Advising Material Failures
As a CILEx Authorised Entity, you have an ongoing responsibility to inform us of any material failures and/or if you are encountering financial difficulties at the earliest opportunity.
In deciding if a breach or series of breaches are material, you will need to consider the:
- Detriment, or risk of detriment, to clients.
- Extent of any risk of loss of confidence in the entity or in the provision of legal services.
- Scale of the issue.
- Overall impact on the entity, its clients and third parties.
A single breach may be trivial but if it is one of a number of breaches, then it may be material. For this reason, you will need systems to identify patterns of breaches. By keeping records of all failures in compliance, it helps you monitor your obligations and assess the effectiveness of your systems.
Whilst you will be expected to take immediate action to remedy a breach, this does not excuse you from recording the breach and reporting it as necessary.
If you are encountering financial difficulty, reporting this promptly will help us in assisting you manage any action(s) you need to take.
If you have any doubt as to what constitutes a material failure or financial difficulty, then clarification should be sought from CILEx Regulation.