What’s in this update?
- Equality Act shake-up: Supreme Court ruling on biological sex and workplace policies
- New reporting rules: Disability and ethnicity pay gap reporting on the way
- SRA diversity survey: Free Omnitrack now live for all law firms
- Bribery, fraud and sanctions: New SFO case and LSAG guidance updates
- Employment law reforms: Major changes to H&S and harassment rules
- Upcoming webinars: DEI, AI, cyber, DSE and more
What’s big in compliance this month?
The SRA diversity survey is coming this summer! All law firms in England & Wales are required to survey their staff, publish and share the data with the SRA every two years. As in previous years, law firms can use Omnitrack for free to collect and report the data. Sign up is available now. We’re also hosting a LinkedIn Live session on Thursday, 15 May at midday UK time for a live demo.
The UK Supreme Court’s ruling in For Women Scotland has defined ‘sex’ in the Equality Act as biological sex. The EHRC (the regulator and enforcer of the Equality Act) have issued an interim update and employers must now ensure that workplace facilities, like toilets, comply or risk discrimination claims. We’re hosting a LinkedIn Live session on Thursday, 8 May at midday UK time for a live Q&A.
UK regulatory update
A new ‘failure to prevent bribery’ corporate prosecution has been announced by the Serious Fraud Office (SFO). One of the few cases of failing to have ‘adequate procedures’ to go to court. If it goes to trial, it will be a fascinating exploration of how ‘adequate procedures’ works in practice. Gifts and hospitality registers, along with regular training, are important procedures.
The SFO have issued new guidance on how companies involved in corporate wrongdoing can avoid prosecution. Only prompt self-reporting AND full cooperation will result in an invitation to negotiate a Deferred Prosecution Agreement (DPA), where a company pays a fine and is on probation.
The Government is consulting on expanding gender pay gap reporting requirements for large companies to include disability and ethnicity reporting. Likely to be introduced to parliament later this year. We’re exploring a freemium Omnitrack solution.
The forthcoming Employment Rights Bill is going to upgrade the Worker Protection Act to drastically enhance the sexual harassment procedures all employers will need to implement. Here’s a breakdown of the changes. Likely required from 2026.
A risk-based approach to sanctions compliance is becoming a necessity, underscored by recent OFSI enforcement actions. All companies, but particularly law firms, should have a sanctions risk assessment, and implement training and policies to mitigate those risks.
While not part of the UK, the Isle of Man (an ‘offshore’ location) is preparing a significant update to its financial crime laws, including specific statutory offenses of bribery, corruption and sanctions breaches. Some VinciWorks offshore clients may be based in the Isle of Man.
The Employment Rights Bill is making a wide array of changes to compliance, and in particular health and safety From banning zero hours contracts to tracking holiday pay, here are ten things that H&S managers should know about the Employment Rights Bill.
The UK’s new Cyber Security and Resilience Bill is coming, and the government’s recent statement outlines the ways companies should be addressing these risks.
Currently, any senior manager who has been involved in financial crime like fraud, tax evasion, money laundering, tax evasion, false accounting or bribery can not only face penalties for themselves, but their companies could end up in court as well. The forthcoming Crime and Policing Bill would extend that to ANY criminal offence, and makes the risk of a senior manager breach affecting a company much more significant.
EU regulatory update
DAC8 becomes operational on 1 January 2026. This adds crypto transactions to existing DAC6 compliance rules on cross-border transactions.
US regulatory update
US tariffs continue to wreak havoc on the global economy. But things aren’t only more expensive, there’s a compliance risk of trade wars too. From international fights over DEI at law firms to the risk of political retaliation over company policies or even clients, business is getting riskier.
The FBI have identified Hong Kong as the top destination for fraudulent wire transfers resulting from cyber attacks.
The legal market
LSAG (Legal Sector Affinity Group) have issued an update to statutory guidance including handling third party source of funds, more focus on high risk jurisdictions, and requirements for overseas entities to register with Companies House.
The OFSI (UK sanctions regulator) has highlighted the risk to law firms of sanctions breaches. Law firms are underreporting, mishandling frozen assets and failing to secure licences. Sanctions compliance remains a major risk for law firms. The SRA is writing to all law firms in the coming months about their sanctions risk assessments and conducting spot checks on some too.
Another important lesson on sanctions compliance for law firmsfollowing the £456,000 OFSI penalty against large law firm Herbert Smith Freehills for processing £4m worth of payments to sanctioned entities.
A detailed case studyon how HSBC ignored AML red flags when it came to a client who was supposedly trustworthy, but ended up with corrupt cash coming from Lebanon into HSBC accounts.
A data breach at a law firm showed a stunning ignorance of data protection rules. The firm failed to implement multi factor authentication and didn’t report the breach for 43 days, instead of the 72 hours as required. Fined £60,000 by the ICO.
A Yorkshire law firm specialising in conveyancing (real estate) were fined £36,000by the SRA for failing to carry out client and matter risk assessments after a review of eight files found no compliant risk assessment.
Law firms also face risks from global trade instability, particularly around sanctions compliance. The OTSI has issued guidance on its enforcement powers and the legal sector in particular should be aware of the risks.
Did you know?
Evading tariffs is akin to evading taxes. Companies that seek to reduce their tariff burden could find themselves at the wrong end of a tax evasion investigation.
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