NOVEMBER 2023 – ARTICLES & ITEMS OF INTEREST

THE LEGAL QUALITY STANDARD OF IRELAND
NOVEMBER 2023 – ARTICLES & ITEMS OF INTEREST
FOURTH LARGEST FINE ISSUED BY THE SRA IN THE UK FOR MONEY LAUNDERING COMPLIANCE FAILURES
It was reported this month on the Law Society of England and Wales website, how a firm was fined more than £100,000 by the Solicitors Regulation Authority, for money laundering compliance failures, reported by the firm itself and despite the regulator stating that there was no suggestion that any money laundering or other financial crime took place.
The article refers to three conveyancing transactions, which were matters for concern, carried out between October 2017 and March 2018. Two of the transactions related to the purchases of properties worth £3.2m and £550,000 on behalf of a limited company. The third transaction related to the purchase of a property worth more than £3m on behalf of a UK registered charity.
In relation to the first transaction, the SRA said customer due diligence revealed conflicting information as to the ultimate beneficial owner and the source of funds was ‘not fully understood or evidenced and had changed during the transaction’. The firm’s compliance raised the issues but there was no written record as to whether they were fully resolved before the transaction was completed.
The client file in the charity transaction showed the firm had previously been instructed to act in the purchase for a different client. The file contained no source of funds information or customer due diligence documentation.
In considering mitigation, the SRA said the firm ‘had procedures and controls in place; however they were not followed in these matters’.
To view this article in full see https://www.lawgazette.co.uk/news/national-firm-hit-with-sras-fourth-largest-fine-over-aml-compliance/5118030.article
PII MARKET AND TIPS FOR RENEWAL
In the November issue of the Law Society Gazette, Sorcha Hayes, Head of Practice Regulation at the Law Society of Ireland, has written an article titled “PII Chart”.
The first part of this article looks at what causes PII premiums to increase or decrease and what leads to a hard market or a soft market.
Premium = Base Rate + Risk
She states that base rates tend to be based on global issues for the insurer, such as their loss ratio across their entire book of business worldwide, increasing claims due to COVID-19 and other high loss events, solvency requirements, and the poor performance of PII markets worldwide. Risk levels depend on the performance of the domestic solicitors’ PII market, minimum terms and conditions, and individual risk factors for each firm, such as claims experience, areas of work, turnover, etc.
Sorcha Hayes also looks at PII under “Capacity v Premium” and “Reductions in Premiums”.
In the final part of the article she outlines “Tips for Renewal”, the following is a synopsis of same:-
1) Finance your premium – use savings or obtain the necessary loan facilities. The Law Society partners with Bank of Ireland on an annual basis to provide a finance facility for members. Some insurers offer the ability to stagger the premium payment over the year, using either monthly or quarterly payments.
2) Make your broker work for their commission – Your broker should be acting as your advocate, advisor and champion in the market, you are the client. A good broker will not redirect you to the Law Society for assistance in obtaining insurance.
3) Do not rely on just one broker – brokers usually have access to only two or three insurers in the market. You should send your common proposal form to all insurers in the market, with the exception of insurers that do not cover your type of firm. The firms that reported the greatest reduction in premiums last year were those that shopped around. As such, if your broker does not have access to the entire market, you should use more than one broker.
4) Apply early – insurers have limited capacity. You should apply as early as possible to ensure that you obtain a quote before the insurers close their books, even if you have been with your insurer for a number of years.
5) Variable renewal dates – variable renewal dates have been available since 2011, and you should discuss with your broker whether they are right for you, with the caveat that you may receive a higher quote outside of the downward pressure of the renewal, and insurers may not be willing to write cover mid-year due to limited capacity.
6) First-party cyber-cover – your PII provides third-party civil liability cover and, as such, it does not provide first party cover for your losses in the event of a cyber-attack. You should discuss the possibility of obtaining separate first-party cyber-cover with your broker, as it should act to protect you from such losses and also give you access to experts to rectify IT gaps and PR issues after a cyber-attack. Such cover also makes your firm much more attractive to insurers, as it is seen as good risk management.
7) Deadline – it is the responsibility of each firm to ensure that it has PII in place before the mandatory renewal date of 1 December 2023. Confirmation of cover must be provided by your broker through the Law Society’s online PII portal within three working days of 1 December 2023 (on or before close of business on 6 December).
To view this article and tips for renewal in full see https://www.lawsociety.ie/globalassets/documents/gazette/gazette-pdfs/gazette-2023/november-2023-gazette.pdf#page=39
ARE YOU USING THE SAFEST BANKING PROCEDURES TO AVOID CYBER ATTACKS?
In the November issue of the Law Society Gazette, Nicola Kiely, Deborah Leonard and Tanya Moeller have written a very informative and useful article titled “Equality of Arms” and they ask and address ‘Are you using the safest banking procedures to avoid cyber-attacks?.’
They state ‘This new online legal world has increased the risk of law firms being exposed to cyber-attacks, with criminals seeking to exploit every possible weakness to access solicitor accounts’. The article discusses ‘Email modification fraud’ and ‘Friday afternoon frauds’.
The article contains numerous case studies including:-
- Case Study: Intercepting emails;
- Case Study: Intercepting cheque requisitions;
- Case Study: Impersonating the client;
- Case Study: Fraud on Clients.
