SRA Interventions: How to Avoid Them and How to Appeal

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What is an SRA Intervention?

Intervention is the SRA's regulatory weapon to effectively forcibly close a solicitor's practice. The SRA is empowered to act by The Solicitors Act 1974.

Is the firm at risk of an SRA Intervention?

The SRA has wide powers to intervene into firms, for example, if it suspects dishonesty, determines that there has been a breach of its regulatory arrangements, or decides that it is otherwise necessary to protect clients.

Where there is evidence of a systemic risk, or serious unremedied default, intervention will be considered by the SRA. Your response to SRA communications may well determine whether the SRA considers it necessary to intervene.

How Can I Avoid SRA Intervention?

You may be given advance notice that the SRA Adjudication Panel will consider a recommendation to intervene, but equally such notice may not be given. Therefore, in the first place, it's important to bear in mind when communicating with the SRA, that intervention is a possibility.

There are a number of ways of avoiding an intervention. The earlier that you approach us for legal advice, as SRA Intervention specialists, the greater the likelihood of avoiding intervention.  We’ll be able to accurately assess the risk of intervention, and advise on the steps to take, including;

• Addressing the underlying issues;
• Satisfying the SRA that intervention is not necessary; and
• Considering voluntary practice closure/restructure/disposal.

What To Do if the SRA Has Intervened

If the SRA has already intervened, you have 8 days from service of its notice that it has resolved to intervene, to apply to court for an order directing the SRA to withdraw the notice.

Even if there were good merits on the application, unless a stay of execution has been obtained, by the time you are heard in the Chancery Division, the practice will very likely have died.

As a legal challenge is unlikely to be commercial, early advice is key.

Consequences of SRA Intervention

Freezing of Funds: The office and client accounts will already have been frozen before you know of the intervention. The money in those accounts will vest in the SRA. As the office account vests too, it’s important that you have other funds available to meet your ongoing liabilities.

Practising Certificates: Your Practising Certificate will automatically be suspended upon intervention (unless the automatic suspension is revoked by decision making officer). An application is required to lift a suspended Practising Certificate.

Legal Costs: The SRA is entitled to recover its costs upon intervention from those named in the Intervention notice (typically the firm, partners and former partners during the period in which the firm was in default with the SRA's regulatory arrangements) as a debt. The SRA invariably instructs a firm of solicitors to act as its intervention agent. The agent’s costs are then passed on to you. These costs can be significant, in the tens, or even hundreds of thousands of pounds, depending upon the size of the undertaking.

SDT : Your conduct will be referred to the Solicitors Disciplinary Tribunal.

Professional Indemnity Insurance Coverage Investigation: Your professional indemnity insurance provider is likely to conduct its own investigation (as well as look closely at the SRA’s findings) to determine whether it is able to decline cover or otherwise seek reimbursement.

Why choose us?

Our many years of experience representing firms and individual solicitors enables us to accurately assess the risk and give you the best advice on how to avoid it. The SRA intervenes when it feels that it has no other option. We understand how to give the SRA different options.

Sometimes, our involvement in the supervision of the firm can help to convince the SRA not to intervene.

Robert Forman in our team is co-author of The Solicitor's Handbook 2019 and 2022, having written the Law Society's guide to SRA Interventions, providing expert and definitive commentary on law and practice in the field of SRA Interventions and orderly practice closure.

Case Studies:

Case Study 1

Instructed by firms in significant breach of the SRA's regulatory arrangements, we identified the steps required to bring the firm into a state of compliance, created an action plan, and reported to the SRA weekly with progress made, avoiding what would otherwise have resulted in almost certain SRA Intervention.

Case Study 2

We were instructed by a firm notified by the SRA that it was at risk of intervention. Upon making representations to the SRA on behalf of the firm at risk, including detailing Murdochs’ supervision of the firm, the SRA decided not to intervene. Here’s an extract of the SRA’s decision:

‘As you will know, we are focused on protecting clients, former clients, beneficiaries of any trusts and the wider public interest.  We will always take targeted protective steps if there is a risk to money, files or other assets of clients or beneficiaries. Intervention is not a Draconian step but a step we take when there are statutory grounds and it is necessary in the public interest to intervene.  I have considered very carefully your representations, the progress already made in respect of an managed closure and the personal oversight that you intend to have over the remaining aspects of the firm’s closure…I have decided that any potential future risk in this particular matter are sufficiently well managed by your continued hands on involvement such that a referral to the Adjudication Panel is not required at the moment.’

National Recognition

If you want us on your team, e-mail or speak to Andrew Blatt on 07973 752498, Robert Forman on 07976 562236 or Nick Trevette on 07976 795014.