SRA investigations: what should you do if you are under investigation?

The Solicitors Regulatory Authority (SRA) has broad investigatory powers in relation to individual solicitors, law firms, and those managing or even working within firms. If breaches of the SRA Principles or Codes of Conduct are proved, there are potentially significant and career-changing penalties, including unlimited fines, conditions, suspension, or striking off the Roll, as well as costs orders. It is therefore important to obtain advice at the outset should you become involved in an SRA investigation, or if you consider that self-referral or referral of a colleague may be necessary.

In the first Keynote of a mini-series, Professional Discipline solicitor Hannah Pilkington looks at the important first steps if you find yourself involved in an SRA investigation. We can help you manage the process strategically in order to protect your position and avoid a risky, costly, and stressful referral to the Solicitors Disciplinary Tribunal.

SRA Principles and Code of Conduct

The SRA publishes Principles as well as Codes of Conduct for individuals and for firms. It is important that you are familiar with the Principles and the Codes, and that you ensure that others you employ, manage, or supervise are also familiar and that you have proper systems in place to meet the necessary standards.

There are SRA Codes of Conduct for individuals and for firms, and they include specific requirements for managers, and those holding Compliance Officer Roles such as Compliance Officer for Legal Practice (COLP) or Compliance Officer for Finance and Administration (COFA). If you take on compliance roles, you must ensure that you are aware of the additional responsibilities which these roles entail.

When will I hear about an SRA investigation?

If the SRA has received a complaint, it will first be considered in a triage process to determine whether it needs to investigate by applying the Assessment Threshold Test. You may therefore not be notified of all complaints which are made about you. The SRA may direct the complainant to the Legal Ombudsman or close it without an investigation.

How will I be notified?

If the SRA decides that it does need to investigate, you may be contacted by an SRA Investigation Officer by email or telephone, or the SRA could arrive at the office for an unannounced Intervention or Forensic Investigation.

SRA investigations can be time-sensitive, and can expand in scope from the original complaint. You are likely to be asked for documents and an explanation of the facts, and may be given specific questions to answer.

What will the SRA ask for?

The SRA may ask you to provide documents either if you are the subject of an investigation, or if the SRA is investigating someone else where you may hold relevant material, for example where they were an opponent solicitor and their conduct in litigation is being investigated.

You may be served with a notice under s44B of the Solicitors Act 1974. Whilst you have a duty to cooperate which extends to providing information or documents in response to a request, the scope of the SRA’s powers under s44B is subject to current debate and High Court review. You should consider seeking advice if you are being asked to provide documents to which privilege may attach.

Who else will be told?

The SRA will usually notify your employer of its investigation into you.

Do I need to attend an SRA interview?

You may be asked to attend a recorded interview with a Forensic Investigation Officer (FIO) or other SRA Officer. It is important that you obtain advice as early as possible in the process. You do have a duty to cooperate with the SRA in accordance with Code of Conduct paragraphs 7.3 to 7.5.

Failure to cooperate can lead to additional allegations arising from your conduct during an investigation as well as an increase in any costs claimed if a case proceeds. You are entitled to be represented during your interview, and we would strongly recommend this as well as assistance in preparing for this beforehand.

What if the SRA wants to come to the office?

Most SRA investigations are desk-based, with an Investigating Officer asking for and considering documents and making a recommendation. However, in some cases, they will decide that they need to visit your office to undertake an on-site investigation, particularly in serious or complex cases, if there are concerns about misuse of client funds, money laundering or fraud, or where there are a very large amount of documents that they need to consider.

The SRA may or may not give you notice of arriving. It will give you an indication of the nature of the concerns before beginning the inspection.

If a forensic investigation is commenced by the SRA, an investigation will be conducted by a FIO who will prepare a Forensic Investigation Report (FIR). The investigation could include an on-site inspection of documents at your offices and interviews with you and colleagues. Your responses at interviews are likely to be relied on by the SRA, and transcripts often form part of the FIR. Representation at interviews will be important to ensure that the SRA has a proper understanding of the factual position, considers all of the relevant issues, and in protecting your position. You should call to obtain specialist advice if your office is attended by the SRA.

What does the SRA do next?

Even where the SRA has opened an investigation and may have made a finding of a breach, it will not necessarily impose a sanction. It may decide to close the investigation with advice or a warning.

A warning is given to make a regulated person aware that they came close to a disciplinary sanction or control order and where the SRA is likely to take action if the breach continues or is repeated.

If the SRA has serious concerns following its investigation, the Investigation Officer will draft a formal Notice with allegations. This will set out the factual background, allegations and the way in which the alleged conduct is said to breach the Principles or relevant Code of Conduct. It may rely upon documents and any Forensic Investigation Report. A recommendation is usually also included as to the outcome (i.e. an internal fine, or referral to the Tribunal).

The Notice will be sent to you with a deadline for a formal response. You should treat this as urgent, and crucial, obtaining advice before you give any response.

Should I respond to the Notice?

Your response will be a crucial document and will be considered when deciding on the next steps, including whether the allegations can be proved, whether there should be an internal sanction imposed, whether a referral to the Solicitors Disciplinary Tribunal (SDT) is justified, or whether further investigation is needed. Your response is likely to be seen by the Tribunal if your case is referred.

It is strongly recommended that you obtain legal advice and assistance in preparing representations. These may address flaws in the SRA’s reasoning, apply the relevant legal tests, address the allegations, and can set out mitigation and context such as improvements in systems and policies.

If there is a prospect of an internal sanction, such as a fine, and avoiding a referral to the Solicitors Disciplinary Tribunal, we can assist in addressing this and setting out relevant financial information.

What can I do to help my position?

You should take the concerns raised very seriously, and consider the SRA’s analysis, evidence, and allegations carefully.

Even if the allegations can and should be denied, it is always helpful to show the SRA that you have carefully reflected, learnt from the concerns, and improved your practice or systems where possible.

It is important to reflect carefully, and show insight into areas where you accept that things should have been managed differently. We can consider with you collating evidence of insight and remediation, as well as evidence of your broader good character if this is an isolated incident.

Keep records of changes and improvements to policies, training, and systems.

If you have questions or concerns about an SRA investigation, please contact Hannah Pilkington.