Member Communications: Does it need a legal review?

Trustees issue lots of communications to their beneficiaries. Some are day to day comms, others are a one-off. Some go to the whole membership and others go to one beneficiary. Some are just for information, others require the recipient to take action.

So when trustees are preparing a member communication, we are often asked the question, “Does this need a legal review?”

Now I may be a touch biased – as a lawyer I’m naturally inclined to believe everything can be improved by a carefully honed legal eye – but, even so, in many (if not most) cases my answer is likely to be “it depends”.

A number of factors could influence whether or not, on balance, it makes sense to spare the time and budget to get a particular communication legally reviewed.  So how do trustees decide which communications to get legally reviewed and which to send out without legal input?

Ten reasons to get a member communication legally reviewed

My top ten reasons why you might want to run a draft communication past your lawyers are as follows –

1. To check it accurately reflects how the law applies to your scheme and is consistent with the scheme’s rules
2. To check you’ve complied with relevant statutory disclosure requirements and the trustee’s general duty of disclosure (broadly speaking, to give members the information they reasonably require to be able to exercise their rights and options under the scheme)
3. To make sure you’ve taken account of any relevant guidance and/or statements of best practice
4. To help you avoid straying anywhere near providing financial advice (and generally stay on the right side of FCA/TPR guidance on providing financial information)
5. To make sure you are complying with relevant data protection requirements (especially if you are collecting data or processing it in a new way)
6. If you asking the recipient to make a choice, seeking their consent or asking them to sign a declaration or discharge
7. If the communication is part of a consultation process (to check you’ve met the requirements to start the consultation clock) or a correction exercise (where you are looking to explain what has gone wrong or offer an apology)
8. To check you have included appropriately worded (and positioned) health-warnings, caveats and safeguards to protect the trustee
9. To check any potential tax issues have been properly identified and signposted
10. To minimise the risk of saying something which might make you a hostage to fortune; to gain from other schemes’ experiences; and to reduce the risk of possible complaints/queries. (You got me – this is, arguably, reasons 10-12)

What else might help you decide?

Asking the following sorts of questions can also help you weigh up whether to get legal input –

• What are the stakes? What is the communication about? How many people is it being issued to? What could be the implications (financial or otherwise) of an error? Is it the sort of thing that often leads to complaints? Have you issued similar communications in the past or is this new territory? Is there any specific sensitivity/complexity/context which increases the risks?

• What comfort (if any) are you getting from elsewhere? Who drafted/reviewed the communication? What process have they followed? What is their expertise and familiarity with the scheme and/or the specific matters it relates to? To what extent are they taking responsibility for the communication? Have they specifically recommended you get legal input or caveated their sign-off?

• How much would a legal review cost? The cost of legal input will inevitably depend on the length and complexity of the communication (or communications) and the scope of the review we are asked to complete. So you will need to consider what you actually want us to look at. Are we simply having a high-level look for legal showstoppers or checking compliance with a specific requirement? Are we only reviewing a specific section of the communication, such as a declaration or a health-warning?.

The key to getting the right legal input

Given the range of options, the key to getting the right legal input on your communication at the right time is to have an upfront conversation with your lawyers at the outset.

This will allow you to –

1. Explain the purpose of the communication, how it fits in with your communications strategy and principles and your preferred “look and feel” for the communication,
2. Identify the key risks and discuss the pros and cons of getting legal input on the communication,
3. Agree a scope and budget for the legal review which targets the key risks and is proportionate to the circumstances, and
4. Agree the best timing for getting the legal input – again there are a number of different approaches we could take to best fit in with the drafting process. Would it be helpful for us to confirm the legal requirements or comment on a content framework at the outset? Could we provide legal comments on the text before you begin any art-working?

In other words, the key to getting the right legal input on your member communications is…. communication. 

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