StaRs: Reporting concerns - understanding your obligations
You must exercise your judgement in applying these standards to the situations you are in and deciding on a course of action, bearing in mind your role and responsibilities, areas of practice and the nature of your clients."
The underlying tenet is therefore very much weighted towards individual practitioners properly considering their role, the particular issue they are dealing with, what their responsibilities are in a particular situation, their expertise and the nature of the client they are advising – ultimately, this is exercising judgement.
The StaRs make very clear that when practising, one size, does not fit all.
In terms of accountability, the introduction goes on to state:
You are personally accountable for compliance with this Code – and our other regulatory requirements that apply to you – and must always be prepared to justify your decisions and actions."
Expanding on the point of personal accountability, the Individual Code goes further, and at paragraph 3.5, emphasises that where supervising others in the provision of legal services, practitioners remain accountable for any work conducted on their behalf. As such, it is not sufficient that work is handed over without adequate and appropriate supervision. Practitioners remain accountable and must continue to exercise their professional judgement as to whether the individual to whom they have delegated work is sufficiently experienced and able to complete the task(s) at hand, especially in circumstances where instructions change as the matter develops.
The Code for Firms further emphasises the breadth of accountability for a firm and its staff. Whilst noting that any serious failure to meet the standards or serious breach(es) may lead to regulatory action being taken against the firm, its managers or compliance officers, the code also notes:
We may also take action against employees working within the firm for any breaches for which they are responsible."
The themes of accountability and exercising judgement are underpinned by the Solicitors Regulation Authority (SRA) Enforcement Strategy, pre-emptively launched in February 2019 to lay the regulatory groundwork for the imposition of the StaRs.
This strategy emphasises the accountability of individuals and confirms that action will be taken against individuals where they are held directly culpable for serious breaches. Rather than being unnecessarily punitive, this approach is deemed necessary to prevent any individual avoiding their obligation to be accountable for their actions by simply relocating to a new firm or folding an existing firm and starting afresh. As articulated by Lord Bingham in Bolton –v- Law Society  EWCA Civ 32: ‘One is to be sure that the offender does not have the opportunity to repeat the offence.’
However, the Enforcement Strategy also demonstrates that the need to be accountable is a two-way street. The Strategy itself recognises that the SRA needs to be accountable for its actions and to demonstrate that they act fairly and proportionately when taking regulatory action.
Quite poignantly, there is extensive guidance published alongside the Strategy to support SRA staff in when making their regulatory decisions. Detailed topic guides have been prepared to assist staff when considering potential breaches in areas including competence and standards of service, compliance with SRA transparency rules and the use of social media and offensive communications. In addition to these topic specific guides, the SRA has published detailed decision making guidance for every stage of the regulatory process, from deciding to bring an investigation through to commencing disciplinary proceedings and bringing enforcement action. Such guidance is vital to ensure consistency and quality of decision making throughout a regulatory body, and gives individuals and firms a basis for holding the SRA accountable for its decision making processes.
Whilst it is a revised approach for us all, by familiarising ourselves with these processes, individuals and firms can get to grips with what is expected, and ensure that compliance cannot be questioned.
By highlighting the need for individuals to ‘always be prepared to justify their actions and decisions’, the SRA may well be offering some clues as to how one might best mitigate the risks of facing regulatory action. For our part, the key message is record-keeping.
Paragraph 7.2 of the Individual Code spells this out and emphasises the need to be ‘able to justify your decisions in order to demonstrate compliance with your obligations under the SRA’s regulatory arrangements.’
Records kept of decision making will of course provide documentary evidence of adherence to the standards, which in turn supports the messaging in the Enforcement Strategy in relation to accountability.
The Enforcement Strategy states that the seriousness of a breach may be dependent on the intention behind it, e.g. whether or not there is intention. When assessing the exercise of one’s judgement, it will be essential for the SRA to get inside the mind of the decision maker to allow them to distinguish between honest mistakes and those which are less excusable, and this is where record-keeping will prove invaluable. Whilst one may ultimately come to the wrong decision, being able to demonstrate how you reached that decision will provide some security.
The take away points – exercise your judgement independently, be prepared to be held accountable for the way in which you exercise your judgement and ensure you document your working out.
This blog was co-authored with Charlie Roe, a Trainee Solicitor in the Regulatory team.
The SRA will be launching its new set of Standards and Regulations (“StaRs”) on 25 November 2019. See our full blog series in which we share our insight into some of the more interesting aspects of the StaRs, including looking at the more subtle changes, in relation to underlying policy and overall regulatory approach.
If you have any questions, please contact a member of our regulatory team.
Shannett Thompson is a Senior Associate in the Regulatory team. She has substantial experience in advising individuals in relation to their regulatory obligations in the wider context. She is adept at advising and assisting individuals in respect of registration/licensing applications.
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