10th January 2018 | January 2018

One of my favourite principles from the current cache we have at our disposal is Principle 8. By way of reminder:   “You must run your business or carry out your role in the business effectively and in accordance with proper governance and sound financial and risk management principles”   I describe it as the management principle. It says it all as far as what managers, and compliance professionals must achieve. It gives us the foundation stone with which to build our compliance structure and it makes everyone a builder of the culture with its catch-all phraseology and inclusivity.   It’s a reminder to all managers/owners of what’s expected of them as the proprietors of the business with its tone from the top message. It delivers the entity regulation message; ‘hey guys, we are all in this together”. It’s an important day one induction message to all people joining the firm.   Principle 8 also provides us with clues about the need for continual contemplation of the nature of the firm’s practice. The key thoughts to reflect on are these: what’s risky about what we do and is what we described as proper governance and risk management in 2011 still relevant in 2017?   Compliance topics are dynamic and a firm which demonstrates a sophisticated response will be constantly revaluating what measures are needed to ensure that a good business environment, in which clients receive a safe legal service, is facilitated. So much has changed since 2011, that I would challenge any firm which has not reviewed its risk assessments and management responses since then. After all, we are currently working with version 19 of the 2011 Handbook, cybercrime is becoming one of the most virulent external threats we are facing, and we are in the spotlight like never before in terms of our response to data protection and anti-money laundering legislation. None of this was the case when the Handbook was launched. No firm should be resting on its corporate laurels.   It is with this in mind, we have this autumn’s (current) main event: the need to respond to the Criminal Finances Act 2017 and tax evasion offences coupled with the SRA’s warning notice about tax avoidance schemes.   SRA outcome (7.5) states that we must comply with all legislation relevant to the business. Given that the Criminal Finances Act includes corporate offences of failing to prevent tax evasion, it’s important to add policies and training to the firm’s risk response. Colleagues must be made aware of the issues so that they can play their part in the safe provision of legal services. More than this, the SRA has issued a warning notice dealing with tax work more generally (http://www.sra.org.uk/sra/news/press/tax-avoidance-warning-notice-2017.page). Warning notices issued by the regulator always come with the following health warning; “Whilst this warning notice does not form part of the SRA Handbook, we may have regard to it when exercising our regulatory function”. In other words, ignore this at your peril and please ensure that you have accommodated the risks we have identified into your internal compliance strategies.   This warning notice has a sting in its tail as it ties in professional duties with the need to be aware that HMRC is changing its approach to tax schemes and arrangements rapidly and will act not only against what is described as abusive tax avoidance schemes but also other tax avoidance arrangements if it deems this appropriate.   This is an interesting challenge for law firms which will need to develop and implement policies both to ensure adequate management and supervision responses and risk mitigation solutions are in place. Where do you start? Here are some thoughts and questions which you may want to ask yourselves:   Do we have information which will help with an understanding of this topic? Luckily the ICAEW and other accountancy and tax bodies have produced guidance which helps with this and is ...

10th January 2018 | January 2018

After reading various articles about the likelihood of compulsory mediation and observing the costs decisions that are made when mediation has not been taken up, what has become apparent is: mediation is something that is often thought about or embarked upon in the process when it is too late.   We, as Mediators have something to learn in persuading other lawyers of the positive benefits of the mediation process. I will try and assist with that below.   Mediation is not about giving up control over the outcome of your case, or compromising your client’s position.  Mediation is about taking control and determining the outcome.   Exploring, without fear, stances or positions that the opponent is taking, and obtaining a better understanding of where they are coming from – all prove to be invaluable if the case does not settle at mediation.     I introduce the idea of mediation at the very outset of most new client appointments.  Firstly, to make them aware of the process available and also to help clients to understand what the Courts expect of them should the matter end up at trial.   Whilst I do understand the need sometimes for expert’s reports to be obtained and evidence to be gathered; sometimes you do not need all of this for mediation to have prospects of success.    Finally, all clients are concerned about costs. The earlier that mediation is considered, the fewer costs they have incurred. What that then means is that it is less likely that costs are going to stop parties from being sensible and attempting to reach a solution when only one of them will be a “winner” if they continue to Court.  So my view is it’s never too early to consider mediation as a real alternative to Court.   I hope I have helped you understand the benefits of mediation. However, if I or any other of your Devon and Somerset Panel of Mediators can assist please do not hesitate to call us.    Kathy Trist Chair Mediation Sub-Committee...

