Key issues:
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SRA reporting requirements under the Handbook are extensive and underpin the principle that ongoing dialogue and communication with the SRA is expected.•
This means that in‑house lawyers practising in England and Wales will not only have to engage with the SRA when subject to an investigation, but may also independently have to approach the SRA with information.•
Reporting requirements are set out in Chapter 10, Code of Conduct and the Practising Regulations 2011 (“Practising Regulations”).8.1 Chapter 10 (You and your regulator), Code of Conduct requires you to:
− ensure that you comply with all the reporting and notification requirements in the Handbook that apply to you (Outcome 10.1);
− provide the SRA with information to enable the SRA to decide upon any application you make, such as for a practising certificate (Outcome 10.2);
− notify the SRA promptly of any material changes to relevant information about you including serious financial difficulty, action taken against you by another regulator and serious failure to comply with or achieve the Principles, rules, Outcomes and other requirements of the Handbook (Outcome 10.3);
− report promptly to the SRA serious misconduct by any person or firm authorised by the SRA, or any employee, manager or owner of any such firm (taking into account, where necessary, your duty of confidentiality to your client) (Outcome 10.4). This could require you to report your own misconduct;
− ensure that the SRA is in a position to assess whether any persons requiring prior approval are fit and proper at the point of approval and remain so (Outcome 10.5).
Again, this includes you;
− co‑operate fully with the SRA and the Legal Ombudsman at all times including in relation to any investigation about a claim for redress against you (Outcome 10.6);
− not attempt to prevent anyone from providing information to the SRA or the Legal Ombudsman (Outcome 10.7);
− comply promptly with any written notice from the SRA (Outcome 10.8);
− pursuant to a notice under Outcome 10.8:
− produce for inspection by the SRA documents held by you, or held under your control;
− provide all information and explanations requested; and
− comply with all requests from the SRA as to the form in which you produce any documents you hold electronically and for photocopies of any documents to take away in connection with your practice or in connection with
any trust of which you are a trustee (Outcome 10.9);
− provide any necessary permission to enable the SRA to:
− prepare a report on any documents produced; and
− seek verification from clients, staff and the financial institutions used by you (Outcome 10.10);
and
− when required by the SRA in relation to a matter specified by the SRA, you:
− act promptly to investigate whether any person may have a claim for redress against you;
− provide the SRA with a report on the outcome of such an investigation, identifying persons who may have such a claim;
− notify persons that they may have a right of redress against you, providing them with information as to the nature of the possible claim; and
− ensure where you have identified a person who may have a claim for redress that the matter is dealt with under the firm’s complaints procedure as if that person had made a complaint (Outcome 10.11).
8.2 Guidance note 2 suggests that the Outcomes in Chapter 10 should be considered in conjunction with Chapter 7 (Management of your business).
When considering what “systems and controls”
to put in place, it is worth remembering that sharing information with the SRA may have implications for your client/employer, and so those with management responsibilities within the in‑house department may wish to consider how best to support in‑house lawyers who need to comply with these enhanced reporting obligations.
8.3 Regulation 15, Practising Regulations requires all solicitors who hold a current practising certificate to inform the SRA within seven days if they:
− are committed to prison;
− are convicted of an indictable offence;
− have been made subject to bankruptcy proceedings;
− make proposals for an individual voluntary arrangement;
− are admitted as a member of a legal profession in another jurisdiction or as a lawyer of England and Wales other than as a solicitor or are subject to disciplinary proceedings as a member of either; or
− have changed their name as shown on their practising certificate.
8.4 Any in‑house solicitor who wishes to renew his or her practising certificate must also ensure that they have informed the SRA if any of the events listed in Regulation 3, Practising Regulations (and summarised in Appendix 8, Regulation 3, Practising Regulations 2011) applies to them.
PRACTICAL EXAMPLE
You return home after a two‑year secondment abroad during which time you rented out your flat.
On your return you find a pile of mail that your tenant had failed to pass on to you. On opening the mail you find that you have been issued with a County Court Judgment in relation to the non‑
payment for some building repairs commissioned by the tenant in your absence. You had assumed that the tenant should be liable for these repairs but as you do not wish to leave the debt outstanding you take immediate steps to pay the debt in full. Do you need to report yourself to the SRA?
Regulation 3.1 (n), Practising Regulations requires you to inform the SRA if you have been made subject to a judgment which involves the payment of money other than one in which you have paid and supplied evidence of payment to the SRA. The effect of this, in practical terms, is that you will need to inform the SRA of the Country Court Judgment and supply the SRA with the evidence of payment.
NEXT STEPS
In‑house lawyers with management responsibilities should: