube. The next meeting of the County Societies Group will be in the summer and we also plan a Parliamentary Liaison event at Westminster later in the year.   I am pleased to announce that DASLS has two new Partners; Moneypenny who look after your telephone calls when you are not available and Dictate Now who offer Dictation Systems and outsourced document preparation. They join our current Partners: Alchemy; PKF Francis Clark; Landmark; Lockton; Unoccupied Direct; WebBoss and Wessex Searches. We are thankful for the support our partners give us and encourage you to use them where you can.   Depending when you read this our joint event with the Legal Sustainability Alliance on 5th March will be about to take place or will have passed. Regular readers will know that the Society has formed a small working party to encourage and identify how firms can improve their sustainability. The main Committee have suggested that this forms a Sub-Committee. We will arrange a meeting of the working party after the event on the 5th March with a view to progressing this. Anyone who is interested in this please let me know.   Tony Steiner,  Executive Director DASLS....

06th March 2020 | March 2020

You may know that DASLS is fortunate to be twinned with Bilbao, Erlangen, Gdańsk, Leuven, Rennes and Verona. Such twinning arrangements underpin a sense that we belong to one community of values on the basis that these relationships are based on reciprocity. Each year, we meet to discuss and debate important legal issues of the day, whilst discovering the cultures and languages of our partners. 2020 is DASLS turn to host such an event, which will be rounded off with the Sunday Legal Service at Exeter Cathedral on 7 June 2020 and to which DASLS members are cordially invited!   The subject of our conference (on 5 June at County Hall in Exeter) will be around the impact of artificial intelligence (AI) in the sphere of human rights. Rather than understanding AI in terms of a terrifying post-apocalyptic vision of a world controlled by robots, AI features in our everyday lives from Alexa and smart home devices to controversial facial recognition technologies and even Uber! AI is built by lines of code called algorithms. Put simply, an algorithm is a step by step method of solving a problem and is commonly used for data processing and calculation. However, the use of automated data processing techniques in public and private sectors, especially by internet platforms and its impact on the exercise of human rights is somewhat of a hot topic.   When it comes to AI, there is a focus on the usage of huge datasets. AI bias means when an algorithm produces results that may be prejudiced due to erroneous assumptions in the machine learning process and the data used to train the algorithm by data scientists. Bias runs deep in humans and it can be unconscious in nature. AI systems are created by individuals who have their own unique experiences and blind spots all of which can lead to fundamentally biased systems. This issue is compounded by the fact that those responsible for AI (including its deployment and training) may not be representative of society. Accordingly, unfair treatment of a group can result from the use of an algorithm to support decision making whether that decision relates to criminal sentencing, loan applications or self-driving cars. The language of AI is undoubtedly complex, but it is drastically changing the way we live. Understanding AI and its implications in the context of its growth is important so that we are all better placed to push companies to develop new technologies both ethically and responsibly.   If you would like to receive more information once the June 2020 programme is finalised, please contact Monique Bertoni at DASLS office – monique@dasls.com .   Emma Mitcham Chair, International Relations Sub-Committee...

06th March 2020 | March 2020

New AML Regulations and the pursuit of the beneficial owner.   Introduction   The new Money Laundering & Terrorist Finance (Amendment) Regulations 2019 which came into force on 10 January have modified a number of aspects of the 2017 AML Regulations, with which we have been complying for some time. However, many firms’ procedures hark back to the earlier days of the 2007 Regulations and have not been modified or updated much over recent years.   This article seeks to set out what the new Regulations in fact require, and the steps we should be taking in relevant cases.   The Policy   It has been true for some time that the ultimate aim of all the regulatory rules is transparency – it has always been the case that the use of artificial structures such as trusts, companies, bearer shares, foundations and charities – whilst perfectly legal – have to some extent also benefitted from the extra anonymity they offer to the true owner and recipient of the funds and services we provide.   If we offer services to these types of entity, the Regulations require us to go some way to identifying the individuals who are actually benefitting from our services, and this entails uncovering the true ownership of the organisation.   Whilst this would be difficult in many instances – Cayman Island companies with bearer shares, for example – we must nevertheless attempt to get some assurances from the creators of the companies, accountants or registrars as to the ownership of the shares, and have some way of being notified of any change in ownership.   We also need to be aware of the PEP and Sanctions status of these individuals.   Further, for UK companies, the PSC Regulations 2016 impose an exactly similar obligation on the companies themselves to identify their beneficial owners and notify Companies House of any shareholder with 25% or more of the shares or exercising control over management of the business.   The Regulations   The Regulations provide that we must, as part of our CDD procedures Identify the client – this means coming to know who they are, by name and some other characteristic, e.g. address, date of birth, date of incorporation Verify that identity – by means of reliable and independent data and documentation Identify the beneficial owner (if the client is an entity) – though not necessarily verifying that identity Identify and verify the identity of the person actually instructing us (if not already done). What this means for us   When acting for a COMPANY (that is not a listed company) the Regulations require us to obtain Details of the company as registered (which must be proven by a copy of the register entries available from Companies House or equivalent registry) – name, number, registered office address, principal place of business the law to which it is subject details of its governing documentation (its memorandum) names of the directors. Names of any beneficial owners, and the identity of any individual owners of legal entities which own the client Names and verification of the persons instructing us on behalf of the company, and their authority to do so. Note that we cannot rely on the information provided by the company under the PSC Regulations but we must undertake our own research in order to fulfil our CDD duties.   Further, if as part of that research, we discover that the Companies House data on PSC’s is incorrect, then we are now under a further obligation to notify the Registrar of Companies of this fact.   We also need to establish that PEPs and Sanctions checks are also undertaken. If genuinely positive entries are revealed in response we should undertake enhanced CDD steps or cease to act, accordingly.   Electronic searches are a permissible avenue to use provided the search provider can offer us the necessary assurances that the person actually claiming an identity is IN FACT that person. Check also whether ...