Annual Report 2015/16
Message from the new Chair – Caroline Corby
I am proud to be leading an organisation that has a strong track record for delivering proportionate regulation. Equally the wider public can have confidence in the regulatory framework we have set up.
We set quality thresholds. It is not the business of regulators to limit competition for the public. It is our business to enable the public to make informed decisions on their choice of whether to appoint a regulated or non-regulated advisor. We are not trying to protect the profession but want consumers to be aware when making their decisions.
We are here to help people to understand the differences between regulated and unregulated services and what it means for them in terms of protection but we don’t limit the competition or tell them which organisations to use. Businesses should understand that regulated IP attorneys operate in a regulated environment. This gives confidence that there are appropriate safeguards, complaints procedures and that there are high standards so that businesses can be comfortable in using the services.
We want to continue to focus on being a badge of quality and a kite mark for consumers.
I bring a lot of experience to this post as it is not my first statutory regulatory role. I have a good idea of what is expected of a regulator from being chair of the Investigation Committee for the General Optical Council and chairing Interim Order hearings for the Nursing and Midwifery Council.
Chief Executive’s Report
2015 was a year of transition.
It was the last full year for Michael Heap as our Chair. Michael set up IPReg as a shadow board in 2008/9. I joined in November 2009 and we have worked together since then. The IPReg Board and staff will miss him. On 1 May we appointed Caroline Corby. We have been arranging many “meets and greets” to enable Caroline fully to understand the significant contribution of UK patent and trade mark attorneys and their clients to the UK economy.
Transition too – to a newly appointed Licencing Authority.
And perhaps more transition and change? We await the publication of the MOJ consultation on the Legal Services Act 2007 and the CMA have just published its interim report on the legal landscape.
IPReg was pleased to announce that it appointed its first Assurance Officer in September 2015 to support its risk assessment and supervisory functions, including providing assistance to firms in understanding their new obligations under the Legal Services Act 2007 (LSA) and in implementing the necessary internal procedures.
IPReg has always had an outcomes-focused approach to regulation (OFR). This is a regulatory regime that focuses on the high-level principles and outcomes that should form the operational foundation for regulated firms in their provision of services to clients.
This principles-based approach underpins IPReg’s Code of Conduct and avoids the setting of detailed or prescriptive rules whenever possible. IPReg adopts this OFR approach in relation to risk assessment, assurance and (where necessary) supervision.
Registrants that have any issues with their practice that are causing concern may now seek guidance or advice from our dedicated Assurance Officer.
Client monies guidance
The new obligations under the LSA include the introduction for all firms (whether registered or licensed) of new regulations for the formal separation of client monies from office monies. At the end of September 2015, IPReg issued guidance on client monies to the Heads of Finance and Administration of licensed bodies, the IPReg Pro administrators of registered bodies and sole practitioners.
CIPA and ITMA were given the opportunity to input into the guidance and it was issued with their support. The guidance has also been published on the IPReg website.
We have received minimal enquiries from firms on the subject of client monies. We continue to draw the guidance to the attention of newly registered and transitioned firms, and repeat our offer of assistance.
Alternative Business Structures (ABS)
As at 30 June 2016 IPReg has licensed 29 firms that have transitioned from registered body status since becoming a Licensing Authority for Alternative Business Structures (ABS) on 1 January 2015. We now also regulate 7 licensed firms of varying sizes that are new to regulation by IPReg.
The Legal Services Board (LSB) stated in its Regulatory Standards Report 2015/16 that IPReg had “performed well” in transitioning registered bodies with external ownership to licensed ABS status. The report further stated:
“Its work to achieve designation as a licensing authority has led it to undertaking a significant programme of work. This has moved IPReg towards being an outcomes-focused regulator with a clear assurance policy to inform its risk assessment and supervisory functions. It also has enforcement policies and processes in place, which follow best practice.”
IPReg has always been open-minded in its approach to the regulation of corporate structures with external management or ownership. We are seeing a positive message from the IP world as well as the wider legal profession that ABS structures facilitate innovation through increased access to funding and the ability to share profits with innovators. A recent study commissioned by the LSB and the Solicitors’ Regulation Authority found that ABS organisations have higher levels of innovative activity than others – this is consistent with their findings that ABS have a higher level of investment and staff engagement.
We continue to welcome licensing applications from firms who wish to take advantage of the greater degree of external ownership and management that is available to them via ABS under the LSA.
We have published a comparison between our 2015 Budget and our actual spend on our Financials page but here is a pictorial guide to the split of costs. The red slice represents the levy to the LSB and the Legal Ombudsman.
The admission for both individuals and entities are shown below.
|Applications for Admission to the Patent Register||106||89||82||78||96||89|
|Applications for Admission to the Trade Mark Register||44||54||56||72||51||26|
|Applications by Entities||20||32||26||22||24||4|
“First tier” complaints data:
|Type of complaint (as declared by entities at 7th June 2016)||Number|
|Failure to follow instructions||7|
|Failure to advise or poor/wrong advice||17|
|Failure to keep informed/failure to reply||13|
|Failure to comply with agreed action/remedy||1|
|Delay/failure to progress||22|
|Failure to keep papers safe||0|
|Cost information deficient/costs excessive||84|
|Failure to release/file papers||0|
The Legal Ombudsman confirm that they have not received any complaints in the period April 2015 to March 2016.
IPReg, together with other legal regulators, has lobbied the MoJ to consider the simplification of schedules 11 and 13 of the LSA to relax the rules surrounding the licensing of ABS. We had anticipated that the MoJ consultation on this topic would have been published at this stage; however, we understand that the Brexit outcome has delayed this and we await details of the consultation.
 Study carried out by the Enterprise Research Centre at Warwick Business School. The study surveyed 1,500 organisations delivering legal services in England & Wales. Summary report published July 2015.