Decision-making criteria

About this criteria

This decision making criteria provides a broad summary of the relevant provisions and gives guidance to decision-makers on how to apply those provisions. This is not an exhaustive list of the factors which may be relevant in individual cases. Further information about our approach to decision making can be found in the Decision-making framework.

Approving a COLP and COFA

The SRA Authorisation Rules set out criteria to be applied and procedures to be followed for the approval of a COLP and COFA.

When considering whether a candidate should be approved as COLP or COFA the decision-maker will take into account the criteria set out in the SRA Suitability Test and any other relevant information (Rule 15 of the Authorisation Rules). The decision-maker should be satisfied that a COLP or COFA is a suitable person to carry out his or her duties (Rule 8.5(f) of the Authorisation Rules and Rule 8.5 more generally for the duties which apply).

Who can be a COLP or COFA?

Criteria in Rule 8.5 of the Authorisation Rules require that the designated COLP/COFA must:

•  be an individual;  
•  be a manager or an employee of the authorised body;  
•  consent to their designation as the COLP and/or COFA (which will be evident from their declarations on the application forms); 
•  be of sufficient seniority and responsibility to fulfil the role;  
•  not be disqualified from being a Head of Legal Practice (HOLP) or Head of Finance and Administration (HOFA);  
•  in the case of a COLP, be a lawyer of England and Wales, a Registered European Lawyer, or is registered with the Bar Standards Board under Regulation 17 of the European Communities (Lawyer’s Practice) Regulations (2000), and an authorised person in relation to one or more of the reserved legal activities which the body is authorised to carry on.  

Relevant considerations when considering whether the individual is of sufficient seniority and responsibility for the role may be whether he or she has:

•  unfettered access to all management and/or financial information about the firm, including the office account for COFAs;  
•  direct authority or access to those who have authority to make decisions, raise issues and make changes within the authorised body;  
•  clear lines of reporting to decision-makers;  
•  a good knowledge of the requirements in the SRA Handbook (COLP) or SRA Accounts Rules (COFA);  
•  adequate resources in terms of time and money to properly carry out the role, and  
•  processes and procedures to fulfil their reporting and recording responsibilities.  

Where such information is lacking and/or inconclusive, this may indicate that the criteria are not met.

There must be suitable arrangements in place to ensure that compliance officers are able to discharge their duties in accordance with the Authorisation Rules, in particular Rules 8.5(c) for the COLP and Rule 8.5 (e) for the COFA.

Other factors the decision-maker may take into account in assessing seniority and responsibility relate to the size and complexity of the applicant body and/or its business arrangements which impact on the risks to the regulatory objectives. The greater the risks the more skill, knowledge, authority and experience the COLP/COFA will need to have to carry out the role. Factors the decision-maker may need to take into consideration include:

•  the size and type of body, including the ownership and control of the structure;  
•  the nature of reserved and unreserved activities to be undertaken;  
•  the number and experience of fee earners and whether they are qualified or not;  
•  the employment history of the candidate and management experience;  
•  the proposed day-to-day responsibilities and work patterns of the candidate in the body and in respect of any other employer or business in which the candidate is involved;  
•  the number and ratio of non-lawyer managers and non-lawyer owners in the licensed or licensable body;  
•  the financial arrangements the body will have, such as fee sharing, referral and/or funding agreements;  
•  any permitted separate businesses the body or authorised persons/employees will have;  
•  the business management skills of the authorised persons in the body, and  
•  the risk management and supervision processes within the body or proposed processes.  

Criteria applicable to the COLP/COFA as a manager or employee

Criteria in Rule 8.6 of the Authorisation Rules relates to the COLP/COFA in their capacity as employee or manager. An authorised body must not employ, remunerate or permit a person to be a manager without the consent of the SRA in certain circumstances, for example, if they are struck off or suspended or disqualified from being an employee. Separate criteria exists for approval as a manager, titled: 'Manager, decision to approve or refuse with or without conditions on a body's authorisation'.

Approval subject to conditions

Rule 14.5 of the Authorisation Rules provides that the decision-maker may, at the time of granting approval or at any time thereafter, make the approval of the compliance officer subject to such conditions on the body’s authorisation as they consider appropriate having regard to the criteria in Rule 9 of the Authorisation Rules.

Providing the SRA with information

Pursuant to Rule 14.2 of the Authorisation Rules all information, documents, and references as specified by the SRA must have been received.

In order to approve a role holder the decision-maker will need to be satisfied that the relevant tests have been met. The SRA expects the applicant body and the individual candidate to provide sufficient evidence to enable the decision-maker to properly assess this. If insufficient evidence has been provided by the time that a decision is taken, the authorisation for the relevant role will be refused.