According to a panel of senior in-house lawyers at a NSW Law Society event last night one of the biggest issues facing the profession is dealing with regulators, and the way in which an organisation deals with regulators. Coralie Kenny, an in-house lawyer with more than 15 years experience, and moderator of the panel said this was particularly true for large organisations. “When they deal with a regulator they’ll have a specific group – so there’s a regulatory affairs area as opposed to it necessarily [going through] the lawyers. How do we keep in check these ‘eager beavers’ keen to appease the regulators? As we know our role is to ensure regulators don’t overstep their authority,” she said. She also highlighted the dangers around agreeing to have regulators meet with a ‘regulatory affairs’ group without having lawyers present. “It's like ‘never smile at a crocodile’ and the regulators are the crocodile,” she said.
Hugh Loughrey, who was one of the four panellist at the event, added that another dilemma for in-house counsels was the high level access regulators expected within an organisation. “Regulators expect to come in and see board and committee papers, I’ve had instances where they’ve asked for legal advice, they want to attend meetings to get a sense of what’s going on and get all these reviews and to get reports from boards that are prepared for internal use predominantly. It’s very pervasive and people don’t know how to respond,” he said.
“Underlying the risk or compliance relationship and the in-house team you have tension and that can be to the detriment of the organisation.” O’Shannassy made the point, to widespread agreement from the panel, that the policy around how the organisation deals with regulators should be addressed at a senior management level. “You need one of these documents plastered all around the organisation,” he said. “This is what to do when the regulator comes through.”
Kenny also lamented the ‘hands off’ approach to regulators’ visits, and noted that the Australian Tax Office (ATO) seems to be treated differently to the other regulators. “They actually have a much better understanding of what they should be doing than if it’s an Australian Securities and Investment Commission or the Australian Prudential Regulatory Authority or the Australian Competition and Consumer Commission,” she said. “For some reason because it’s the tax office people just assume that they’re going to be treated harshly and they shouldn’t be cooperating unless they’ve got their notices of authority.”