The SRA has powers to supervise and investigate those they regulate. In the first instance, the SRA encourages firms to assess and deal with their own risks.
An investigation may be commenced by an event within the firm, such as a report of misconduct, or financial difficulties resulting in a “self report” or complaint by a client or other party.
The SRA may engage with the firm over the telephone, in correspondence or by visit.
The SRA’s published guidelines entitled “Criteria to determine the focus of an investigation” sets out how the SRA approaches issues of misconduct and rule breaches and deals with some of the issues that arise as a consequence. It is good guide to the SRA’s general approach to enforcement.
Factors likely to lead to investigation by the SRA are:
- intentional, reckless or seriously incompetent conduct;
- abuse of a position of authority or trust;
- other serious misconduct;
- repeated misconduct in the context of the individual’s history;
- criminal convictions or findings of other Regulators;
- failing to comply with regulatory requirements;
- breaches to the Solicitors Accounts Rules;
- conduct outside of practice impacting on the individual’s integrity;
- a matter of direct public interest.
The SRA has statutory powers to require individuals and firms to provide information and co-operate. A failure to cooperate or provide information when requested, may form the basis of discrete allegations to the Solicitors Disciplinary Tribunal (“SDT”).
Responding To The SRA
The SRA give the person the subject of investigation the opportunity to provide an explanation, with a warning that a failure to reply may in itself lead to disciplinary action and that the reply and other information provided may be used by the SRA for regulatory purposes, including as evidence in any investigation, decision or proceedings commenced before the SDT. This letter is referred to as an ‘Explanation with Warnings’ (“EWW”) letter.
This is a crucial part of the investigation and disciplinary process.
An explanation or any other information must be provided within a time period specified by the SRA which is required to be no less than 14 calendar days from the request. If no explanation is offered the SRA may proceed to a decision without it.
It is our strong advice that you should consult with us before responding to the SRA. Failure to do so may have a detrimental impact on the outcome.
The SRA is entitled to withhold the reason for an investigation if it considers that there is a risk disclosure could result in a breach of confidentiality or otherwise prejudice an investigation or other regulatory action.
It is important to note that the investigation is not limited to matters falling within the scope of the explanation.
Notice may be provided to the solicitor of a Forensic Investigation visit by the SRA.
A Forensic Investigation is never random and will be generated as a result of specific concerns.
Whilst there is an obligation on solicitors to deal with the SRA in an open, prompt and co-operative way there may be circumstances in which there is need for proper consideration or advice, such that a solicitor can request, in appropriate circumstances, clarification of requests by seeking them in writing.
The investigation will encompass consideration of the firms accounts, office systems and business arrangements together with client files being reviewed and requests being made for further information and explanation as matters arise.
The investigation will conclude with a final interview. The interview is not under caution, and there is no obligation to give a caution, as the matter is not a criminal investigation. However, the interview will be a summary of all matters identified as causing concern and can be challenging and, on occasion, potentially hostile in terms of the style of questioning.
Admissions that Rules have been broken may be expressly requested.
The interview is ordinarily recorded. Following the interview the investigation officer will prepare a Report which will subsequently be disclosed to the solicitor for comment and explanation.
If you are asked to attend an interview we can help. It is easier for me, as an experienced and objective solicitor to raise concern and/or prevent the investigator from continually asking confrontational or unfair questions. It is often the case that unrepresented solicitors compromise their position during interview if not represented at this stage.
The Report stage
Prior to making a disciplinary decision the SRA will draft a report for disclosure to the solicitor under investigation.
The SRA Disciplinary Procedure Rules 2011 sets out the basic framework within which an investigation will be conducted.
The Report produced and submitted to the person under investigation will set out and summarise the allegations, explain the supporting facts and evidence, and attach any documentary evidence relied upon by the SRA.
The Report may recommend an outcome or a particular cause of action to include;
- no further action;
- imposition of an internal penalty within the SRA powers,
- a referral of proceedings to the Solicitors Disciplinary Tribunal.
I have significant experience in preparing responses to the SRA and it is essential that legal advice be obtained at the earliest possible stage of an investigation.