Solicitors Regulation Authority investigations

“He has a very impressive forensic ability to go through the evidence, and is obviously a specialist in what he does.” Client feedback for Robert Forman published in Chambers UK 2018

I’ve been contacted by the SRA, what do I do next?

It is essential that you treat any contact by the SRA as a formal investigation. Your communications with the regulator could threaten the viability of your firm, individual careers and have wider consequences.

Understanding the nature of the investigation, and what is required of you is key. Regulatory investigations are nuanced and it is important that you seek specialist legal advice as soon as you can. Even if you are reading this late, it’s always better to seek help late than never.

The SRA’s investigation may take a number of forms, anything from raising queries by e-mail or telephone to sending in an Investigation Officer to conduct a full Forensic Investigation of the firm.

Forensic Investigations

The SRA won’t generally reveal the precise nature of its investigation, or all of the evidence it relies upon. If you have received notice of a Forensic Investigation, this is not a random exercise; the regulator has received information suggesting a serious or systemic issue at the firm.

The Investigation Officer always commences with a short interview. This is your last chance to self-report any issues affecting the firm. We can conduct a dry run, and in most cases address issues before the Investigating Officer arrives.

If you are requested to attend a recorded interview, usually the SRA has already pre-determined that dishonesty, lack of integrity or other serious breach of the rules has occurred.

Dealing with the SRA

You are required to cooperate with the SRA, and it always makes sense to do so. Specialist representation can ensure that the regulator does not exceed its remit, and help conclude the investigation as swiftly as possible.

The manner in which you communicate with your regulator will likely influence the course of the investigation. In many cases, we are able to assist in having investigations concluded with no further action.

If a written report is sent to you, it means that the SRA believes that there is a prima facie disciplinary case against the firm and any number of individuals. Your response to that report, along with all other communications will be treated as evidence upon which you may later be cross-examined.

The SRA has wide powers to sanction you and the firm, or to refer the conduct of you and your firm to the Solicitors Disciplinary Tribunal. Their decision will almost certainly be publicised and there may well be ramifications for the firm, both in terms of publicity and indemnity insurance issues.

Why choose us?

Our strong reputation in the field has been achieved through many years’ experience of representing firms and individual solicitors. Our three-strong team caters for the whole spectrum of the profession, from large city firms through to sole practitioners. We understand why some investigations conclude without further action, and why others don’t.

Case Study 1

We received a telephone call from a firm : the SRA had given notice that they intended to commence a Forensic Investigation within 72 hours. We conducted a dry run, discovered an historic £70,000 book shortfall on client account relating to previous owners. Through our investigations, we were able to demonstrate how previous owners had sought to hide the book shortfall. We prepared a written action plan and delivered it to the SRA at the commencement of the Forensic Investigation. In view of the historic nature of the book shortfall, we were able to provide cogent reasons why a protective payment was not required to be made into client account. In view of the number of years that had passed it proved impossible to prove absolutely that the book shortfall was not real. Nevertheless, the plan demonstrated to the SRA that the firm was capable of self-regulation and which led to the termination of the investigation without further action and without the firm being required to make a protective payment.

Case Study 2

We received instructions from a medium-sized firm having discovered that it was in practice without indemnity insurance, and had been so for in excess of two years. Furthermore, none of the firm’s solicitors had valid Practising Certificates. The issue had arisen as a result of a rogue Practice Manager. Upon advice, the firm was closed immediately. An immediate disposal of the firm’s assets was achieved, with successor practice status, avoiding run-off insurance. We were able to demonstrate to the SRA that the partners had taken reasonable steps, were victims of the rogue manager, and had acted responsibly in taking immediate action to protect clients. Retrospective applications for PCs were accepted. The SRA closed the investigation without disciplinary action being taken.

The lack of insurance meant that the firm became default members of the Assigned Risks Pool. The premium, for membership, calculated by the rules, should have been in excess of £1 million. Upon application for a waiver of the rules we satisfied the SRA that the claims made upon the ARP had almost certainly crystallised and the premium for the three indemnity years was reduced from >£1 million to the sums paid out by the ARP upon claims, that is, around £40,000.

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.