The SRA’s intervention process is not infallible
Intervention is the most draconian of all the Solicitors Regulation Authority’s (SRA) powers. Since it basically involves the SRA showing up with a van to close the firm and taking control of its funds and files, leaving devastation and frequently financial ruin in its wake, it is a power that ought to be used sparingly and only when necessary in the circumstances.
Given the dramatic consequences of an intervention, one has to feel sorry for Mr Kashif Sultan, who was included as a subject of an SRA intervention into the firm LG Law Chambers on 30 October, only for the SRA to later discover that he was not actually connected to the firm at all. The SRA took the unusual step of publishing a further decision amending its earlier decision to remove reference to Sultan.
The findings on which the decision was based included specific findings that Sultan had acted in breach of the SRA Accounts Rules 2011 and the SRA Principles 2011. Anyone searching Sultan’s name on the SRA’s ‘check a solicitor’s record’ database is directed to those findings before being able to scroll down and reach the information that the findings were withdrawn. One does rather wonder, though, how it came to pass that the SRA made findings – not the lesser ‘reason to suspect’, which suffices in relation to dishonesty in the intervention context – but actual findings of breaches of the rules.
Did they not investigate to an extent sufficient to identify the actual people working at the firm? And the findings weren’t just in relation to the accounts rules, which are, of course, strict liability – they extended to the principles, too. One might have hoped that there was actual evidence upon which the SRA could reach that determination.
The circumstances of the case are clearly unusual and we, as outside observers, are not privy to all of the details. Sultan must be the unfortunate victim of either a mistake somewhere along the line, or the deliberate and wrongful use of his name and professional identity. Either way, it’s pretty embarrassing for the SRA to get it so wrong.
Until quite recently, there had never been a successful challenge to an intervention decision (once made). That was a record jealously guarded by the SRA. It still maintains that there has never been an intervention set aside following a contested court hearing, since the one decision that was overturned was then reinstated on appeal.
What that (heavily qualified) headline doesn’t tell us is how many times the SRA has conceded a challenge to an intervention or withdrawn a threat of intervention, which is more often than you might imagine.
Representations and evidence
It is now reasonably common for intervention decisions to be on notice. The SRA has to be pretty sure that there is an immediate risk to client funds to make the decision without giving the solicitor or firm in question any opportunity to comment.
So, some solicitors threatened with intervention are able to make representations and provide evidence as part of the decision-making process. The SRA’s reasoning is not always as unassailable as we as a profession might like to believe. The recommendation may be withdrawn or not adopted by an adjudication panel.
For others, the first warning is the knock on the door. The bank accounts are already frozen, and the solicitor and their staff must immediately down tools and assist the SRA’s intervention agents as required to identify urgent client matters and ensure as orderly a handover as possible. Those solicitors have eight days to find out and understand what happened, consider options, and launch a challenge in the High Court complete with supporting evidence, all in circumstances where they had no idea the firm’s accounts were about to be frozen.
On notice or not, practising certificates of intervened solicitors are suspended. Financial and professional ruin beckons. Few can afford intervention costs (recoverable as a statutory debt) and defend themselves in disciplinary proceedings. Employees are out of a job and may be tainted by association. Life becomes pretty grim.
Intervention is sometimes necessary. That does not mean that the process is infallible and it does not mean that it should be treated as anything other than an exceptional course.
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This article was first published by Solicitors Journal on 15 December 2015, and is reproduced by kind permission. You can read the original article by clicking here.
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