Decicion-making criteria

Introduction

This criteria applies to decisions taken in respect of making grants from the Compensation Fund to claimants that have suffered loss due to the dishonesty of a person or firm regulated by us, or who have suffered loss and hardship due to the person or firm’s failure to account for money they received.

Delegated authority

This is set out in delegation [d11]

Criteria in statutory rules

The relevant provisions are:

• Section 21(2) and Section 21(h) of the Legal Services Act 2007
• Schedule 11, paragraph 19 of the Legal Services Act 2007
• Section 36, S36(A), Section 79 and Section 80 of the Solicitors Act 1974
• Section 9 of the Administration of Justice Act 1985
• Rule 3 of the SRA Compensation Fund Rules 2011

Criteria

The decision-maker, using their discretion, will take into account the following factors when reaching a decision and must be satisfied that:

• The object of the fund is satisfied, namely that the fund replaces money which has already been paid to the regulated person, employee, manager or owner;
• the applicant has suffered loss in consequence of the dishonesty of the regulated person ( or their employees , managers or owners);
• the applicant has suffered loss and hardship in consequence of a failure to account for money which came into the hands of the regulated person (or employees, managers or owners), including failure to complete work for which payment had been made; or
• the loss was suffered in the course of a transaction of a kind which is the usual business of the regulated person or in the case of a licensed body, in the course of performance of a regulated body.

The decision-maker will seek to make a decision in a fair and consistent manner.  

Policy

Case study

The example below is illustrative and does not set any type of precedent. Each matter is considered on its own facts and merits.

A client instructs a firm in the purchase of his home and pays the purchase price, solicitor's fees and disbursements. The purchase is completed by the firm but a few days later the SRA close the firm, taking control of files and monies.

The client through his new solicitor makes a claim on the Compensation Fund for money already paid to the firm, being the stamp duty land tax and land registry fee. . He also claims his new solicitor's fees for dealing with the extra work and making the claim. The new solicitor sends the application form to us with the paperwork to show that the firm had received all the money to complete the conveyancing transaction.

As the firm had received the money but failed to pay the stamp duty land tax and land registry fee the SRA pay this. The SRA also pay the new solicitor's fees for completing the work the first firm failed to do; this includes the cost of making the claim to us.