These are all very real and very useful reminders of how cyber-attacks can happen.
The article concludes with a ‘Checklist for Safe Banking’ with detailed advises contained under each of the following headings:-
- Train your staff;
- Client accounts;
- Talk to your client;
- Safe banking habits;
- Two pairs of eyes – double check;
- Safe banking;
- Help your colleagues.
To view this article in full see https://www.lawsociety.ie/globalassets/documents/gazette/gazette-pdfs/gazette-2023/november-2023-gazette.pdf#page=25
DOMESTIC VIOLENCE LEAVE COMMENCED 27 NOVEMBER 2023
On the 27 November 2023 Minister Roderic O’Gorman announced the commencement of domestic violence leave.
Under the Work Life Balance and Miscellaneous Provisions Act 2023, anyone experiencing or at risk of domestic violence will be entitled to take five days leave in order to access supports. They will also be entitled to full pay during the period of leave.
To facilitate implementation of this new leave, Women’s Aid were commissioned to develop supports for employers to implement the leave and have established a dedicated website DVatWork.ie
Minister O’Gorman said “No one experiencing domestic violence should have to risk poverty or unemployment in order to seek support. From today, all employees will be entitled to five days leave on full pay so that they can access the supports they may need. This will make Ireland one of the first countries in the European Union to introduce this right.”
To view this announcement see https://www.gov.ie/en/press-release/e6ecb-new-right-to-domestic-violence-leave-comes-into-force/
For more information on domestic violence leave see https://www.citizensinformation.ie/en/employment/employment-rights-and-conditions/leave-and-holidays/domestic-violence-leave/
WHISTLEBLOWING LEGISLATION – NEW RULES APPLY TO EMPLOYERS WITH BETWEEN 50 & 249 EMPLOYEES FROM 17 DECEMBER 2023
People who raise concerns about possible wrongdoing in the workplace are protected by the Protected Disclosures Act 2014 (‘the 2014 Act’). It was updated by the Protected Disclosures (Amendment) Act 2022 (‘the 2022 Act). The 2022 Act also transposes the EU Whistleblowing Directive into Irish law.
The new protections commenced on 1 January 2023 and the requirement to have internal reporting channels and procedures has only applied to:
- private sector employers with 250 or more employees;
- public sector employers,
- employers which fall within the scope of a wide range of EU directives in areas such as financial services and insurance
For some sectors, there was a lead in period before the new rules on reporting channels and procedures must be in place. Many private sector and charity employers with between 50 and 249 employees had until 17 December 2023 to comply with the new ruIes.
Employers with 50 or more employees should take steps now ensure they are aware of their obligations under the Act and to ensure they are in a position to be compliant on 17 December 2023.
For further information see https://www.citizensinformation.ie/en/employment/enforcement-and-redress/protection-for-whistleblowers/
PHISHING ATTACK ALERT
On the 27 November the Law Society published a ‘Phishing Attack Alert’ which stated:-‘Members of the profession may have received an email purporting to come from Douglas Kelly Solicitors in Swinford, Co Mayo. The Law Society has been notified that a phishing email purporting to have been sent to members of the profession by Douglas Kelly Solicitors in Swinford, Mayo enclosing what appears to be mortgage documentation from AIB.
This is a phishing attack and did not originate in Douglas Kelly Solicitors. The fraudulent email was sent from douglas@kellysols.com rather than the genuine email address – douglas@kellysol.ie. Current contact details can be verified through the Law Directory or Find a Solicitor section of the Law Society website.
Members who have received this email should delete it without delay. If anyone within the office has opened the attachment, they should contact their IT providers immediately.’
To view this Alert see https://www.lawsociety.ie/news/news/Stories/phishing-attack-alert
RISKS FOR EMPLOYERS AHEAD OF THE CHRISTMAS PARTY SEASON
The Irish Legal News published a news story on the 10 November by Seamus McGranaghan, director at O’Reilly Stewart Solicitors, wherein he considers the risks for Northern Ireland employers ahead of Christmas party season.
Seamus McGranaghan states ‘there is a fine line between good humour and bad banter, including if the joke is related to protected characteristics, for example sex, pregnancy, religious belief, age, sexual orientation etc., or if the joke is repeated multiple times. What one employee thinks is workplace banter, another may see as bullying, harassing and discriminative. This creates a grey area due to the banter becoming subjective to the employee who is at the focus of it.
Everyone has the right to work in an inclusive workplace — an environment free from unacceptable behaviours and employers need to ensure employees are aware of the standards expected of them. In order to achieve this, businesses need to have in place comprehensive policies on equality and diversity, anti-harassment and bullying that are reflective of Northern Ireland’s anti-discrimination legislation.’
‘However, as the case law demonstrates, it is not enough to just have policies in place. They must be kept up-to-date and reviewed regularly, with all employees made aware of the policies that are in place and the potential consequences of breaching them. Employers must train managers specifically on how to deal with claims of bullying and harassment and this training should wrap around the employer’s organisation and be integrated into the culture of the workplace.’
So whether this year’s Christmas party is in or out of the office, it should be treated as an extension of the workplace with both employers and employees conducting themselves appropriately.
To read this article in full see https://www.irishlegal.com/articles/seamus-mcgranaghan-must-we-ban-workplace-banter
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