Ethics - Disciplining and Legal Bodies (1) Flashcards
What is the SRA?
The Solicitors Regulation Authority (SRA) regulates solicitors, the bodies in which they operate and all those working within those bodies. As part of its regulatory function, the SRA publishes and enforces rules governing how solicitors behave and conduct their business. The rules are contained in the SRA Standards and Regulations. Those regulated by the SRA must comply
with these Standards and Regulations, and the SRA may exercise its powers to take action against those who fail to do so.
What are the key elements of the SRA?
The SRA Standards and Regulations deal with a variety of regulatory matters. Key
elements are:
- The SRA Principles
These set out the fundamental requirements of ethical behaviour which must be upheld by all those regulated by the SRA. The Principles underpin the Standards and Regulations.
- The SRA Code of Conduct for Solicitors, RELs and RFLs (‘Code of Conduct for Solicitors’)
This sets out the standards of professionalism required from the individuals (solicitors, registered European lawyers and registered foreign lawyers) authorised by the SRA to provide legal services.
The introduction to the Code indicates that such individuals are personally accountable for compliance with the Code. The individual must exercise their own judgment in applying the standards to the situations they are in and deciding on a course of action, taking into account factors such as their roles and responsibilities, areas of practice and nature of their clients.
- The SRA Code of Conduct for Firms
This sets out the standards and business controls expected of firms (including sole practices) authorised by the SRA to provide legal services.
The introduction to the Code indicates that a serious failure to meet its standards may lead to the SRA taking regulatory action against the body itself as an entity, or its managers or compliance officers.
It may also take action against employees working within the body for any breaches for which they are responsible. Many of the rules in the Code of Conduct for Solicitors are replicated in or incorporated into the Code of Conduct for Firms.
The Code of Conduct for Solicitors and the Code of Conduct for Firms are known collectively as the Code of Conduct.
- The SRA Accounts Rules
These detail specific requirements placed on solicitors in financial matters, in particular when dealing with money belonging to clients or third parties. The content of these Rules is beyond the scope of this manual.
- The SRA Glossary
This contains all the defined terms (which appear in italics in the text) from the Codes, Rules and Regulations.
For ease of reference, in this manual the terms ‘solicitor’ and ‘firm’ will be used, although from the above it is clear that the reach of the SRA Standards and Regulations is wider. All references to ‘Principle’ are to the SRA Principles and references to ‘Paragraph’ are to the Code of Conduct for Solicitors unless stated otherwise.
From time to time the SRA issues Guidance to supplement the SRA Standards and Regulations.
The SRA Standards and Regulations are underpinned by the SRA Enforcement Strategy. Not every breach of the rules will result in an investigation being undertaken or sanctions being imposed by the SRA. The SRA’s focus is on behaviour or breaches which it considers to be ‘serious’. The Enforcement Strategy explains how the SRA assesses the seriousness of the conduct and the approach it takes towards the imposing of sanctions (see 10.6).
The SRA is entirely separate from the Law Society. The Law Society is the representative body for solicitors in England and Wales.
How are complaints made about a solicitor?
A complaint may be made about something which happens, or fails to happen, during the conduct of the client’s matter, or arises at the end when the client is dissatisfied
with the outcome.
Dealing with all complaints appropriately is part and parcel of delivering a professional service. The Code of Conduct for Solicitors contains some specific requirements in respect of complaints handling.
A solicitor must either establish and maintain, or participate in, a procedure for handling complaints in relation to the legal services they provide (Paragraph 8.2).
What must a solicitor inform their client with regards to complaints procedure?
A solicitor must ensure (Paragraph 8.3) that clients are informed in writing at the time of engagement about:
(a) their right to complain about the solicitor’s services and charges;
(b) how complaints may be made and to whom; and
(c) any right they have to make a complaint to the Legal Ombudsman (see 1.5) and when they can make such complaint.
Under the SRA Transparency Rules, certain information about complaints procedures must be published on a firm’s website, or be made available on request if the firm has no website (see 3.3.3.4).
Many complaints will be resolved using the firm’s own complaints procedure. In most cases a dissatisfied client should use this procedure first, before taking more formal action.
What must a solicitor do if a client’s internal complaints procedure has not been handled to the client’s satisfaction?
When a client has made a complaint, if this has not been resolved to the client’s satisfaction within eight weeks following the making of a complaint, the solicitor must ensure (Paragraph
8.4) that the client is informed in writing:
(a) of any right they have to complain to the Legal Ombudsman, the timeframe for doing so and full details of how to contact the Legal Ombudsman; and
(b) if a complaint has been brought and the complaints procedure has been exhausted:
(i) that the solicitor cannot settle the complaint;
(ii) the name and website address of an alternative dispute resolution (ADR) approved body which would be competent to deal with the complaint; and
(iii) whether the solicitor agrees to use the scheme operated by that body.
