Solicitors Regulation Authority (SRA) Investigations and Representation before the Solicitors Disciplinary Tribunal (SDT)

Facing an investigation by the SRA can be incredibly daunting and may be compounded by anxiety around what the process will involve and what the consequences might be. Below, we provide answers to commonly asked questions about the SRA’s investigation process and enforcement powers. If you have any additional questions, please contact one of our lawyers who will be happy to assist you.
 

How might the SRA receive a report about me, and what happens if it does?

The SRA receives reports from a variety of sources including self-reports and reports from the public or the profession. A small number of reports are also received from the Legal Ombudsman, where a complaint has been reported to it and which it considers involves potential regulatory concerns. Regardless of how a report arrives at the SRA, it will first be assessed within the SRA’s Assessment and Early Resolution Team, who will initiate a triaging process. This process aims to apply threshold judgements aligned to the SRA’s Enforcement Strategy from when a report is received, with an emphasis on early engagement with either or both of the person who made the report and the person/firm who is the subject of the concerns raised.

The Assessment and Early Resolution Team will apply a three-limb test (the Assessment Threshold Test) to determine whether the report is of sufficient seriousness to warrant further investigation. Decision makers in this team will ask themselves:

1. Has there been a potential breach of the SRA’s standards or requirements based on the allegations made?
2. Is that potential breach sufficiently serious that, if proved, is capable of resulting in the SRA taking regulatory action?
3. Is that breach capable of being evidenced to the required standard of proof?

If the Assessment and Early Resolution Team answers ‘yes’ to all three questions above, it will gather more information and the report may at this stage proceed to investigation.

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How will I know if the SRA decides to commence an investigation?

Once a report proceeds to investigation, having satisfied the Assessment Threshold Test, the matter will be passed to an Investigation Officer. At this stage, the SRA must notify the person to which the allegations relate, of its intention to investigate (rule 2.2 of the SRA Regulatory and Disciplinary Procedures Rules).

Unless the report was a self-report, this might be the first time that you find out that a report has been made about you, and that the SRA is investigating your conduct.  This is, of course, unless you were initially contacted by the SRA’s Assessment and Early Resolution Team as part of its engagement process. During this stage, the SRA may make preliminary enquiries with you and your employer and any other related and relevant individuals.

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What happens once an SRA investigation gets underway?

Once the SRA has investigated and has formed its case, it is likely to correspond with you by means of a ‘rule 2.3 notice’, as required by rule 2.3 of the SRA Regulatory and Disciplinary Procedure Rules. The rule 2.3 notice is a key piece of correspondence in which the SRA will:

• Set out the allegation(s) made against you, and the facts in support;
• Summarise any regulatory history or other history relating to you, or any associated person, which is relevant to the allegation(s);
• Make, where appropriate, a recommendation as to the decision the it intends to make (in accordance with rule 3 of the SRA Regulatory and Disciplinary Procedure Rules);
• Notify you of the approach it will take regarding publication of any decision it makes; and
• Notify you, if applicable, of your liability to pay the costs of the SRA’s investigation.

The rule 2.3 notice will also be accompanied by any evidence or documentation that the SRA considers to be relevant to the allegation(s).

You will usually be given a minimum of 14 days to respond to the rule 2.3 notice, and to the allegation(s) contained within it. Providing a robust response is crucial and it presents an opportunity to present your version of events.

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How should I respond to the SRA?

The early stages of an SRA investigation is the most crucial period when the SRA will form a view as to what has gone wrong and who is responsible.  A pro-active and well-judged response prepared by a solicitor or firm on your behalf can enable the SRA to understand that the matter may be less serious than it first thought. The SRA needs to understand your version of events but have this set out in a way that addresses its concerns. If things have gone wrong it can often help to explain what you are doing to put things right and what you will commit to do to make sure it will not happen again.  It is at this stage that specialist advice can make all the difference. We have seen a number of cases over the years where engagement by solicitors at this stage then avoids a referral to the Solicitors Disciplinary Tribunal (SDT).

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What powers does the SRA have to request material and information from me when I am under investigation?

The SRA has several far-reaching investigative powers given to it by the Solicitors Act 1974, as amended (SA 1974) and the Legal Services Act 2007 (LSA 2007). The LSA 2007 powers relate to alternative business structures (ABS). The SRA has the power, under section 44B of the SA 1974, to require individuals and firms to provide it with information or documents necessary for the purpose of its investigation. If the SRA serves you with a notice under section 44B, it also has the power to compel you to attend an interview to provide an explanation of any information provided or document produced (section 44BA of the SA 1974).

The SRA may also apply to the High Court under section 44BB of the SA 1974, for an Order requiring any other person to provide information or produce documentation. The material requested must be in the possession or custody of, or be under the control of, the person, and the material must be of material significance to the investigation.

When an allegation is being investigated against an ABS, the SRA may require the ABS, or any manager or employee, or non-authorised person who is an interest-holder in the ABS to provide information or produce documents relating to its investigation (section 93 of the LSA 2007).

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What might the SRA decide following its investigation?

The SRA may make several decisions following its investigation. These are set out in rule 3 of the SRA Regulatory and Disciplinary Procedure Rules, and may include the following. The SRA may:

• Give a written rebuke
• Direct the payment of a financial penalty
• Impose a condition on your practising certificate, or if you are a registered foreign lawyer (RFL) impose a condition on your registration
• Revoke or suspend authorisation to practise under the SRA Authorisation of Firms Rules
• If you are a HOLP or HOFA, manager or employee of an ABS, the SRA may disqualify you from your position, if it considers it undesirable for you to remain engaged with your activities

At any stage of the investigation process, after it has served you with a rule 2.3 notice, the SRA may decide to take no further action in respect of an allegation and will close the matter. In this instance, the SRA may issue a letter of advice or a letter containing advice and a warning regarding your future conduct or behaviour (rule 2.4 of the SRA Regulatory and Disciplinary Procedure Rules).

In serious cases, the SRA may make an application to the Solicitors Disciplinary Tribunal (SDT) for the allegation(s) to be referred to the SDT for further consideration. Before it does so, it must be satisfied that there is a realistic prospect of the SDT making an Order in respect of the allegation(s), and it is in the public interest to make that application.

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What is a regulatory settlement agreement (RSA)?

Certain allegations are suitable for conclusion by way of a RSA, in lieu of proceeding to a full hearing before the Solicitors Disciplinary Tribunal (SDT). RSAs are normally only available before the SRA decides to make an application to refer the case to the SDT. You will usually need to accept that there has been a breach of the SRA’s requirements and for that reason, discussions about RSAs are held on a without prejudice basis.

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What is an agreed outcome, and will it be available to me?

If the SRA has made an application to the Solicitors Disciplinary Tribunal (SDT) for the allegation(s) to be considered, it may still be possible to conclude the case without a full hearing before the SDT, by way of an agreed outcome.

An agreed outcome requires you to make admissions as well as to agree the sanction proposed by the SRA. Agreed outcomes require the approval of the SDT; their terms must be realistic as, otherwise, the SDT may refuse to agree them.  This process can, in appropriate cases, give you certainty as to outcome and also reduce overall costs, by avoiding the need for a full SDT hearing.

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What happens once a matter is referred to the Solicitors Disciplinary Tribunal (SDT)?

Once a matter is referred to the SDT, the process will be governed by the SDT’s own rules and procedures. The latest version of the procedural rules can always be found on the SDT’s website. This also includes a useful introductory page about the SDT, its role and how it came to be formed. Navigating the SDT process is not easy and this is another area where we can provide you with specialist advice.

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