10th January 2018 | January 2018

Over the last ten years technology has advanced massively. It was not so long ago that mobile phones were the size of a brick. Now emails and the internet can be accessed on the move. However, whilst technology has moved on, travelling has become more and more difficult. Homeworking has become the answer for many but how have the tax rules kept up with these changes?   Your status is important   The tax rules differ considerably depending on whether you are self-employed, working as a sole trader or partner, or whether you are an employee, even if that is as an employee of your own company. One way or the other though, if you want to maximise the tax position, it is essential to keep good records. If not, HMRC may seek to rectify the tax position several years down the line. This can lead to unexpected bills, including several years’ worth of tax, interest and penalties.   General rules   Generally, any costs paid on behalf of, or reimbursed to, an employee by their employer will be taxable. The employee will then have to claim the personal tax relief themselves and prove that they incurred those costs ‘wholly, exclusively and necessarily’ in carrying out their job. The word ‘necessarily’ creates a much tighter test than that for the self-employed.   In addition, the way in which the services are provided can sometimes make a substantial difference to that tax cost. For example, if the employer provides something for the employee, the rules are often much more generous than if the employee bought it themselves and attempted to claim the tax relief. A bit of advice and forward planning can often prove to be fruitful.   An exemption   The rules for employees in relation to ‘use of home as office’ contains a specific exemption from a tax charge. They allow payments made by employers to employees for additional household expenses to be tax free, where the employee incurs those costs in carrying out the duties of the employment under homeworking arrangements.   ‘Homeworking arrangements’ means arrangements between the employee and the employer under which the employee regularly performs some or all of the duties of the employment at home. The arrangements do not need to be in writing but it is advisable to do this, as the exemption does not apply where an employee works at home informally.   Where these rules are met, the additional costs of heating and lighting the work area and the metered cost of increased water usage can be met. There might also be increased charges for internet access, home contents insurance or business telephone calls and where working at home leads to a liability for business rates. HMRC accept that the additional cost incurred can also be included. However, unlike the self-employed, HMRC do not accept that a proportion of household fixed costs such as mortgage interest, rent, council tax or water rates are allowable. HMRC accept that a £4 per week payment from the employer is acceptable without too much formality if the above tests are met. However, to justify a higher payment, the message is: prove it!   Tax relief   The above rules only allow tax free payments to be made in specific circumstances. However, if payments are made outside of these rules or, in fact, no payments are made at all, the employee can claim personal tax relief themselves if they can prove that they incurred those costs or received those payments ‘wholly, exclusively and necessarily’ for the purposes of their job. In reality this is extremely difficult – some would say impossible – as HMRC require the following tests to be met:   the employee performs the substantive duties of their job from home (i.e. the central duties of the job) those duties cannot be performed without the use of appropriate facilities no such facilities are available to the employee on the employer’s premises or are too far away and at no time either before or after the employmen...

10th January 2018 | January 2018

Thank you to everyone who responded to the stakeholder survey that I circulated before Christmas in preparation for the DASLS strategic review. Congratulations to Deborah Baker, Toller Beattie who won the prize draw of a case of wine.   The review working party meet in February and so it is not too late to give us feedback about DASLS, what we do and how we do it. The survey is still available for returns (email me for a link) or you may wish to simply drop me a line with any thoughts you have.   Have you ever considered becoming more involved with DASLS? Our Sub-Committees are the lifeblood of what we do and they always welcome new members. They offer a great development opportunity for members to exchange ideas and thoughts about legal practice and get to know others across the region. Generally they meet around 3 or 4 times a year so the commitment is not huge but can be very rewarding. The Sub-Committees are: Contentious Business, Education & Training, In-house, International Relations, Mediation, Non-Contentious Business, Practice Management and Social. If this interests you please speak to me or Monique – 01392 366333.   You may have seen a new name at DASLS in the last month, Beth Adams. Beth has been doing an excellent job standing in as our Team Secretary whilst we seek a permanent recruit. I am pleased to report that we have just made an appointment and all being well they will start towards the end of January.    2018 promises to be as interesting as 2017 with continuing changes to practice, GDPR, artificial intelligence, client expectations and of course Brexit. DASLS will continue to represent you at a regional and national level bolstered by our recently formed County Societies Group. We will keep you up to date with developments as we hear about them through this Newsletter, Buzz and our programme of training events, meetings and conferences.   The next social event will be the Challenge Cup Quiz on Thursday 1st February. Please support this and our other social events – if you would be interested in helping run an event in your area please do get in touch.   Tony Steiner tony@dasls.com  ...

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 ...