The Chartered Trading Standards Institute has approved a number of ADR entities that will be able to provide ADR services. The obligation placed on the solicitor is to provide information about an ADR- approved body and to indicate whether the solicitor is agreeable to using it, and so the client is not required to submit complaints to the body unless the client wishes to. Clients’ complaints must be dealt with promptly, fairly and free of charge (Paragraph 8.5).
What is the Legal Ombudsman?
The Legal Ombudsman for England and Wales (‘LeO’) deals with complaints made against solicitors, barristers, legal executives, licensed conveyancers, notaries and patent attorneys (amongst others).
The LeO (rather than the SRA) will usually be the first point of contact for a client with a complaint about their solicitor or the legal service they have received. The client does not have to suffer any loss for the LeO to make a determination against the solicitor arising from a complaint about the services provided.
The mere fact that the solicitor has provided services which are not of the quality reasonably to be expected of a solicitor is enough.
Who can complain to the Legal Ombudsman?
The Scheme Rules provide that only certain types of client can complain to the LeO, including individuals, ‘micro- enterprises’ (broadly speaking, an enterprise with fewer than 10 staff and a turnover or balance sheet value not exceeding €2 million), charities, clubs and associations with an annual income net of tax of less than £1 million, and personal representatives or beneficiaries of a person’s estate.
The complaint must relate to an act/ omission by the solicitor and must relate to the services which the solicitor provided.
The LeO also accepts complaints in relation to services which the solicitor offered, provided or refused to provide to the complainant.
When can a complainant use the LeO?
Ordinarily, the complainant cannot use the LeO unless the solicitor’s own complaints procedure has been used, but can do so if:
(a) the complaint has not been resolved to the complainant’s satisfaction within eight weeks of being made to the solicitor; or
(b) the LeO considers that there are exceptional reasons to consider the complaint sooner, or without it having been made first to the solicitor; or
(c) the LeO considers that in- house resolution is not possible due to irretrievable breakdown in the relationship between the solicitor and the complainant.
With effect from April 2023 the complaint should be brought no later than:
- one year from the act/ omission; or
- one year from when the complainant should reasonably have known there was cause for complaint.
However, the LeO has a discretion to extend the time limits to the extent it considers fair.
What is the process of a complaint at the LeO once it has been accepted?
When the LeO accepts a complaint for investigation, it aims to resolve it by whatever means it considers appropriate, including informal resolution.
If the LeO considers that an investigation is necessary, both parties will be given an opportunity to make representations.
A hearing will be held only where the LeO considers that the complaint cannot be determined fairly without one. A ‘determination’ will then be made and sent to the parties and the SRA (as the approved regulator), with a time- limit for response by the complainant.
Once the complainant accepts or rejects the determination (or fails to respond), the solicitor and the SRA will be notified of the outcome.
The details of the procedure are set out in the Scheme Rules.
What enforcement measures does the Legal Ombudsman have?
May direct the solicitor (or their firm) to:
(a) apologise;
(b) pay compensation (together with interest) for any loss suffered and/ or inconvenience/ distress caused;
(c) ensure (and pay for) the putting right of any error or omission;
(d) take (and pay for) any specified action in the interests of the complainant;
(e) pay a specified amount for the costs of the complainant in pursuing the complaint;
(f) limit the solicitor’s fees (including requiring that all or part of any amount paid is refunded, with or without interest, or that all or part of the fees are remitted).
The determination may contain one or more of the above directions. There is a limit of £50,000 on the total value that may be awarded in respect of compensation and the costs in respect of (c) and (d) above. The limit does not apply to (a), (e) or (f) above, or to interest on compensation for loss suffered.
If the complainant accepts the determination, it is binding on the parties and final, and neither party may start or continue any legal proceedings in respect of the subject matter of the complaint.
It may be enforced through the High Court or county court by the complainant, and the report may also be published.
If the complainant rejects the determination, both parties remain free to pursue other legal remedies (such as suing for negligence).
Although the LeO has the power to adjudicate on acts/ omissions as a result of which the complainant has suffered loss, in the event that the LeO considers that the resolution of a particular legal question is necessary in order to resolve a dispute, it may refer that question to the court.
Where the LeO receives a complaint which discloses any alleged professional misconduct on the part of the solicitor, it will inform the SRA.
What are the consequences if a solicitor breaches professional conduct?
‘Professional misconduct’ primarily concerns breaches of the SRA’s Principles and/ or the Codes of Conduct. For example, if a solicitor gave an undertaking to post the client’s witness statement to another solicitor on 1 May and then failed to do so, the solicitor would not have complied with Paragraph 1.3 (the obligation to perform undertakings) and so would be said to breach the requirements of professional conduct.
What is the role of the SRA when it comes to breaches of professional conduct?
Although complaints from the general public are received through the LeO, complaints primarily concerning a breach of professional conduct will go on to be dealt with by the SRA.
