For solicitors and law firms, deciding whether an issue needs to be reported to the Solicitors Regulation Authority (SRA) can be more difficult than it first appears.
The regulatory framework requires certain matters to be reported, but determining whether the relevant threshold has been crossed can involve considerable judgement. This becomes particularly important where allegations are still being investigated internally, disciplinary proceedings are underway, or the facts remain disputed.
Getting the timing wrong can create additional regulatory risk. Firms and individuals therefore need to consider not only whether to self-report to the SRA, but when and how to do so.
What are the SRA self-reporting requirements?
The SRA Standards and Regulations impose reporting and notification obligations on regulated individuals and firms. Obligations are set out in the Codes of Conduct, and are part of the overarching duties of co-operation and accountability to the SRA.
Over and above the requirements to report a charge, conviction, or caution, and a relevant insolvency event, there is a requirement to report potentially serious breaches of regulatory arrangements.
Broadly, this includes circumstances where there are facts or matters which could amount to a serious breach of regulatory arrangements and matters which the SRA would reasonably expect to be brought to its attention so that it can investigate whether a serious breach has occurred or otherwise exercise its regulatory powers.
The difficulty lies in assessing seriousness. The SRA Enforcement Strategy makes clear that, “We do not want to receive reports or allegations that are without merit, frivolous or of breaches that are minor or technical in nature – that is not in anyone’s interest.” And, “… indeed we want to encourage firms to resolve and remedy issues locally where they can”.
Not every mistake, complaint, employment dispute, or allegation requires a regulatory report. Context matters, including the nature of the conduct, its impact, whether there is evidence of dishonesty or integrity concerns, whether clients have been affected, and what remedial action has been taken.
As a result, two superficially similar incidents can produce very different reporting conclusions.
Reports are also to be made “promptly” so that judgments often have to be made fairly quickly, and under pressured circumstances.
Should you wait for an internal investigation before reporting to the SRA?
This is often one of the most difficult questions. An allegation may initially be unclear and require an internal investigation to establish what happened. Firms will understandably want sufficient information to make a properly informed regulatory assessment.
However, an internal or disciplinary investigation does not suspend regulatory reporting obligations.
Waiting until every factual issue has been resolved may create its own risk if the SRA subsequently concludes that the matter should have been reported earlier. Conversely, making a premature report based on an untested allegation can have significant consequences for both the firm and the individuals concerned.
There is therefore an important overlap between internal investigations, disciplinary processes, and SRA self-reporting.
The key is to keep the reporting position under active review as evidence emerges rather than treating it as a decision that only needs to be made at the conclusion of an investigation.
It is also worth bearing in mind that the obligation to notify, or provide information to, the SRA will be satisfied if you provide information to your firm’s COLP or COFA, as and where appropriate, on the understanding that they will do so. It is therefore helpful to be very clear, if you have relevant information, as to who is making any referral.
Why the decision to report requires careful judgement
Reporting is not simply an administrative exercise. Before making a report, firms and individuals should consider:
- which regulatory obligation may have been engaged;
- the seriousness of the alleged conduct;
- the quality and reliability of the evidence available;
- whether an internal investigation is necessary or already underway;
- whether clients or third parties have suffered, or could suffer, harm;
- what steps have been taken to contain or remediate the issue;
- whether other regulatory or notification obligations may apply; and
- how the report should explain issues which remain unresolved.
It is equally important to document the reasoning behind the decision. A clear contemporaneous record can demonstrate that the reporting question was identified, considered against the applicable regulatory framework, and kept under review.
What about CILEX-regulated professionals?
Similar considerations can arise for professionals regulated under the CILEX framework. The precise obligations and applicable regulatory rules differ, meaning that practitioners and businesses should identify which regulator has jurisdiction and which reporting requirements apply rather than assuming that the SRA position can simply be replicated.
This is particularly important for organisations employing professionals subject to different regulatory regimes, or regulated by more than one regulator.
Getting the timing and strategy right
A potential regulatory issue can develop quickly. What begins as an employment complaint, client concern, or relatively narrow internal investigation may reveal evidence that changes the analysis.
Early strategic advice can help firms and individuals determine the appropriate course of action while protecting the integrity of any ongoing investigation.
Where a report is required, careful preparation can also ensure the regulator receives a clear and balanced account of the known facts, the status of any investigation, and the steps being taken in response.
The fundamental question is therefore not simply: “Do I need to report this?” It is also: “What do we know, what remains uncertain, when does the reporting threshold arise, and how should we communicate the position to the regulator?”
Addressing those questions early can help solicitors, firms, and other regulated legal professionals manage regulatory risk while responding proportionately to the underlying issue.
If you are unsure whether or when to self-report or report an issue to the SRA, please contact Professional Discipline lawyer Hannah Pilkington for advice on your reporting obligations and how best to manage the process.
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