Primarily, the role of the SRA is to protect the public. Accordingly, having received an allegation that a solicitor has committed professional misconduct or committed, or is responsible for, a serious breach of any of the SRA’s regulatory obligations, the SRA will decide whether or not to carry out an investigation.
The SRA makes the decision by applying its three step Assessment
Threshold Test: (1) has there been a potential breach of the SRA Standards and Regulations based on the allegations made;
(2) is that potential breach sufficiently serious that, if proved, is capable of regulatory action;
(3) is the breach capable of proof? If the SRA decides to carry out an investigation, it will inform the individual or firm about whom the allegation has been made and their employer (where relevant).
Notice will be given to that individual or firm setting out the allegation and facts in support and other relevant information and inviting them to respond with written recommendations within a specified time period.
In order to investigate complaints of misconduct, the SRA has the power, under s 44B Solicitors Act 1974, to serve a notice on a solicitor requiring the delivery of a file or documents in the possession of the solicitor to the SRA.
Paragraph 7.4 imposes an obligation to respond promptly to the SRA and provide information and documents in response to any such request.
The powers of the SRA following a finding of professional misconduct depend upon the subject of the complaint. The more serious the misconduct, the more severe the sanction.
What enforcement actions may the SRA take?
The SRA’s approach is set out in the SRA Enforcement Strategy (see 1.3 and 10.6). The SRA may impose sanctions (intended to discipline the individual) or controls (intended to protect the public). Examples of action which may be taken by the SRA include:
(a) Take no further action with or without issuing advice or a warning about future conduct
The SRA may decide at any stage that no further action is necessary and, in doing so, may decide to issue advice to the individual against whom the allegation was made or issue a warning to them about their future conduct or behaviour. This may be appropriate to respond to a minor regulatory breach which does not require action to protect the public/ public interest and is not sufficiently serious to require action to restrict the individual’s ability to practise or to rebuke or impose a financial penalty.
(b) Impose a financial penalty or written rebuke
The maximum financial penalty for solicitors is £25,000. The SRA fixed penalty scheme was introduced in May 2023. Under the scheme the penalty is £750 for a first breach and £1,500 for a continuation of that breach or a subsequent breach of the same category within three years.
(c) Control how the solicitor practises
The SRA may impose conditions on, or suspend, a solicitor’s practising certificate, or make an order to control the person’s activities in connection with legal practice. It may also impose conditions on, revoke or suspend the terms and conditions of authorisation of a firm.
(d) Refer the matter to the Solicitors Disciplinary Tribunal
In some cases, the SRA does not make a final decision but refers alleged misconduct to the Solicitors Disciplinary Tribunal, where it is responsible for prosecuting the matter.
Essentially, such a referral will be made where the SRA considers that its own powers are not sufficient to deal with the matter. For example, only the Solicitors Disciplinary Tribunal has the power to take the most severe sanction of striking the solicitor off the roll.
The SRA’s fining powers were increased from £2,000 to £25,000 in July 2022. This now enables the SRA to deal with a broader range of cases itself rather than having to refer them on. In a joint statement with the Solicitors Disciplinary Tribunal issued in January 2023, the SRA said that, in future, referrals are likely to be reserved for the most serious cases of individual professional misconduct and those involving unusual aspects, such as allegations of sexual misconduct, misappropriation of client money or where there is likely to be high public interest.
Any of the decisions set out in (b) to (d) above may be made by agreement between the SRA and the individual in question.
The SRA makes its regulatory decisions public. This allows the general public to search under the name of the solicitor they propose to use, to establish whether the solicitor has been subject to any regulatory sanction.
What is the Solicitors Disciplinary Tribunal?
The Solicitors Disciplinary Tribunal (SDT) hears and determines applications relating to allegations of unbefitting conduct and/ or breaches of the requirements of professional conduct by a number of legal service providers, including solicitors. The vast majority of applications to the SDT are made on behalf of the SRA.
The SRA may make an application when it is satisfied that there is a realistic prospect of the SDT making an order in respect of the allegation and it is in the public interest to make the application.
However, except where the Solicitors Act 1974 expressly provides otherwise, any person may make an application directly to the SDT without first making a complaint to the SRA.
The SDT was established by s 46 Solicitors Act 1974 and is independent of both the Law Society and the SRA. The members of the Disciplinary Tribunal are appointed by the Master of the Rolls.
What procedure is followed by the Solicitors Disciplinary Tribunal?
Section 47 Solicitors Act 1974 gives the SDT power to make such order as in its discretion it thinks fit, including the following:
(a) striking a solicitor off the roll (once struck off the SDT may also restore a solicitor to the roll);
(b) suspending a solicitor from practice or imposing restrictions upon the way in which a solicitor can practise;
(c) imposing an unlimited fine payable to HM Treasury;
(d) reprimanding the solicitor;
(e) requiring the payment by any party of costs or a contribution towards costs.
An appeal from a substantive decision of the Disciplinary Tribunal is made to the Administrative Court.
